How Real Estate Closings Work in Ontario

Buying or selling a property in Ontario doesn’t end with accepting an offer — in fact, that’s just the beginning. Once both parties sign the Agreement of Purchase and Sale (commonly prepared using OREA Form 100), the real work begins.

From that point, there are legal, financial, and administrative steps that must be completed before ownership officially changes hands. This process is known as the real estate closing.

In Ontario, closing a real estate deal involves strict timelines, detailed paperwork, and coordination between lawyers, lenders, real estate agents, and in some cases, municipal offices.

Even small delays or missing documents can hold things up. Understanding how the process works will help you stay on track and avoid last-minute surprises.

This guide breaks down each stage of the real estate closing process in Ontario. You will see what is required from both buyers and sellers, what role your lawyer plays, and the costs you should expect.

By following these steps, you can move through closing and help transition to the closing day.

Getting Started: When an Offer to Purchase Becomes Binding

The closing process starts when the buyer submits a formal Offer to Purchase. This is not just a casual letter — it’s a written legal document that sets out the terms of the purchase.

In Ontario, this is typically prepared using the Ontario Real Estate Association’s Agreement of Purchase and Sale (OREA Form 100).

This standard form is the backbone of most residential real estate transactions, though custom agreements are sometimes used for unique situations.

Once the seller reviews the offer, they can:

• Accept it as written
• Reject it entirely
• Make a counter-offer

When both sides agree on all terms and sign the OREA Form 100, it becomes a legally binding Agreement of Purchase and Sale (APS).

Key details in OREA Form 100 include:

• Purchase price — agreed amount to be paid
• Deposit amount — typically held in trust by the listing brokerage
• Closing date — when ownership officially transfers
• Conditions — such as financing approval, home inspection, or status certificate review (for condos)
• Clauses — outlining included chattels, repairs, and adjustments for taxes or utilities

Tip: Once signed, changes can typically only be made by written amendment. Walking away without a valid contractual reason might mean forfeiting your deposit or facing legal action.

Because of its legal weight, buyers and sellers should fully understand OREA Form 100 before signing, ideally with a lawyer reviewing it first.

Contact a Real Estate Lawyer in Toronto

With the right preparation and the guidance of an experienced real estate lawyer, you can approach closing day with confidence, ensuring the transfer of your new property is smooth, accurate, and free of unnecessary stress.

Meeting the Conditions in the APS

If the APS includes conditions, these must be met by the agreed deadlines for the sale to move forward.

The most common conditions include:

1. Financing Approval – The buyer secures a mortgage from their lender.
2. Home Inspection – An inspector evaluates the property for potential issues.
3. Sale of Buyer’s Property – If applicable, the buyer must sell their current home first.

Failing to meet these conditions may allow the buyer to walk away from the deal without penalty, depending on the APS wording. Once all conditions are satisfied or waived, the sale becomes firm.

Title Search and Due Diligence

Once the APS is firm, the buyer’s lawyer conducts a title search to confirm the seller’s legal right to sell the property.

They will check for items such as:

• Liens or mortgages that must be cleared before closing
• Easements or rights-of-way that could affect use of the property
• Unpaid property taxes or utility bills
• Compliance with zoning rules and building regulations

If any issues are found, they may need be resolved before the closing date. This helps the buyer gets a clear title with no legal surprises later.

Finalizing Financing and Insurance

If the buyer is using a mortgage, the lender will require final verification of income, down payment, and sometimes an updated property appraisal. The mortgage instructions are then sent directly to the buyer’s lawyer, who prepares the mortgage documents for signing.

It’s important to review these carefully to confirm the terms match what the lender promised.

Before closing, the buyer must also arrange property insurance. Most lenders will not release mortgage funds without proof that the home is insured for at least the replacement value of the building. For condos, this typically means getting contents and liability coverage, since the building itself is insured by the condo corporation.

The insurance binder is sent to the lawyer, ensuring one more piece of the puzzle is in place before the transaction can proceed.

Closing Day Steps

Closing day is the final handover.

Here’s what happens:

1. Transfer of Funds: The buyer’s lawyer sends the balance of the purchase price to the seller’s lawyer via bank draft or wire transfer.
2. Registration: Once funds are received, the seller’s lawyer releases the signed transfer documents for registration with Ontario’s land registry system.
3. Confirmation: The buyer’s lawyer confirms the property is officially in the buyer’s name.
4. Keys: Keys are picked up from the brokerage or as agreed in the APS.
5. Seller’s Final Steps: The seller’s lawyer pays off the seller’s mortgage and any outstanding charges, then sends the remainder to the seller.

After Closing: Final Steps and Follow-Ups

Once closing day is complete and the buyer has possession, there are still a few important tasks to wrap up.

For Buyers:

• Title Confirmation – Your lawyer will send you a confirmation that the property has been registered in your name and that the mortgage (if applicable) has been registered with the lender.
• Utility Setup – Contact utility providers to set up or transfer accounts for electricity, water, gas, internet, and other services.
• Property Tax Account – Ensure the municipality updates its records so property tax bills are sent to you directly.
• Home Maintenance – If the APS included any agreed repairs or work by the seller, check to ensure they were completed as stated.

For Sellers:

• Mortgage Discharge – If you had a mortgage, your lawyer will arrange to pay it off using the proceeds from the sale. A discharge document will be filed with the land registry.
• Commission Payments – Your lawyer will also pay the real estate agent’s commission from the sale proceeds before sending you the balance.
• Forwarding Address – Update your mailing address with service providers, banks, and government agencies to ensure you receive important documents.

Land Transfer Tax and Other Closing Costs

One of the largest expenses for buyers (aside from the down payment) is Land Transfer Tax (LTT). LTT is calculated based on the property’s purchase price In Ontario, using the following scale:

• 0.5% on the first $55,000
• 1.0% on $55,000 to $250,000
• 1.5% on $250,000 to $400,000
• 2.0% on $400,000 to $2,000,000
• 2.5% on amounts above $2,000,000

Extra for Toronto Buyers:

If the property is in Toronto, there’s also a municipal LTT with the same rate structure up to $2,000,000.

First-Time Homebuyer Rebates:

Both the province and the City of Toronto offer rebates that can significantly reduce or even eliminate LTT for qualifying first-time homebuyers.

Other Common Closing Costs for Buyers:

• Legal Fees and Disbursements – Your lawyer’s time and any out-of-pocket expenses like title searches and registration fees.
• Title Insurance – Protects against hidden title defects, fraud, or survey issues.
• Lender Fees – Some lenders charge an administrative or appraisal fee.

Seller’s Costs:

While sellers avoid LTT, they still have costs such as legal fees, real estate commission, and mortgage discharge fees.

Timing and Possible Delays

Most real estate closings take between 30 to 60 days from the time the APS is signed. However, timelines can vary depending on the complexity of the transaction.

Common causes of delay may include, but not limited to:

• Financing Issues – Lender approvals or last-minute document requests.
• Title Problems – Unresolved liens, easements, or ownership disputes.
• Document Errors – Incorrect names, missing signatures, or registration mistakes.
• Municipal Compliance – Zoning or building code issues that need resolution before closing.

How to mitigate delays:

• Respond quickly to your lawyer’s requests for documents or information.
• Ensure financing is fully approved well before the closing date.
• Have insurance arranged early.
• Confirm that all APS conditions are met within the stated deadlines.

Final Thoughts

The real estate closing process in Ontario can feel complex, but it becomes much more manageable when you understand each stage in detail.

From drafting and signing OREA Form 100, to securing financing, completing inspections, and reviewing the statement of adjustments, every step is connected and important. Staying informed allows you to anticipate what’s next, address issues quickly can help avoid last-minute surprises.

The information provided above is of a general nature and should not be considered legal advice. Every transaction or circumstance is unique, and obtaining specific legal advice is necessary to address your particular requirements. Therefore, if you have any legal questions, it is recommended that you consult with a lawyer.