So, you've found the perfect investment property. After months of searching, touring units, researching buildings, calculating costs from maintenance fees to monthly mortgage payments, and making offers, hard work may finally prove itself worthwhile. Only this milestone marks the beginning of a new, equally elaborate process – closing on a condo. It demands lots of money and diligence from buyers. The amount of both you're willing to put in may make or break ROI. Everyone can benefit from understanding the closing process before stepping into it. That's exactly what we're going to do today.
What Does It Mean to Close On a Property?
The term 'Closing a property’ doesn’t really make sense when you consider what it actually means. Nothing's being locked away and no repossessions are taking place. One thing is coming to an end, though – the shopping phase.
Closing refers to the final step in a real estate transaction where ownership of the property officially transfers from the seller to the buyer. It's the day when all the paperwork is signed and funds are exchanged along with keys. In other words, you officially become the owner and can begin preparing your condo for Airbnb guests.
The Closing Process, Broken Down
The closing process can seem daunting for someone who hasn't gone through it before. And in all honesty, it is without proper expectations for each step. We're here to help you avoid that with the following breakdown of how closing on Airbnb real estate works.
1. Hire a Real Estate Lawyer
- Required in Ontario to handle the legal aspects of the transaction
- They review contracts, conduct title searches, and ensure all documentation is in order
- Typically hired shortly after your offer is accepted
2. Review the Status Certificate
- Your lawyer examines this document, which outlines the condo corporation's financial health, rules, and any pending issues
- Reveals maintenance fee amounts, reserve fund status, and potential special assessments
- Critical for identifying red flags before finalizing the purchase
3. Secure Your Financing
- Finalize your mortgage approval with your lender
- Provide any additional documentation required
- Ensure funds are ready to be transferred on closing day
4. Conduct a Final Walk-Through
- Inspect the property one last time before closing
- Verify that the condition matches what was agreed upon
- Ensure any negotiated repairs have been completed
5. Sign the Paperwork
- Your lawyer prepares all necessary legal documents
- You'll sign the deed, mortgage documents, and other transfer paperwork
- This typically happens a day or two before the official closing date
6. Pay Closing Costs
- Transfer funds to your lawyer for land transfer tax, legal fees, title insurance, and other costs
- Budget for 1.5% to 4% of the purchase price for total closing costs
- Includes adjustments for prepaid property taxes and maintenance fees
7. Transfer of Ownership
- Your lawyer registers the deed in your name with the Land Registry Office
- Funds are transferred to the seller
- You receive the keys and officially take possession of your property
8. Begin Setting Up
- Change the locks for security
- Set up utilities, insurance, and internet in your name
- Start preparing the space for your first Airbnb guests
How Long Does It Take to Close on a Condo?
The typical closing period for a condo in Toronto ranges from 30 to 90 days after your offer is accepted, though the exact timeline depends on various factors including financing arrangements, the seller's circumstances, and the complexity of the transaction.
Most standard purchases close within 60 days, giving both parties sufficient time to complete their respective obligations. Delays can and do happen, though.
Weeks or even months may manifest if:
- Issues are discovered during the status certificate review, such as underfunded reserve funds or pending litigation against the condo corporation
- Your lender requires additional documentation
- Appraisals come in lower than expected
- Title problems like unresolved liens or boundary disputes need to be cleared
- The seller needs more time to vacate or find alternative housing
Delays can significantly impact your plans, especially if you've already lined up contractors for renovations, scheduled your first Airbnb bookings, or given notice on your current living situation. To minimize the risk of setbacks, work closely with your lawyer, maintain open communication with all parties involved, and build some buffer time into your planning to account for unexpected complications that may arise.
They say patience is a virtue—and in real estate closings, it's also a necessity. The sooner you accept that closing dates are more like educated guesses than guarantees, the less stressful the entire experience becomes. Just remember: every day of delay is one day closer to actually owning the property, so keep your eye on the prize and your contractor on speed dial.
