How the money flows
Chances are, the purchase price for your property is made up of some cash, and some mortgage money. If that’s the case, your lawyer will collect the balance of any cash that is payable prior to possession, and a trust letter from the buyer’s lawyer that is essentially a promise to call for and pay over the mortgage funds as soon as the title transfers to the buyer. As a matter of practice, lenders will not release funds until their interests are protected through a registered interest on the property title. Lenders are well organized and typically prepared to act quickly. Your lawyer will likely receive those funds within one business day of the title transferring to the buyer. Meanwhile, the offer provides for an interest payment to the seller for any outstanding funds.
As soon as the title transfers to the buyer, the buyer’s lawyer will arrange delivery of the mortgage funds to your lawyer’s office. Upon receipt of those funds, your lawyer will look after settling any interest that is registered against the title. The lawyer will pay us as provided for in the listing agreement, they’ll pay themselves, and they’ll deal with the balance of the funds in accordance with your instructions. All of your money will be accounted for and detailed on a “statement of adjustments” prepared by your lawyers office.
Your lawyer is working with the land titles office on a daily basis and should be able to provide a reasonably accurate estimate of the time it will take to transfer and register the title. In most cases, all funds have been received within one week of the possession date.
