An Agreement of Purchase and Sale states that the balance of the purchase price on the closing date will be paid by certified cheque, subject to the usual adjustments. The certified cheque required from purchasers by the law office for closing will include any such ADJUSTMENTS payable on closing.
On a resale home, adjustments consist of items already prepaid beyond the closing date by the seller that benefit the purchaser after the closing date. Credit is given to the seller as an adjustment on closing. Some examples of closing adjustments on a resale home include items such as:
- prepaid realty taxes
- prepaid condominium taxes for resale condos
- fuel oil for properties heated by oil furnaces.
On a new home purchased from a builder, closing adjustments are referred to in the terms of the Builder’s Agreement. Builder closing adjustments are typically greater than on a resale home, since adjustments when buying from a builder can include items that are not normally adjusted for when buying resale, such as:
- hydro and water meter installation costs
- Tarion New Home Warranty Enrollment Fee
- boulevard tree planting
- driveway paving
- grading deposit
- gas water heater
- government levies, including development and educational levies
- municipally required fencing