The Agreement of Purchase and Sale states that that balance of the purchase price on closing date will be paid in cash or certified cheque subject to usual adjustments. Closing amount 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, which are pro-rated, and a credit is given to the seller as an adjustment on closing. Some examples of closing adjustments on a resale home are for prepaid realty taxes, prepaid condominium fees (if the property purchased is a condominium), and fuel oil (if property has an oil furnace). Any bill until the closing date is the responsibility of the seller and after that is the responsibility of the buyer.
On a new home purchased from a builder, closing adjustments are much higher than on a resale home. The adjustments include hydro and water meter installation costs, Tarion New Home Warranty Enrolment Fee, Tree planting, enrolment fee, driveway paving, grading deposit, gas water heater, educational lot levy, land taxes, real property taxes, GST/HST Rebates and many other items which are not normally adjusted when one buys a resale property.
The buyer’s lawyer wills usually advice the buyer about all the closing adjustments.