CASH TO CLOSE – The amount of money required to close a purchase transaction. This will be determined by the sale price, the amount of deposit paid, and the adjustments between the seller and purchaser of items such as property taxes, condominium fees and homeowner association fees.
As an example, a condominium is being sold for $450,000 with a closing date of July 4th. The purchaser has paid $20,000 as a deposit. The property taxes are $2,500 which were paid by the seller on June 30th. The condo fees are $425.00/month which were due July 1st and which the seller has paid.
Cash to Close Example
Purchase Price $450,000 LESS Deposit Paid -$20,000 Subtotal $430,000 PLUS Reimburse Seller for Approximately... Six-months Property Taxes $1,250 LESS Reimburse Seller For... 27 Days of Condo Fees For July $370 Cash to Close $431,620
CASH DIFFERENCE – The Cash to Close less the net mortgage proceeds.
NET MORTGAGE PROCEEDS – The amount of funds borrowed from the lender/bank less amounts deducted by the lender for items such as insurance premiums (when your mortgage is more than 80% of the purchase price), administration fees and wire/transfer fees.
CURRENT REAL PROPERTY REPORT – A survey of the property that shows the property lines and the footprint of all structures on the property. It also sets out the dimensions of the structures as well as the front, side and rear yards so that a determination can be made as to whether they comply with the City of Calgary Land Use By-law. A Real Property Report is “current” when it shows all the improvements to the property that are in existence today including fences that appear to define a boundary, decks, retaining walls, concrete pads and air conditioning units. The date that the Real Property Report was prepared is not usually in issue unless a lender requires it to be of a certain vintage.
JOINT TENANTS vs. TENANTS IN COMMON –
Joint Tenants: Is the equal holding of property between two or more people. This is the way most spouses hold title to real property. It simply means that should one of the owners pass away then that person’s interest in the property passes to the survivor(s) upon registration of a declaration which exhibits the death certificate at the Land Titles Office.
Tenants in Common: Is the equal or unequal holding of property by two or more persons. If one party passes away, then that person’s interest in the property is dealt with in accordance with their Will (or the law where there is no Will).
BARELAND CONDOMINIUM – A condominium where an actual lot has been created and you own the unit and the lot. An apartment style condominium cannot be a bareland condominium and not every condominium that is physically connected to the land is necessarily a bareland condominium. If the condominium is bareland then a Real Property Report is usually required under the purchase agreement (Check Condominium Property Act for definition).
CLOSING DATE vs. POSSESSION DATE – These terms are used interchangeably and refer to the date that the Purchaser intends to take possession of the property pursuant to the Purchase Agreement. It is the date that the Cash to Close is usually provided to the Seller’s lawyer, thereby “closing” the deal.
CONDITION DATE – In a Purchase Agreement there are often Conditions which the Purchaser wants to ensure are satisfactorily in place before fully committing to the purchase. The two most common Conditions are financing and a home inspection. Any Condition that is part of a Purchase Agreement must have an “expiry” date and time (the CONDITION DATE) so that all parties know when the Condition(s) have been met or not. If the Purchaser wants to proceed with the purchase these Conditions must be waived on or before the CONDITION DATE. In most cases, once the Conditions have been waived a binding or firm contract is created.