Real Estate Terms, Tips & Advice
Common Real Estate Definitions:
Completion Date (Closing Date):
At its simplest the Completion Date in a real estate contract is the date the property is transferred and the money for the purchase is paid to the Seller by the Buyer.
In a real estate contract the adjustment date is the date that calculations for such items as property taxes, water accounts, rents, damage deposits, etc. are modified.
The Possession Date in a real estate contract is the date that the Buyer has the right to take possession of the property.
*Comments on Dates:
Check to make sure that the Completion Date is not a weekend or a holiday.
Real Estate Related Explanations and Recommendations:
When a home is being sold realtors generally recommend that sales contracts be written with the completion date at least 1 day before the possession date. This recommendation is made to avoid a situation where circumstances may cause a delay in the completion of the purchase and the Buyer has no place to move to. In addition this insures that the Seller gets the sale proceeds well in advance of giving up possession.
The Buyer or the Seller can, however, instruct their respective Realtor to have the purchase contract written with both completion and possession on the same day. From the Seller’s perspective the delay in possession makes sense. However, the Buyer must pay for a home, and in most cases begin to be charged interest on a mortgage, without having the benefit of living in it, With that being said, most completions do go smoothly though and having completion and possession on the same day is generally not an issue.
Please Note: In the final analysis, all dates in a real estate contract are a matter
Completion Date and the Buyer’s Mortgage:
This gives the Buyer/Borrower the advantage of being able to enjoy their new home for a whole month without having to pay interest, and it allows extra time for the Buyer/Borrower to earn additional money to make the first payment. This advantage can be of even greater importance when the property being purchased has revenue - i.e. from a rental suite.
Dates and your Mortgage (Properties with Suites):
Most Buyers who purchase properties with a rental income require mortgage financing. Because of this fact a lot of thought should be given to the selection of the completion, adjustment and possession dates. The Buyer should remember that:
With a little planning the Buyer can use this information to enjoy the previously mentioned advantages and also have the additional benefit of putting most of the first month’s rental payment in his pocket. This is how it works:
*Please note that all advice on this page is a recommendation only and is not a legal requirement.
© Copyright 2023RealWeb Enterprises Ltd.all rights reserved