A sale or purchase agreement clearly mentions the balance remaining on the closing date and its method of payment. The remaining balance amount may be paid through cash or via a certified cheque. In the latter’s case, the cheque must include any relevant adjustments that are to be paid on closing.
Adjustments between Vendor and Purchaser for Resale
In case of a resale home, these adjustments will include the items that are already paid for by the seller. These will benefit the purchaser after the date of closing and thus will be paid for in the form of credit to the seller on the closing date. For example, prepaid property taxes, fuel oil (in case of an oil furnace) or relevant condominium fees.
Adjustments between Builder and Purchaser for New Construction
The closing agreements are more in case of a new construction as compared to a resale home. These adjustments can include water and hydro meter installation costs, boulevard tree planting, gas water heater, fencing charges etc. Besides these, there are many other items that are not normally adjusted. All the items are to be paid for in the beginning at the time of the closing of the deal.