Real Estate Law Wizard

Home Buying Legal Checklist: Offer to Closing in Canada & the US

Walk through every legal checkpoint from offer to closing — conditions, deposits, title, financing, and closing costs — for buyers in Canada and the US.

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The Legal Steps Between an Accepted Offer and Getting the Keys

Once a seller accepts your offer, a binding contract exists — everything after that is execution. In Canada, closings are lawyer-managed: a lawyer or notary (notaries handle most BC and Quebec closings) searches title, prepares and registers the transfer, receives mortgage funds in trust, and pays out the seller. In the United States, the mechanics vary by state: many states close through escrow or title companies, while others — including New York, Georgia, Massachusetts, and South Carolina — require attorney involvement. Either way, the same legal work happens: title is searched, liens are cleared, taxes and adjustments are prorated, funds move through trust or escrow, and the deed is registered or recorded.

The most consequential period for a buyer is the conditional (contingency) window. A financing condition protects you if the lender declines; an inspection condition lets you renegotiate or walk after defects surface; a condo status or HOA document condition protects you from special assessments and lawsuits you cannot see from the unit. Waiving a condition is legally significant — once waived, the protection is gone even if the underlying problem later appears.

Deposits, Earnest Money, and Where the Risk Sits

Canadians call it a deposit; Americans call it earnest money — either way it is real money at risk. The funds should always be held by a neutral party: a brokerage trust account or lawyer's trust account in Canada, or a licensed escrow or title company in the US. If a firm deal collapses because the buyer cannot close, the deposit is typically forfeited to the seller and can be just the starting point — sellers can also sue for the shortfall if they resell for less. If the seller defaults, the buyer is entitled to the deposit back and may claim damages or, in some cases, specific performance.

Deposit sizes are custom, not law: commonly around 5% in many Canadian markets and 1%–3% earnest money in much of the US, though competitive markets push both higher. What matters legally is the contract language — when the deposit is due, who holds it, and what triggers forfeiture or return. Never wire deposit funds based on emailed instructions alone; real estate wire fraud targets exactly this moment, so verify instructions by phone to a number you independently confirm.

Closing Costs Buyers Forget: Taxes, Title Insurance, and Adjustments

Beyond the down payment, budget 1.5%–4% of the purchase price for closing costs, though this varies by state and province. In Canada the biggest line item is usually land transfer tax — charged in most provinces, doubled in Toronto by a municipal tax, and partly refundable for many first-time buyers. In the US, transfer taxes range from zero to over 2%, and title insurance is a larger cost (often 0.5%–1% of the price) because premiums are priced differently than in Canada, where a one-time owner policy typically costs a few hundred dollars.

Adjustments round out the bill: property taxes, condo fees, and sometimes fuel or utilities are prorated to the closing date so each party pays only for their period of ownership. Legal fees for a standard purchase typically run $1,000–$2,500 in Canada; US attorney or escrow/settlement fees vary similarly by market. This wizard builds a personalized checklist so none of these items surprises you in the final week — and flags the questions worth asking a real estate lawyer in your province or state.

Related: Real Estate Law Wizards · Closing Cost Planner · Purchase Agreement Reviewer · Title Issues Troubleshooter · Real Estate Document Organizer · All Legal Wizards · AI Solutions for Law Firms

Frequently Asked Questions

Do I need a lawyer to buy a house?
In Canada, effectively yes — a lawyer or notary is required to register the transfer and handle mortgage funds in every province (notaries commonly handle closings in BC and Quebec). In the US it depends on the state: some (New York, Georgia, Massachusetts, South Carolina, and others) require attorney involvement, while many close through escrow or title companies. Even where not required, a lawyer's review of the agreement and title is inexpensive relative to the risk.
What happens if I waive my financing condition and the mortgage falls through?
You are still bound by the contract. If you cannot close, you typically forfeit your deposit (earnest money) and can be sued for the seller's additional losses, such as reselling at a lower price plus carrying costs. Only waive a financing condition after the lender issues a full written commitment on the specific property — a pre-approval is not enough.
How much should my deposit or earnest money be?
There is no legal minimum — it is negotiation and local custom. Around 5% is common in many Canadian markets; 1%–3% earnest money is typical across much of the US, with more in competitive situations. What matters is that the funds are held in a trust or escrow account, not paid directly to the seller, and that the contract clearly states when they are refundable.
Is title insurance worth it for a home buyer?
Usually yes. An owner's title insurance policy protects against title fraud, liens missed in searches, boundary and survey problems, and unpermitted work by prior owners. In Canada it is a one-time premium of a few hundred dollars; in the US it is larger (often 0.5%–1% of the price) and sometimes paid by the seller depending on local custom. Your lender will require a lender policy regardless — the owner policy is the one that protects you.
What taxes do I pay when buying a home?
In Canada, most provinces charge land transfer tax on closing (Toronto adds a municipal version), with first-time buyer rebates available in several provinces; Alberta and Saskatchewan charge smaller registration fees instead. In the US, transfer taxes vary from zero to over 2% by state and locality, and who pays is set by local custom. New builds may also attract GST/HST in Canada. Exact figures vary by province and state, so confirm before you firm up.
When do I actually get the keys?
After the money moves and the deed is registered or recorded — not at a fixed hour. In Canada, keys are typically released once the land registry confirms the transfer, often in the afternoon of closing day. In US escrow states, possession follows recording and funding confirmation. Build moving plans with buffer, and never book movers assuming a 9 a.m. handover.

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This checklist provides general legal information about residential real estate purchases in Canada and the United States. It is not legal advice, and requirements — including whether a lawyer is mandatory, transfer tax rates, and deposit rules — vary by province and state. Consult a real estate lawyer in your jurisdiction before signing, waiving conditions, or closing.

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