Firm deal or closed deal - what's the difference?

Dated: January 22 2024

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When we talk about a real esatate tranasction, you often hear the terms "firm deal" and "closed deal" but what do these mean and what is the difference when dealing with real estatein Nova Scotia?

These are two distinct terms used to indicate two separate parts in the timeline of a real estate transaction.

House sold

When an offer is accepted, the buyer has often put conditions on this often, such as home inspection and financing approval. They typcially get around 10 business days to complete these (and any other conditions) and be satisfied. So, for example, if an issue came up with the home inspection, the buyer has decided to live with it, or their agent has negotiated with the selller's side and come to some agreement,

Once you have satisified the conditions on the offer, your agent then sends a form to the seller's aegnt that waives the conditions - and at this point the deal is firm.

This means the property is now shown as sold but it has not yet reached the closing date - that is the date when the buyer takes posession firm deal.

And that is what closing refers to - the point at which the property officially changes ownership. It involves the transfer of funds, title registration, and the completion of all legal formalities. The closing date is predetermined and specified in the offer (the purchase and sale agreement), but it typically occurs weeks or even months after the deal becomes firm.

During the period between a firm deal and the closing date, various tasks must be undertaken to ensure a seamless transition of ownership. These include finalizing mortgage arrangements, settling outstanding property taxes and utility bills, and coordinating with legal professionals for the transfer of title. The closing process also involves a final walkthrough of the property to confirm its condition and ensure it aligns with the agreed-upon terms.

While a firm deal provides a level of assurance, unforeseen circumstances can still arise before the closing date. Issues such as financing challenges, property defects discovered during the final walkthrough, or unexpected legal complications can potentially disrupt the closing process. In such cases, parties may need to renegotiate terms, extend the closing date, or, in extreme scenarios, terminate the deal.

Understanding the nuances between a firm deal and a closed deal is essential for anyone navigating the real estate landscape in Nova Scotia. A firm deal denotes the commitment of both parties to the agreed-upon terms, marking a significant step towards the completion of the transaction. On the other hand, the closing of the deal is the culmination of various legal and financial processes, ultimately resulting in the official transfer of ownership. By grasping these distinctions, individuals involved in real estate transactions can navigate the Nova Scotia market with greater confidence and awareness.

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Cheryl Cook

Growing up in a military family means you understand the challenges of moving home. An award-winning REALTOR® with a background in interior design, Cheryl Cook has a proven track record for helping b....

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