What is an agreement of purchase and sale?

There are so many forms involved in the buyer process, and it can be hard to discern what exactly you’re signing, and why!

The Agreement of Purchase and Sale form is also referred to as an offer. This form is used to state a buyer’s desire to purchase a property and negotiates the terms of that purchase/sale.

Using this form allows buyers to set out the details of their offer - the terms and conditions - to buy the seller’s property. 

Conditions may be things like arranging financing, home inspections, fire insurance, or confirming that their current home sells first. 

The document is 8 pages long, and to fill it in means answering a large number of questions about the property you are interested in, the pricing, deposit, and more. 

Let’s define some of the “real estate lingo” within the form: 

Irrevocability: This is the deadline for an offer - the seller has until this date to accept the offer, and the buyer cannot withdraw their offer. 

Completion Date: On the date that a transaction is scheduled to be completed, the property must be vacant. It cannot be a weekend or holiday. 

Chattels: Chattels are anything that is not a part of the property itself. Things like TV mounts to large items like the water heater must be discussed here. 

Fixtures excluded: Anything that the seller wants to take with them. 

Rental Items: Any aspect of the property that is not currently owned by the seller, that must be handed over to the buyer in order to continue leasing. 

Common Expenses: Essentially this section is for Condo Fees, if the buyer is interested in a condo, as well as utilities, management fees, building insurance, etc. 

Parking and Lockers: Define whether they are available, for rent, etc. 

HST: Tax on the sale. 

Title Search: Times for lawyers to undertake searches. 

Title: Buyer agrees to accept the ‘title’ to the property. This provides the supply of telephone, electricity, gas, sewers, water, and more. 

Closing Arrangements: How to accomplish ‘closing’ on the property. 

Status Certificate: A large booklet with all information about a condo. 

Documents and Discharge: The seller must deliver these documents to the buyer (survey, deeds, etc). 

Meetings: Warrants that no special meetings about the condominium corporation being terminated, or any major changes to finances upcoming. The buyer will be able to cancel the agreement if they find out otherwise. 

Inspections: Buyer has the opportunity to inspect the property. 

Approval of Agreement: Must obtain consent to the transaction from the Condo Corp/Board. 

Insurance: Seller is responsible for the property until closing - including insurance and damages. 

Document Preparation: Deed must be prepared at the expense of the seller. 

Residency: Only relevant if a non-resident is selling the property, has to do with taxes. 

Adjustments: Lists usual adjustments that the buyer will be responsible for on closing day. 

Property Assessment: Property may be re-evaluated on an annual basis, and real estate salespeople are not responsible if a change takes place. 

Time Limits: Must be adhered to. 

Tender: Each side demonstrates they are willing and ready to complete the transaction. 

Family Law Act: Seller must comply with this act (spousal requirements, no one else has a claim to the property, etc)

UFFI: No Urea Formaldehyde Foam in the property

Legal/Accounting/Environmental Advice: Ensures real estate advice is not seen as synonymous to any of these types of advice. 

Consumer Reports: Buyer may need a personal or credit check. 

Agreement in Writing: Keeps the agreement between buyer and seller to what has been said here. 

Successors and Assigns: A more morbid section, this is for if the seller or buyer dies before an agreement can be completed. This shows even their successors are bound by the agreement.