Agreements of Purchase and Sale are used by almost all Realtors. They are legally binding agreements regarding the purchase and sale of real property.  The Ontario Real Estate Association (OREA) provides a standard form that is the basis for most agreements. The agreement typically lists the conditions which must be met in order for the real estate deal to be completed. The agreement often begins as an offer introduced by the potential purchaser. If the seller accepts this offer, the agreement can be terminated only by mutual agreement, or in accordance with the terms and conditions contained within the agreement. There are many possible terms and conditions that may be included in an Agreement of Purchase and Sale. These include, but are not limited to: home inspection, financing, and title searches.

The Agreement of Purchase and Sale contains numerous sections. The following provides a brief overview of some of the sections included in the Agreement of Purchase and Sale.

The Information Section appears at the top of the form followed by numerous clauses. The Information Section requires: the date of the agreement, the full legal names of the parties, the legal description of the property, the purchase price and the deposit amount. Your Realtor will provide assistance in determining a fair purchase price. Many factors are considered in determining the fair market value of the property including: location, condition of the fixtures and chattels, property size, and access to amenities.

The Deposit offered by the purchaser is typically 5% of the purchase price. The Deposit is considered part of the purchase price, and is adjusted as a credit to the purchaser on closing.

The Completion Date is the closing date. Unless otherwise agreed upon, the property should be vacant. The Completion Date cannot be a weekend date or Statutory Holiday.

The Chattels Included section allows the purchaser to list any items separate from the property that they wish to have included in the purchase such as refrigerators, washers and dryers.

The Title Search section provides the specific times for the urchaser’s lawyer to complete the necessary searches and checks on the property. These searches and checks on title are completed to ensure that the Purchaser will obtain good title, and that there are no work orders outstanding against the property.