Agreement of Purchase and Sale

Once you have found the home that best suits your needs and your budget, the next step is to have an Agreement of Purchase and Sale ("APS") drawn up. The APS is a contract used to purchase your new home and contains all of the terms and conditions of the purchase. As this is a legally binding document, it should never be made on impulse or under pressure. The most common form of the APS for residential real estate transactions is the pre-printed Ontario Real Estate Association ("OREA") form. This form has been adopted by every real estate board in the Province of Ontario. Given the generality of the form, it would be advisable to have a lawyer discuss the agreement with you prior to signing so that they may draft additional clauses or make amendments to the form to accommodate local requirements as well as address your needs not expressed within the document. In so doing, your lawyer can ensure that the agreement properly represents and protects your interests.

The agreement should clearly outline all terms and conditions of the sale including, among other details, the following:

  • the parties to the transaction;
  • the proposed purchase price;
  • the property subject to the agreement;
  • items included or excluded in the purchase price (i.e. appliances, draperies, etc.);
  • items located within the home that are rented;
  • the deposit made by the purchaser;
  • closing date for the sale of the property and vacant possession;
  • date of occupancy;
  • any conditions attached to the sale (i.e. satisfactory house inspection, mortgage approval, sale of an existing home, etc.); and
  • any specific obligations to be fulfilled by the vendor between the closing date and the date of occupancy (i.e. repair and/or painting of areas structurally altered by the vendor upon vacating the premises).

The entering into a purchase or sale of a house is the largest transaction most people will make in their lifetimes. Be certain to review the agreement in detail. Ask questions if you need clarification and make sure that you understand exactly what it is you're signing.