Why is a Purchase and Sale Agreement important in Ontario Real Estate?

In Ontario, whether you’re buying or selling a property, the Agreement of Purchase and Sale is the most important document related to your transaction.

This document contains all the pertinent information specific to your deal including a list of conditions between the buyer and seller. It outlines the exact price the buyer agrees to purchase the property for and what conditions must be met for the sale to go through. Although sale conditions are usually added by the buyer, the seller also has the right to request any number of conditions to serve their best interests.

Common conditions can include:

  1. Finance Terms

This is usually the buyer indicating that if they are unable to obtain a mortgage, they can cancel the agreement without penalty. 

  1. Seller Assist

Sometimes the seller agrees to credit the buyer a certain amount of money upon closing to offset some of the buying or closing costs. 

  1. Closing Costs

The agreement can also outline who will pay for what closing costs. Examples of closing costs include: legal fees, home insurance, property tax, and land transfer tax.

  1. Home Inspections

This is a clause to protect the buyer. It says the buyer will only purchase the home pending a satisfactory report from a professional home inspector on the homes condition. 

  1. Fixtures and Appliances

This outlines which fixtures and appliances are included with the purchase and which ones are excluded. 

  1. Closing Date

The precise date of close is specified. 

  1. Sale of Existing Home

With a home sale contingency in place, the transaction is dependent upon the sale of the buyer’s home. If the buyer’s house sells by the specified date, the contract moves forward; if it doesn’t sell by the specified date, the buyer has the option to terminate the contract.