When looking at an Agreement of Purchase and Sale for the first time it could be a little intimidating. Your Realtor should be explaining this document to you in full with respect to the standard clauses in addition to the conditions put in by the Buyer or Seller. To break it down further, the six key components of an offer to buy residential real estate are:
1) Price
Depending on the market conditions in the area and the information provided by us, your Realtor, the price offered by the Buyer may be different from the Seller’s asking price. Remember, I am here to get you the best deal possible.
2) Deposit
Your deposit shows good faith and will be applied against the purchase of the home when the sale closes. As a Realtor, I can advise you on an appropriate amount. This is normally provided in the form of a bank draft or certified cheque. Once the offer is accepted, the Deposit is held by the Seller’s Realtor’s Brokerage in trust.
3) Terms
The terms will include the total price offered, financing details, and closing terms.
4) Conditions
Conditions may include “subject to home inspection”, or “subject to mortgage financing”, or in the case of a condo, “subject to review of status certificate”. The deal isn’t considered firm until all conditions are met.
5) Inclusions and Exclusions
These might include appliances and certain fixtures or decorative items, such as window coverings.
6) Closing or Possession Date
Generally, the day the title of the property is legally transferred and the transaction of funds finalized.
If you are not familiar or comfortable with what you are signing, don’t sign it. Have your Realtor explain to you in plain terms what is contained in the offer.
