Definition of Agreement of Purchase and Sale
An agreement of purchase and sale is a written contract that determines the terms of the sale of property and the requirements and responsibilities of both the buyer and the seller.
Why is this term important?
The agreement of purchase and sale document signals the start of the real estate buying process in Canada. A buyer uses the document to register a specified purchase price or offer price, for a particular property, along with certain conditions. This initial offer document is legally binding and irrevocable for a certain time-period. During this period of time, the offer cannot be cancelled unless both the buyer and seller agree.
If there are no counter-offers and the seller likes the terms, the seller can sign the agreement of purchase and sale document. By signing this document, the seller and buyer are now legally obligated to follow through with the transaction of the property and create a legally binding sale of the property.
If there are no counter-offers and the seller likes the terms, the seller can sign the agreement of purchase and sale document. By signing this document, the seller and buyer are now legally obligated to follow through with the transaction of the property.
The seller also has the option to use the agreement of purchase and sale document to make a counter-offer. This may mean an amendment to the offer price from the buyer or a change in the proposed conditions of sale.
While this document can differ from province to province, typically it includes standard information, such as the specific price to be paid by the buyer, along with specific terms and conditions that must be met in order for the sale of the property to be finalized.
Examples of term
Whenever one party sells their home to another there will be an agreement of purchase and sale, which can be a standardized document or a legal contract drawn up by a lawyer or notary, depending on the province where the property is located.