You’ve finally found the one – that perfect home, condo, or cottage in Muskoka, that is. You’re so serious, you’ve even fully committed by putting in an offer. Exciting stuff! What’s next for you and your dream property? Unfortunately, a little bit of paperwork – before you can finally be together.
An Agreement of Purchase and Sale is the legal document that you’ll need to sign before your dream home is really yours. There are quite a few conditions, clauses and information contained in this document, so it’s a good idea to know what is included and what to look out for. Here are a few of the key elements contained within your Agreement of Purchase and Sale:
Price/Deposit
In order for your Purchase of Agreement and Sale to be valid, it must include the price of the property as agreed on by both the buyer and the seller. When reviewing the purchase price noted, it’s always a good idea to make sure that the words and numbers recorded are the same.
The amount of the deposit should also be referenced in your Agreement of Purchase and Sale. Pay special attention to the terms that are listed and required. For example, a provision is sometimes included requiring the deposit to be placed in an account that accumulates interest. That interest is then transferred to the buyer after the closing date.
Possession Date
Another key element defined in your Agreement of Purchase and Sale is the date in which your home is truly and finally yours. Ensure that the possession date is noted and correct in your Purchase of Agreement and Sale. The closing date (when the money is transferred) and possession date can be different, so be sure to clarify those before signing your Agreement.
Irrevocability
Irrevocability tends to be one of the most misunderstood items in a Purchase of Agreement and Sale. Basically, what the Irrevocable Clause means is that a buyer cannot retract their offer until the date stated has passed, and the seller, within that time period, has to decide whether to either accept or decline the terms of that offer. This clause basically helps to protect the seller, and it allows them the time to consider other offers that may be present without losing out on the offers previously made. Once the irrevocability date has passed, however, the offer is no longer valid and any deposit made must be returned. **We can keep this in, or delete it altogether if you feel it doesn’t quite accurately describe this.
Conditions
Before you sign that Agreement of Purchase and Sale, you definitely want to take a good look at the conditions. Typical conditions listed in an Agreement of Purchase and Sale include financing conditions requested by the buyer that makes the purchase of the property contingent on securing financing. A favourable home inspection condition is also common, as is that the offer is conditional upon the sale of the purchaser’s property. Finally, another popular condition is that a lawyer has reviewed and approved the terms of the offer. As a buyer or seller, if you require any of these conditions, it’s extremely important to make sure that they are present before you sign, and that you fully understand what you are agreeing to.
These are just a few of the key things to look for in your Purchase of Agreement of Sale. It’s a complicated, legal document; there’s a lot to know and understand. For that reason, it’s advisable to run your Purchase of Agreement of Sale by an experienced real estate lawyer to make sure everything is valid, correct and above board. At Ares Law, we specialize in helping our clients in Muskoka make sure their Purchase of Agreement is airtight before they commit. Connect with us today at (705) 645–8743 and see how we can help.
