Agreement Purchase of Sale
Some basic information to make you feel comfortable on an Agreement of Purchase and Sale
Depending on the local market conditions and information provided by Linda, your Real Estate Professional, the price you offer would be less than the listed price that the seller’s has listed. This is customary unless the property is in a multiple offer situation. Each circumstance is different. Linda will provide a complete market analysis of the street, area and comparable properties recently sold in the area to determine the best possible starting price considering the sale prices, timing and past history of these properties.
A standard deposit tends to be a minimum of $5,000 on homes under $250,000 however as the price of the home is higher the deposit is also larger. Your deposit shows good faith and will be applied against the purchase of the home when the sale closes. As your Real Estate Professional I can advise you on an appropriate amount. They also have to be provided within 24 hours of the sale even if the sale has conditions.
The terms of the offer are the contents and details. Ie. Price, closing date, title search time, conditions if any, inclusions with the Agreement, special clauses relating to any particular part of the home etc. In most cases the Purchaser arranges their own financing either at a Financial Institution or thru a Mortgage Broker. Generally it is uncommon for a Purchaser to assume the existing mortgage of the Seller however if the mortgage has an attractive interest rate; it could be part of the terms of the Agreement of Purchase and Sale.
The standard conditions on an Agreement of Purchase and Sale tend to be (1) Conditional upon the Purchaser obtaining a home inspection on the property by a qualified home inspector within a certain period of time and (2) that the Purchaser has to arrange satisfactory financing within a certain period of time; generally 5 banking days not including Saturday, Sunday or Holidays. There is a condition which is subject to the Purchaser selling their own property however this condition tends to be more prominent in rural areas than in the centre parts of the City and Suburban communities.
These might include appliances and certain fixtures or decorative items, such as window coverings or mirrors. These items are considered part of the Agreement of Purchase and Sale and would remain in the house on closing. If they were written into the contract; they would generally be included in the sale price. There is also a clause stating that these fixture and possibly appliances would be in operating condition and this warranty would survive until the day of closing. It would be the responsibility of the Seller to repair these items if they break down prior to closing at their own expense. Purchasers should check these appliances, fixtures etc. to make sure they are operative once they enter the home on the day of closing and immediately notify their solicitor if they are not functioning or if there is a problem.
Closing or Possession Date
The closing date or also known as the possession date is generally, the day the title of the property is legally transferred and the transaction of funds are finalized. At this point, the keys are given to the Purchaser and they now own the property. Sometimes there could be confusion on this moving date as well because the Seller would be moving out as the Purchaser is preparing to move in. Most Purchaser would not be able to move into the home prior to 5:00 p.m. unless the Seller’s have already vacated the premises and an earlier closing date may have been arranged between the Seller’s lawyer and the Purchaser’s solicitor.