DirectOffers
The Agreement of Purchase and Sale (APS) is the legally binding contract between buyer and seller in a real estate transaction. Understanding its components is crucial for any home buyer.
Key Components of the APS
1. The Parties
The APS identifies:
- The Buyer(s)
- The Seller(s)
- The Property address and legal description
2. Purchase Price and Deposit
This section outlines:
- The agreed purchase price
- The deposit amount (typically 5% of purchase price)
- How and when the deposit must be paid
- Who holds the deposit in trust
3. Chattels and Fixtures
Chattels are items included in the sale that aren’t attached to the property (appliances, window coverings, etc.).
Fixtures are items permanently attached to the property and are automatically included unless specifically excluded.
4. Conditions
Common conditions include:
- Financing Condition: Allows the buyer time to secure mortgage approval
- Home Inspection Condition: Allows for a professional inspection
- Sale of Buyer’s Property: Makes the purchase conditional on selling your current home
- Status Certificate (for condos): Allows review of the condo corporation’s documents
5. Closing Date
The date when:
- Ownership transfers
- Keys are handed over
- Final payments are made
6. Standard Clauses
The OREA (Ontario Real Estate Association) standard form includes pre-printed clauses covering:
- Property condition
- Risk of loss
- Title search
- Tender of documents
Why Conditions Matter
Conditions protect buyers by providing “escape hatches” if certain criteria aren’t met. However, in competitive markets, buyers often feel pressured to waive conditions. This can be risky.
How DirectOffers Helps
Our AI-powered platform guides you through every clause of the APS, explaining what each means in plain language. Before submission, a licensed agent reviews your offer to ensure nothing is missed.
Ready to create your first offer? Our wizard makes it simple.