The OREA Agreement of Purchase and Sale Explained: Everything You Need to Know
The Ontario Real Estate Association (OREA) has developed a standard form of Agreement of Purchase and Sale (APS) that is commonly used in real estate transactions in the province of Ontario. This document is the foundation of any real estate transaction and outlines the terms and conditions of the sale. In this article, we will provide a comprehensive overview of the OREA Agreement of Purchase and Sale and what you need to know if you are buying or selling a property in Ontario.
What is the OREA Agreement of Purchase and Sale?
The OREA Agreement of Purchase and Sale is a legal document that outlines the terms and conditions of the sale of a property in Ontario. It is a binding contract that is signed by both the buyer and seller, and outlines the details of the transaction including the purchase price, closing date, and any conditions that must be met before the sale can be completed.
Why is the OREA Agreement of Purchase and Sale Important?
The OREA Agreement of Purchase and Sale is important because it protects both the buyer and seller by clearly outlining their obligations and responsibilities. It provides a framework for the transaction and helps to avoid any misunderstandings or disputes that may arise during the real estate transaction.
What are the Key Components of the OREA Agreement of Purchase and Sale?
The OREA Agreement of Purchase and Sale includes several key components that both the buyer and seller must be aware of. These components include:
1. Purchase Price: This is the amount of money that the buyer has agreed to pay for the property.
2. Closing Date: This is the date by which the sale must be completed. It is typically 30-90 days after the offer is accepted.
3. Deposit: This is the amount of money that the buyer must pay to the seller as a sign of good faith. It is typically 5-10% of the purchase price and is usually held in trust by the seller`s lawyer.
4. Conditions: These are any requirements or stipulations that must be met before the sale can be completed. Common conditions include obtaining financing, home inspection, and approval of the sale by a lawyer.
5. Chattels and Fixtures: Chattels are moveable items such as appliances and furniture that are included in the sale, while fixtures are attached to the property and cannot be removed without damaging the property.
6. Closing Costs: These are the fees associated with the sale, including legal fees, land transfer taxes, and other expenses.
What are the Different Types of Conditions?
The OREA Agreement of Purchase and Sale allows for several types of conditions that may be included in the contract. These conditions include:
1. Financing Condition: This condition states that the sale is contingent upon the buyer obtaining financing to complete the purchase.
2. Home Inspection Condition: This condition allows the buyer to have the property inspected by a professional home inspector to ensure that it is in good condition.
3. Lawyer Approval Condition: This condition allows both the buyer and seller to have their respective lawyers review and approve the contract before it becomes binding.
4. Sale of Buyer`s Property Condition: This condition allows the buyer to complete the sale of their existing property before completing the purchase of the new property.
The Bottom Line
The OREA Agreement of Purchase and Sale is a crucial document that outlines the terms and conditions of a real estate transaction in Ontario. As a buyer or seller, it is important to understand the components of the agreement and the different types of conditions that may be included. By understanding the agreement, you can ensure that the transaction proceeds smoothly and without any unforeseen issues. If you have any questions or concerns regarding the OREA Agreement of Purchase and Sale, it is recommended that you seek the advice of a qualified real estate lawyer or agent.