Every purchase and sale is unique and there may be additional terms, conditions, and addendums that need to be added to a contract of purchase and sale. Especially when buying strata properties. Also, a contract of purchase and sale is primarily used for residential purposes. Different forms and contracts may be required for commercial sales, leases, and homes under construction.
The purchase price is the amount that the buyer is willing to pay to purchase the subject property. Depending on the market and property, the buyer may start with a lower price and will likely not negotiate above his or her ceiling price. While the purchase price is important to the seller, there are other factors that could favour a buyer besides having the highest purchase price.
The amount and the due date of the deposit depends on how it’s written in the contract. Typically, the deposit is about 5% of the purchase price. The deposit can be due a certain time period after acceptance or a certain time period after subject removal depending on how it is agreed upon.
It’s important to note that a contract is still binding without a deposit. A buyers’ deposit shows “good faith” and intent to move the purchase towards completion. Almost always, the buyers’ real estate brokerage holds the deposit in trust. When the transaction completes, the deposit then forms part of the buyers’ down payment amount.
Legally, completion is the date when title changes hands from the seller to the buyer in the Land Titles Office. The buyer is required to pay the amount on the statement of adjustments and the sale proceeds are transferred to the seller on the completion date.
Possession and adjustment are often written as the same date in the contract of purchase and sale. In the contract, the possession date and time is negotiated and agreed upon by the buyer and seller. Almost always, the seller won’t hand over the keys to the new buyer until the seller has received their funds. Therefore, possession always follows after completion. The adjustment date is often the same date as possession since it is the day utilities, property taxes, and strata fees get adjusted from the seller to the buyer.
Terms and conditions are items that are important to include in order to protect buyers and sometimes sellers as well. Terms are written in the contract and, if agreed upon, must be upheld by the parties. Conditions, also known as “subject-to’s”, are clauses that must be fulfilled or waived by the benefiting party in order for the transaction to proceed. It’s essential to communicate with your Realtor® to include terms and conditions that are important to you.
Included and excluded items must be in writing to avoid any conflicts down the road. An item can either be a fixture or a chattel. A fixture is any physical property that is permanently attached to the real property. A fixture cannot be easily moved. A chattel, on the other hand, is unattached and portable. For example, chairs, tables, couches, unless specifically written into the contract, would be considered chattels. The test for fixtures is objective and it is presumed to go with the property unless specifically excluded in the contract of purchase and sale.
If you are set on something you view during a showing and you’re not sure whether it’s a fixture or a chattel, be sure to include it in the list of inclusions in the contract. If you’re selling your place and want to make sure your favourite item(s) comes with you be sure to exclude the particular item(s) in the contract of purchase and sale.
Helpful hint: As someone who has bought her fair share of TV wall mounts. It is important to note that the actual TV is a chattel and goes with the seller. However, the TV wall mount is attached to the wall and is considered a fixture. Unless agreed to differently in the contract. Remember, always get it in writing!
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*Disclaimer: The topics of discussion, content and resources on this website are general information that may not be the right solution or advice for you specifically. Not intended to solicit buyers or sellers currently under contract with a brokerage.
*Stock images from Social Squares