Are you selling or buying your house without a Real Estate Agent?
Here are some tips to consider when completing the purchase and sale contract.
Although the benefits of using a real estate agent to help with your property sale are many, you may have decided to sell your property on your own. This means you will have to complete a purchase and sale contract. Here are some things to consider.
The following is not a substitute for legal advice and is being provided as general information only.
An agreement to sell a house/condo has to be in writing. This means that you need to have a written contract between you and the buyer that sets out the terms of the sale like the name of the buyer, the property address, the sale price, and the possession day. Everything you agree to has to be in in writing. So if there is anything that you agreed to that is not included in the contract, then it is not enforceable. For example, if you agree to repair a toilet then you must include this as a term. Please contact my office if you require a form of contract.
Be sure to list everything that is included with the sale and everything that is excluded in the appropriate section of the contract.
Be sure to consider any term requiring that you provide the buyer with a Real Property Report with evidence of municipal compliance.
The transfer of the title will be made according to the contract that you sign. Once the contract is signed, the terms cannot be changed unless the buyer also agrees to the change. Your contract has already been signed – any changes now must be made by way of amendment.
The contract is usually conditional on certain events. There are buyer’s conditions such as subject to financing being approved or completing a home inspection. There are also seller’s conditions such as subject to finding a new home.
There should be usually 2 weeks between condition day and completion day to ensure a timely closing
The buyer/seller will then have to address the conditions listed in the contract. Once they are ready to remove them, the conditions must be removed by providing written notice to the other party and then that is when the contract is final. If the conditions are not removed in writing prior to the deadline, the contract dies.
Note re buyer: A pre-approval does not mean an approval for the purchase of this particular property – they need to be approved to buy this specific property.
Once the conditions are removed, the agreement is final and if you don’t go through with the sale the buyer can sue you for damages/ the buyer does not complete the purchase then you can sometimes retain the deposit paid and sue the buyer for damages;
Once the contract is final, please send your lawyer the sale contract and the condition removal form. Your lawyer will start the paperwork to complete the transfer of property.
An Initial Deposit should be paid to the Seller’s lawyer via bank draft – please keep proof of payment. It is necessary to have a deposit paid at the time of the offer to make a valid contract.
Completion/Closing/Possession – This is generally the same day which is the day the seller gets paid and the buyer gets the keys.
Please ensure that your signature is witnessed and the dates are inserted and the lawyer information as well.
The seller has to be on title to the property and has to have the authority to sell the property otherwise the transaction can’t be completed. All parties on title must sign the paperwork. If there is one person on title and that person is married, their spouse usually has to sign as well even if they are not on title. If the seller is deceased, all of the required probate documents should be complete.
You must disclose any defects with the property to the buyer. If the buyer is aware of any defects or potential assessments (if a condo) they should advise their mortgage lender.
The seller has to be able to pay off whatever financial encumbrances are registered on title. Normally a realtor would check this when they list the property. Check that the sale proceeds will be enough to pay off any mortgage or loan secured against the property plus applicable penalty. You can contact your mortgage lender for further information.
Condo only – You will be responsible for any special assessments that are passed by resolution (not due but motion passed) up to noon on the possession date (not up until you sign the contract) unless you agree otherwise.