I had so much fun making this video. Mostly because my son is the star. I hope you enjoy it and learn something as well.
This is a Contract of Purchase and Sale. It may only be 6 pages long but it is crammed full of legal terminology which can be confusing even if you’ve bought and sold properties before. I thought if I could find someone who was young and had never bought or sold a property before, was easily distracted, had a short attention span, and get them to understand this contract then I could get anyone to understand it.
I’m Craig Veroni with RE/MAX Masters Realty. I was named one of the top 50 video influencers in real estate, in North America, for the past 2 consecutive years for the way I utilize video to sell my client’s homes and educate them as well. If you enjoy the content here, please subscribe to my channel, hit that thumbs up button and don’t forget to click on that bell so you can be notified immediately when I have a new video out. I want you to be able to stay up to date on all the latest tips and insights in the Vancouver real estate market so you can become an expert too!
Ok. let’s dive into it. Hi. What’s your name? William. And you’ve never bought or sold a home before is that correct? No, I haven’t. Perfect. So, you’ve never seen a contract of purchase and sale before? No, I haven’t. Excellent. Well, I’m going to walk you through this contract from start to finish. Sound good? Sure. You are going to pay me the $50 bucks you promised me once we’re done, right? Of course. Let’s make sure we edit that out.
Page 1 of the contract is simply an information page and doesn’t actually form part of the contract. It provides you with information and definitions of the various terms used within the contract. For example, it defines what a contract is, what a deposit is, what completion and possession mean, and what the title to a property is. Of particular importance on the 1st page is item 6 titled Customary Costs. William, if you were purchasing a home, would you know there were additional costs other than the cost of the home? Right. And many people, even if they’ve bought or sold a property before forget about these additional costs. So, this lets both the buyer and the seller know about them. You with me so far?
Excellent. Now we can move onto the next page which is actually page 1 of the contract. The top portion highlights the brokerage information of the agent filling out the form. Next, we have the Seller’s information and the Buyer’s information. The middle section explains the property’s address and full legal description. Item 1 indicates the purchase price and 2 the deposit. Would you know how much to put down as a deposit? Well, here in BC it is typically 5% of the purchase price but it could be more if the buyer was wanting to signal they were solid in terms of their finances.
Page 2 of the contract explains the terms and conditions the buyers and their agents have placed in the contract. Some typical conditions are subject to financing, subject to inspection, and subject to reviewing all strata documentation if it’s a condo or townhome.
Page 3 of the contract begins with item 4 which is the completion date. This is the date the buyer and seller mutually agree the sale will complete at the appropriate land titles office. The buyer and seller do not need to appear at the land titles office as each of them will have engaged a lawyer or notary for the conveyance of the property and they will look after the transferring of title and submission of all documents.
Item 5 is the possession date this is the date the buyer takes possession of their new home. Item 6 is the Adjustment date. This is the date the buyer will assume and pay all taxes, rates, local improvement assessments, fuel utilities and other charges for the home. This date in the contract is the same as the completion date.
Item 7 explains the included items. These are items such as fridge, stove, washer/dryer and anything else the buyer and seller agree will be part of the sale of the home. It also highlights anything that shall be excluded from the sale. For example, there may be a chandelier the seller wishes to take with them to their new home. It will be listed here in the contract so there is no confusion upon move-in day for the buyers.
Item 8 is important because it states the home and all included items will be substantially in the same condition on the possession date as to when the buyer’s last viewed. This could be the date of the inspection or the date they were last in the home to view it.
Page 4 of the contract is essentially an information page. It highlights and defines nine different terms found in the contract.
Page 5 of the contract has several important points. item 20 is the Assignment of Remuneration. This highlights how the listing brokerage and buyer’s agent brokerage are to be paid per the listing contract signed by the seller.
Item 20 A is the Restriction of Assignment clause. This is a fairly new amendment to the contract. It states the contract cannot be assigned to anyone else without written consent from the seller and the seller is entitled to any profit of said assignment by the buyer or any subsequent assignee.
Item 21 is the Agency Disclosure. This indicates what agency relationship the Seller has with the listing agent and what agency relationship the Buyer has with their agent.
We’re on the last page! Item 22 on page 6 of the contract is titled Acceptance Irrevocable. This means the contract is executed under seal and the Seller’s acceptance of the contract is irrevocable. For example, if there is a 5-day subject removal period where the buyer is doing their due diligence of inspection and whatever else may be in the contract, the seller cannot break the contract if they receive an offer from another buyer. They are bound to this contract until the buyer either doesn’t remove subjects and the deal collapses or they remove subjects and the deal is firm.
Item 23 spells out in bold print all capitalized, This is a legal document. Read this entire document and information page before you sign and watch this video, of course. It can’t be made any clearer.
Item 24 is the Offer acceptance time period. This states how long the seller has to read and accept the contract or present a counter-offer. This is a very important term. Many agents out there are still under the impression that if this time period lapses they can still use the same contract, cross out the old-time and put a new one in. Do you think this would be ok? “No. I mean it’s in the contract for a reason, right? Exactly! It’s in the contract for a reason. This is a hard no! If your agent is doing this they are writing a contract that can be contested and is null and void. Simply put, the agent is putting themselves and more importantly you at huge risk by doing this. The proper procedure is for the agent who let time expire to ask the other agent to re-submit the offer with a new offer acceptance time and then have either the buyer or seller accepts it.
Item 25 is Acceptance. This is where the seller writes the date of their acceptance of the contract and places their signature. There is also now a spot for the seller to declare their residency. Whether the seller is a resident of Canada or a Non-Resident as defined under the Income Tax Act.
And, that’s it! We’ve made it through the contract and hopefully, you have a better understanding of this important document.
I’m Craig Veroni with RE/MAX Masters Realty. I was named one of the top 50 video influencers in real estate, in North America, for the past 2 consecutive years for the way I utilize video to sell my client’s homes and educate them as well. If you enjoy the content here, please subscribe to my channel, hit that thumbs up button and don’t forget to click on that bell so you can be notified immediately when I have a new video out. I want you to be able to stay up to date on all the latest tips and insights in the Vancouver real estate market so you can become an expert too!
Ok. let’s dive into it. Hi. What’s your name? William. And you’ve never bought or sold a home before is that correct? No, I haven’t. Perfect. So, you’ve never seen a contract of purchase and sale before? No, I haven’t. Excellent. Well, I’m going to walk you through this contract from start to finish. Sound good? Sure. You are going to pay me the $50 bucks you promised me once we’re done, right? Of course. Let’s make sure we edit that out.
Page 1 of the contract is simply an information page and doesn’t actually form part of the contract. It provides you with information and definitions of the various terms used within the contract. For example, it defines what a contract is, what a deposit is, what completion and possession mean, and what the title to a property is. Of particular importance on the 1st page is item 6 titled Customary Costs. William, if you were purchasing a home, would you know there were additional costs other than the cost of the home? Right. And many people, even if they’ve bought or sold a property before forget about these additional costs. So, this lets both the buyer and the seller know about them. You with me so far?
Excellent. Now we can move onto the next page which is actually page 1 of the contract. The top portion highlights the brokerage information of the agent filling out the form. Next, we have the Seller’s information and the Buyer’s information. The middle section explains the property’s address and full legal description. Item 1 indicates the purchase price and 2 the deposit. Would you know how much to put down as a deposit? Well, here in BC it is typically 5% of the purchase price but it could be more if the buyer was wanting to signal they were solid in terms of their finances.
Page 2 of the contract explains the terms and conditions the buyers and their agents have placed in the contract. Some typical conditions are subject to financing, subject to inspection, and subject to reviewing all strata documentation if it’s a condo or townhome.
Page 3 of the contract begins with item 4 which is the completion date. This is the date the buyer and seller mutually agree the sale will complete at the appropriate land titles office. The buyer and seller do not need to appear at the land titles office as each of them will have engaged a lawyer or notary for the conveyance of the property and they will look after the transferring of title and submission of all documents.
Item 5 is the possession date this is the date the buyer takes possession of their new home. Item 6 is the Adjustment date. This is the date the buyer will assume and pay all taxes, rates, local improvement assessments, fuel utilities and other charges for the home. This date in the contract is the same as the completion date.
Item 7 explains the included items. These are items such as fridge, stove, washer/dryer and anything else the buyer and seller agree will be part of the sale of the home. It also highlights anything that shall be excluded from the sale. For example, there may be a chandelier the seller wishes to take with them to their new home. It will be listed here in the contract so there is no confusion upon move-in day for the buyers.
Item 8 is important because it states the home and all included items will be substantially in the same condition on the possession date as to when the buyer’s last viewed. This could be the date of the inspection or the date they were last in the home to view it.
Page 4 of the contract is essentially an information page. It highlights and defines nine different terms found in the contract.
Page 5 of the contract has several important points. item 20 is the Assignment of Remuneration. This highlights how the listing brokerage and buyer’s agent brokerage are to be paid per the listing contract signed by the seller.
Item 20 A is the Restriction of Assignment clause. This is a fairly new amendment to the contract. It states the contract cannot be assigned to anyone else without written consent from the seller and the seller is entitled to any profit of said assignment by the buyer or any subsequent assignee.
Item 21 is the Agency Disclosure. This indicates what agency relationship the Seller has with the listing agent and what agency relationship the Buyer has with their agent.
We’re on the last page! Item 22 on page 6 of the contract is titled Acceptance Irrevocable. This means the contract is executed under seal and the Seller’s acceptance of the contract is irrevocable. For example, if there is a 5-day subject removal period where the buyer is doing their due diligence of inspection and whatever else may be in the contract, the seller cannot break the contract if they receive an offer from another buyer. They are bound to this contract until the buyer either doesn’t remove subjects and the deal collapses or they remove subjects and the deal is firm.
Item 23 spells out in bold print all capitalized, This is a legal document. Read this entire document and information page before you sign and watch this video, of course. It can’t be made any clearer.
Item 24 is the Offer acceptance time period. This states how long the seller has to read and accept the contract or present a counter-offer. This is a very important term. Many agents out there are still under the impression that if this time period lapses they can still use the same contract, cross out the old-time and put a new one in. Do you think this would be ok? “No. I mean it’s in the contract for a reason, right? Exactly! It’s in the contract for a reason. This is a hard no! If your agent is doing this they are writing a contract that can be contested and is null and void. Simply put, the agent is putting themselves and more importantly you at huge risk by doing this. The proper procedure is for the agent who let time expire to ask the other agent to re-submit the offer with a new offer acceptance time and then have either the buyer or seller accepts it.
Item 25 is Acceptance. This is where the seller writes the date of their acceptance of the contract and places their signature. There is also now a spot for the seller to declare their residency. Whether the seller is a resident of Canada or a Non-Resident as defined under the Income Tax Act.
And, that’s it! We’ve made it through the contract and hopefully, you have a better understanding of this important document.