I am buying a home! What should be in my purchase agreement?
Although most real estate agents are very carful about completing purchase agreements on behalf of their clients, when buying at home it is still important to carefully review your purchase agreement to ensure that it is complete and accurate. Unlike the vast majority of legal agreements, purchase agreements for residential homes are drafted by real estate agents as opposed to real estate lawyers. It is not uncommon for real estate lawyers like us to receive a purchase and sale agreement for a home that is already signed but may include incorrect or inaccurate information. We then have to work with the parties involved to rectify the issue which can create unnecessary stress in what should be an exciting time!
KEY TERMS TO BE INCLUDED IN PURCHASE AGREEMENT
- The full legal names of all parties buying and selling (eg. both spouses/partners).
- The Purchase Price. If placing a mortgage on your new home, your mortgage broker or lender can set out a pre-approved mortgage amount which will indicate your budget when searching for a home. The purchase price will total your down payment, deposits made, and the mortgage advance.
- Deposit amounts paid by the Buyer, the date paid, and the method of payment should be included to ensure it is accounted for on closing.
- A list of all unattached goods to be included in the sale. Unattached goods are items not permanently attached to the property. These items, such as appliances, central air conditioning, or garage door openers, must be specifically listed in the agreement or they likely will not be left in the home on closing.
- A Completion Day. Choose a possession date that falls on a regular business day and not a weekend to facilitate a smooth possession day.
- Any subjects or conditions to closing. These are important and include financing, property inspection, and possibly the sale of your current home. You may wish to speak with your real estate lawyer in advance of signing your purchase agreement to determine if additional conditions should be added. There is no limit in terms of the number and nature of conditions that can be included.
- “Other terms” such as the Seller agreeing to provide a Title Insurance Policy in lieu of a Real Property Report by providing a credit to the Buyer for the cost of the policy. This can satisfy the Buyer’s lender requirements if a Real Property Report has not been ordered early enough to be delivered by the Completion Day. The Real Property Report is required to be provided by the Seller and so providing the Title Insurance credit to the Buyer meets that requirement.
- Any late interest that may be payable due to closing delays.
You should also review the Real Property Report before signing the purchase agreement to identify any issues with the property. These should be addressed prior to signing the purchase agreement in order to prevent last-minute issues at closing.
A Certificate of Title should also be obtained and carefully reviewed prior to signing the purchase agreement so that all restrictions on title such as easements and restrictive covenants are understood. Once the agreement is signed you are legally bound by any restrictions registered on title.
HOW CAN LIFT LEGAL HELP?
At Lift Legal, our real estate lawyers and paralegals assist with the purchase and sale of homes in St. Albert, Edmonton and all surrounding areas. We are here to assist you through the entire process. If you have any questions regarding what to include in your residential purchase agreement, please give us a call so that we can assist you and address any issues before it is too late.