Agreement of Purchase and Sale
A legally binding document, the Agreement of Purchase and Sale is one of your best protections if you purchase from a builder (in fact, you should avoid any builder unwilling to sign a contract with you). This document details every aspect of your new home purchase, including:
- Everything that is included, right down to appliances and landscaping
- A schedule of your payments to the builder and, if required, your city or township
- The closing date, which is when you take possession of your home
- If you are buying a condo, the building registration (when the condominium is registered as a corporation and when you receive title)
Do not sign an Agreement of Purchase and Sale (or any other legally binding document) until your lawyer or notary has first reviewed it. No matter what a real estate agent or builder's representative might say, their statements are binding only if they also appear in the Agreement of Purchase and Sale.
Learn more about real estate sales contracts.
You can make two kinds of offers to your builder:
- A firm price offer (you are bound to that price once the builder accepts)
- A conditional offer (valid only if certain conditions are met, such as securing financing, selling your existing home or getting a satisfactory building inspection)
The builder has a fixed amount of time to respond to your offer by either accepting it as is, rejecting it outright or making a counter-offer. If you receive a counter-offer, you also will have a specified amount of time in which to respond.
Seal the deal with your deposit.
A deposit-usually 5% to 15%-needs to accompany your offer. Not only does your deposit show that you're serious about buying, it also protects your builder in case the deal doesn't go through.
It can seem risky to put down thousands of dollars on a home that hasn't been built yet. Many provinces now offer insurance on deposits for new homes. If your province doesn't, see if your builder does. If not, you may be able to protect your deposit by purchasing a new home deposit bond from an insurance company. Learn more about deposit insurance.
IMPORTANT NOTE |
The above information is meant only as a guideline. It is not meant to replace proper legal or real estate guidance. It is strongly recommended that you seek the appropriate professional advice before signing any contract.
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