What is a Real Estate Contract?

Fee Simple Law can only complete the purchase or sale of property in accordance with the real estate contract entered into between the buyer and the seller. Therefore, it is extremely important that you understand your real estate contract before you sign it.

• Names - who is buying the property and who is selling the property? Make sure your full legal names are being used as these are the names that get registered on the land title certificate.
• Price - this is the price the parties have agreed to buy and sell the property for. A price may include a deposit which varies according to the cost of the property.
• Possession Date or Closing Date - this is the date that the transaction will be completed. This means the seller will vacate the property on this date and the land title certificate will be transferred into the buyer’s name so they can take ownership of the property. It is important to make sure this date is not on a weekend or holiday as we can only close transactions during regular business hours.
• Condition Dates - there can be a number of conditions on a contract but, typically, there are two condition dates that are in favour of the buyer.

The first is a property inspection condition which allows the buyer to inspect the property to the buyer’s satisfaction. The second is a financing condition which enables the buyer to speak with their bank or mortgage broker to confirm that they will be able to get a mortgage in order to pay the purchase price as identified in the real estate contract.

• Unattached goods - are items like the stove, fridge, microwave, dishwasher, washer and dryer. We recommend you clearly indicate the make and model of the appliances, and any unattached goods that are being sold with the property.
• The Real Property Report (also known as an RPR) – this is an important document which shows the property lines and any current improvements to the property such as the location of the house, garage, shed, deck, and fences. It is important that the RPR shows all current improvements and has a letter of municipal compliance. Failure to provide an RPR could result in the sale or purchase of the property being delayed. Please watch our separate video on RPRs.

As we mentioned, these are just a few elements of a real estate contract. We strongly recommend that you review the entire real estate contract with your real estate agent or lawyer prior to signing it.