This is the contract of purchase and sale. It's six pages long and full of
legal terminology that can be confusing even if you bought or sold a property before.
I thought if I could find someone who was young,
had never bought or sold a property before,
had a short attention span,
was easily distracted,
and get them to understand this contract, then I could get anyone to understand it.
Hi everyone 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 two
consecutive years for the way I utilize video to sell my clients homes and
educate them as well. If you enjoy the content here please consider subscribing
to my channel, hit the thumbs up button for this video, and don't forget to hit
the bell so that you can be notified the moment I have a new video out. I want you
to be able to stay up to date on all the latest tips and insights into the
Vancouver real estate market so that you can become an expert too.
okay let's dive into it. Hi. Hi. What's your name? William. William have you ever bought or sold a
property before? No, I haven't. You have not? Yeah. So, you've never seen a contract of
purchase and sale before. Is that right? Okay. Well, I am going to walk you
through this contract. It's 6 pages long but how I'm gonna walk you through from
start to finish so that you understand it. Is that okay? Yeah.
so page one of the contract is actually simply an information page and doesn't actually
form part of the contract. It provides you with information and definitions of
the various terms that are found in the contract. For example, it tells you what a
contract is. What a deposit is. What completion and possession mean, and what
the title to a property is. Now of particular importance on this first page
which is the information page is this right here titled customary costs. Now,
William, if you are purchasing a home would you think that you needed to pay
anything else other than the purchase price of the home?
That's very interesting. A lot of people think that who've never bought or sold a
home before and even if they have they forget that there are additional costs
involved when you're purchasing a home. So, this lets both the buyer and the
seller know about those additional costs. You with me so far?
Excellent now we can move on to the next page which is actually page one of the
contract. Now the top portion of this page indicates the brokerage information
of the agent filling out the form. Next, we have the sellers information and the
buyers information. The middle section indicates the property address and it's
full legal description. Item one on this page indicates the purchase price, which
is very important, and item two indicates the deposit which is equally as
important. Now, William would you know how much to put down as a deposit?
Well, here in BC its typically five percent of the purchase price but it could be higher if
for example the buyer was wanting to signal to the seller that they were
solid in terms of their finances.
So, page two of the contract explains the terms
and conditions that the buyers and their agent have placed into the contract.
Some typical terms and conditions would be subject to inspection, or subject to
financing, or even subject to reviewing and receiving all of the strata
documentation if it happens to be a condo or townhouse.
Page 3 of the contract begins with item 4 and this is the completion date. That's the date that
the buyer and the seller mutually agree that the sale will complete at the
appropriate land title's office. The buyer and the seller don't need to
appear at the land title's office on that date because each of them will have
engaged a lawyer or a notary for the conveyance of the property and they will
handle the transferring of title and submission of all the appropriate documents.
How's the ice cream?
Item 5 is the possession date. Can you guess what that is?
Is it the day the Buyer takes possession of their home?
That's exactly right. This is really good.
Item six is the adjustment date. Now this is the date that the the buyer will assume and pay
all the taxes, rates, local improvement assessments, and any other charges for
the home and that date is the same date as the completion date in the contract.
Item seven explains the included items. This is anything that the buyer and
seller mutually agree will be included with the sale of the home. So this could
be fridge stove washer/dryer. What about ice cream? definitely ice cream if the buyer and seller
mutually agree. Item eight is really important because it states that the
home and all of the included items will be in substantially the same condition
as when the buyer last viewed the home. So, this could be the inspection day for
example if that's the date that the buyer was last in the home and that's
the date that they put in the contract.
Page four of the contract is simply an information page.
It highlights and defines nine different terms that are found in the contract.
Okay, William, page five... thank you. Page five of the contract
has some very important points. Now, item 20 is the assignment of remuneration.
This highlights how the listing brokerage and the buyers brokerage are
to be paid per the listing contract signed by the seller. Item 28 is the
restriction of assignment clause. This is a fairly new amendment to the contract
of purchase and sale it states that the contract cannot be assigned to anyone
else without written consent by the seller and the seller is entitled to any
profit of said assignment by the buyer or any subsequent assignee.
Now, item 21 is the agency disclosure. This highlights what agency relationship the seller has
with their agent and what agency relationship the buyer has with their agent.
all right, you can go back to playing Fortnight.
Hey babe.
We're on the last page.
All right, item 22 on page six is titled
acceptance irrevocable. This means that the contract is executed under seal and
the sellers acceptance of this contract is irrevocable.
For example, let's say there's a five-day subject removal period where the buyers
are doing their due diligence of inspection or whatever else may be in the contract.
The seller cannot break this contract even if they receive another offer from
another buyer. They are bound to this contract until the buyer either doesn't
remove subjects and the deal collapses or the buyer does remove subjects and
then the deal is firm. item 23 is spelled out in bold letters all capitalized
THIS IS A LEGAL DOCUMENT. READ THIS ENTIRE DOCUMENT AND INFORMATION PAGE BEFORE YOU SIGN.
before signing. And, watch this video, of course. It really can't be made any
clearer can it William? Item 24 is the offer acceptance time period this is the
period of time that the seller has to read and accept the contract or present
a counteroffer now this is a very important term. Many agents out there are
still under the impression that if the time period has elapsed they can simply
cross it out put a new one in and send the contract over to the other party.
Do you think this would be okay?
No. It's in the contract for a reason, right?
Exactly! It's in the contract for a reason.
The proper procedure, if the time period has elapsed, is for a new contract to be
drafted with the new time clause and sent to the other party for their
acceptance. And, that brings us to item 25 which is the acceptance this is where
the seller writes the date of their acceptance of the contract and their
signature. Now there's also a place for the seller to indicate whether or not
they're a resident of Canada. So, this is whether they are a resident or a
non-resident of as defined under the Income Tax Act.
And, that's it! We've made it through the contract. I hope you've enjoyed today's
video The Contract of Purchase and Sale Explained and hopefully you have a
better understanding of this important document. As always, if you enjoy the
content here please subscribe to my channel hit that thumbs up button and
don't forget to hit the bell so you can be notified the moment I have a new
video out. Thank you so much for watching. Have a fantastic day and remember,
This is where you Live. Love. Own Vancouver!