Contract of Purchase and Sale - An Overview and Breakdown.

The Contract of Purchase and Sale (CPS) form in BC is the document that outlines the terms of the offer from a buyer to a seller in a real estate transaction. 
The contract is typically 6 pages long but you can add additional items you consider important known as Addendums.      
Contract pf Purchase and Sale | Real Estate BC | www.lolaoduwole.com
This is the standard first page you will find on the Contract of Purchase and Sale. It contains a general description of terms you will find later in the contract.

  1. DEPOSIT Not to be confused with your down payment, a deposit is essentially an offer of good faith to the seller that you are serious about purchasing their home – even though you still want to get a home inspection and your mortgage financing in place, before signing on the dotted line.
    Once you sign the accepted offer, the deposit is applied against the purchase price of the home – so it’s not technically an “extra cost”, but it’s still a part of your home buying budget. How much should your deposit be and where does it go when you make it? 
  2. COMPLETION - The completion date is the day that the buyer assumes title at Land Title Office. This is the day that closing costs and monies are due. The adjustment date is the day that the buyer assumes and is responsible for all taxes, utilities, rates, and assessments. This date is typically the same day as the possession day.
  3. POSSESSION - The possession date is the day that the buyer will have possession of the property.
    In the contract you will also have to specify a time that you will take possession, and whether you will have vacant possession or if existing tenancies will remain.
  4. TITLE A BC Title Search will provide the names and addresses of all registered owners of a property, the full legal description, and will identify all of the registered charges, mortgages and mortgage companies, liens and interests filed against a property. The transfer date is also provided showing when the property was purchased by the current owners.
  5.  CUSTOMARY COSTS Closing costs are one-time fees that the buyer of real estate must pay when they decide to purchase a property.
    Closing costs is an umbrella term for the many various fees related to purchasing a home.
    These costs include but are not limited to land or property transfer taxes, lawyer fees, inspection fees.
    They have to be paid upfront and, in most cases, can't be rolled into your mortgage. Generally, it is a good idea to budget between 3% and 4% of the purchase price of a resale home to cover closing costs. 
  6. CLOSING MATTERS - You will need to find a Notaries Public or Lawyer to prepare and Finalize documents pertaining to the purchase of your property.
  7. RISK - Home Insurance 
  8. FORM OF CONTRACT - 
  9. REALTOR CODE - Realtors are not permitted to have a financial interest in any property without disclosing in writing before entering into the agreement. 
  10. RESIDENCY - International Buyers MUST pay additional taxes when purchasing Real Estate in BC. 
  11. AGENCY DISCLOSURE - This is the section where you acknowledge who your chosen representation is. In this section, both the seller’s and buyer’s agents will be listed.



  1. PURCHASE PRICE - This is where you write how much you would like to purchase the property for. Yoou may not thisnk the property is worth as much as they state or you might think it is worth more but this is where you begin Negotiations if any for the property you want. 
  2. DEPOSIT - When the sellers accepts your price, there is usually a need for a good faith deposit to make sure you are a serious buyer. The acceptable deposit is about 5% of the purchase price on the line above. Be sure not to confuse your Deposit with your Down Payment. You don't lose this deposit, it is put toward the total purchase price of your home and you will see this amount when  you receive your State of adjustment. This line tells the seller when you are going to be ready to put the deposit on the home. Time periods may be : Upon Acceptance of Offer which means you give the deposit as soon as the sellers agrees to sell the property to you.  Upon Subject Removal - This is when you feel all subjects and Conditions have been satisfied and you are comfortable moving forward.
  1. TERMS AND CONDITIONS - This line continues on the next page where you have a blank sheet to write what your Subjects and Conditions of Sale are.  The terms and conditions section of the contract of purchase and sale is where a buyer would add the subjects (also known as conditions) that need to be fulfilled in order for them to proceed with handing in the deposit.  Typical subjects are: subject to financing, inspection, property disclosure statement, title, or strata documents. This area is also where you would add in any warrants, or additional terms.

                                 See EXAMPLES OF CONDITIONS on the form
  1. TERMS AND CONDITIONS - This line continues on the next page where you have a blank sheet to write what your Subjects and Conditions of Sale are.  The terms and conditions section of the contract of purchase and sale is where a buyer would add the subjects (also known as conditions) that need to be fulfilled in order for them to proceed with handing in the deposit.  Typical subjects are: subject to financing, inspection, property disclosure statement, title, or strata documents
  2. This area is also where you would add in any warrants, or additional terms.






  1. COMPLETION 
  2. POSSESSION
  3. ADJUSTMENTS
  4. INCLUDED ITEMS
  5. VIEWED - This is where you state the date on which you saw the property and if it was clean cannot be handed over in a dirty unkempt condition.
  6. TITLE
  7. TENDER - Forms of Payment
  8. DOCUMENTS
  9. SELLERS PARTICULARS AND RESIDENCY - A Buyer purchasing Canadian real estate from a non-resident Seller has an obligation to obtain from the Seller a Certificate of Compliance (also known as a “Tax Clearance Certificate”) or withhold a holdback from the gross sale proceeds if no Compliance Certificate is issued at the time of closing. Make a note; that the holdback is 25% of the gross purchase price not the net sale proceeds, no deductions allowed. Typically the holdback is 25% of the gross purchase price but this liability may increase to 50% where the real estate is depreciable property (a building used for rental or business purposes) or where the real estate was not held by the non-resident as capital property (for example, held for speculative purposes).


GST CERTFICATE


TIME

BUYER FINANCING

CLEARING TITLE


COSTS 

RISK - Home Insurance provides payment to the homeowner in the event of a loss. A loss may be due to damage from fire, theft or natural disasters. Any damage to the property will have an effect on the fair market value of the property, if not repaired. If you finance your home purchase, your lender will generally require you to have home insurance coverage in place. At closing, proof of home insurance required is provided to your Lawyer or Notary. Inadequate insurance or lack of insurance will delay your completion.

PLURAL

REPRESENTATIVES AND WARRANTIES


PERSONAL INFORMATION 
  1. ASSIGNMENT OF REMUNERATION
  2. RESTRICTION ON ASSIGNMENT OF REMUNERATION
  3. AGENCY DISCLOSURE

  1. ACCEPTANCE IRREVOCABLE
  2. THIS IS A LEGAL DOCUMENT
  3. OFFER
  4. ACCEPTANCE 


NEXT TOPIC : SUBJECT REMOVAL 



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Lola Oduwole

RE/MAX All Points Realty

101, 1020 Austin Avenue  Coquitlam,  BC  V3K 3P1 

Phone: 6048096317

lolaoduwole@yahoo.ca

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Phone: 6048096317

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