Going on the hunt for a new home is likely one of the most exciting adventures in a person's life. Putting pen to paper and signing an offer to make the purchase official can make your heart race and your palms sweat. But that excitement can quickly turn to angst should you realize something may be amiss with the house or that perhaps you are over your budget. So, what happens when a purchaser wants to get out of an Agreement of Purchase and Sale?
Provinces regulate real estate laws via individual real estate boards. In Ontario, the Ontario Real Estate Association (OREA) speaks to legal documents like an Agreement of Purchase and Sale. Once a seller agrees to an offer from a purchaser and the documents bear the signatures of those involved in the deal, it becomes a legal, binding document and is difficult to rescind unless there are conditions in the offer.
How conditions can help
When an offer contains certain stipulations or conditions, it may give you a way out of a deal. You may safeguard yourself by making the offer conditional upon:
- being able to secure financing
- selling your home
- having a home inspection of the property
You might also be able to get out of a signed agreement if you don't include a deposit with the offer – in other words, you make no consideration. If you waive all conditions in an offer and still choose to walk away from the deal, you will likely lose any deposit. There is also always the potential that if the seller suffers financially because of a lost deal, he or she could attempt to sue the purchaser.
Cooling off period for condos
If you and the seller ink a deal for a single family home, there is usually no cooling off period – or a definite time in which you are allowed to change your mind. That is typically not so with condominium purchases, which usually come with a 10-day cooling off condition. This is not always the case, however, and you would do well to read the entirety of any contract.
Where to turn for support
The real estate industry is rife with legalities. The dynamics of an Agreement of Purchase and Sale may be easier to understand with the assistance of legal counsel. When Ontario residents bring an experienced lawyer into the picture prior to or during a real estate deal, they may significantly increase the odds of avoiding the financial consequences of mistakes that can be made during this time.