 Once you find your home or condo and wish to make an offer, the process will include quite a bit of paperwork. In fact, you should be asked to complete a total of four documents, some of which are legally binding. The most important is the Agreement of Purchase and Sale, as this document stipulates how the sale of the property is to proceed.
Prior to a purchase, your Realtor will advise you about representation and ask that you sign representation documents. These documents determine how you want your Realtor to represent you and are a legal contract. Your Realtor will be able to explain the different types of representation. At offer time you will also be asked to sign a document entitled "Confirmation of Co-operation and Representation". This stipulates to both Buyer and Seller how each Realtor is representing their client and that real estate fees will change hands. The Agreement of Purchase and Sale will include clauses, inclusions, exclusions, timelines and conditions, some of which could be noted on the MLS Listing. All of these stipulations found in the Offer are required to be followed by the Buyer and the Seller. Federal Law now also requires you to present Photo ID to your Realtor who will record the information for FINTRAC.
Once your offer has been accepted you will be required to submit a deposit, usually within 24 hours or one business day. Many times, your Realtor will ask you to have the deposit at offer time, so it can be presented to the Seller at the time of offer presentation. This can make your offer stronger, particularly if resale home inventory is low, or if you are in competition with other buyers. The deposit is part of your down payment; a sign of "good faith" to the Seller from the Buyer. It is generally in the range of 5% of list price, but can be any amount agreeable to the Seller. It must be in the form of a Certified Cheque or Bank Draft and is issued to the listing brokerage who holds the amount "in trust" until your closing date, when it is added to your down payment.
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