The Agreement of Purchase and Sale is the most important document in any Canadian real estate transaction. Whether you are buying your first home or your fifth investment property, understanding every section of the APS protects you from costly mistakes.
What is an Agreement of Purchase and Sale?
An APS is a legally binding contract that lays out every term of a real estate deal. In most provinces, standard forms are provided by the local real estate board — in Ontario, the Ontario Real Estate Association (OREA) Form 100 is the standard.
| Element | What It Covers |
|---|---|
| Parties | Legal names of buyer(s) and seller(s) |
| Property | Legal description, municipal address, PIN |
| Purchase price | Agreed price for the property |
| Deposit | Amount, due date, and who holds it in trust |
| Closing date | When title transfers and the buyer takes possession |
| Irrevocability | Deadline for the other party to accept the offer |
| Conditions | Clauses that must be fulfilled before the deal is firm |
| Inclusions / exclusions | What stays with the house vs what the seller takes |
| Chattels & fixtures | Specific items negotiated (appliances, light fixtures, window coverings) |
| Special clauses | Anything else negotiated (seller rent-back, early access, etc.) |
Standard APS forms by province
Each province uses its own standard real estate forms:
| Province | Standard Form | Managed By |
|---|---|---|
| Ontario | OREA Form 100 (freehold), Form 101 (condo) | Ontario Real Estate Association |
| British Columbia | Contract of Purchase and Sale (CPS) | BC Real Estate Association |
| Alberta | Residential Purchase Contract | Real Estate Council of Alberta / AREA |
| Quebec | Promise to Purchase (Promesse d’achat) | OACIQ / Organisme d’autoréglementation du courtage immobilier du Québec |
| Manitoba | Offer to Purchase | Manitoba Real Estate Association |
| Saskatchewan | Offer to Purchase | Saskatchewan Real Estate Commission |
| Atlantic provinces | Offer to Purchase (varies) | Provincial real estate associations |
Key sections of the APS
Purchase price and deposit
The purchase price is what the buyer agrees to pay. The deposit — typically held in a trust account — shows the buyer’s good faith:
| Market Condition | Typical Deposit |
|---|---|
| Balanced market | 3%–5% of purchase price |
| Seller’s market (GTA, Vancouver) | 5%–10% or more |
| Rural / slower markets | 1%–3% |
The deposit is credited toward the purchase on closing. If the buyer breaches the APS (backs out without a valid condition), the deposit may be forfeited to the seller.
Conditions (buyer protections)
Conditions are the most important part of the APS for buyers. Common conditions include:
| Condition | Purpose | Typical Timeline |
|---|---|---|
| Financing | Buyer must obtain mortgage approval | 5–10 business days |
| Home inspection | Buyer has property professionally inspected | 5–7 business days |
| Status certificate review (condos) | Buyer’s lawyer reviews condo corporation financials and bylaws | 10 business days |
| Appraisal | Lender requires the property to appraise at or above purchase price | Included in financing condition |
| Sale of buyer’s property | Offer conditional on buyer selling current home | 30–90 days (weak condition) |
| Insurance | Buyer must secure satisfactory home insurance | 5–10 business days |
Each condition has a condition date — the deadline by which the buyer must waive or not fulfill the condition. If the buyer does not waive by the deadline, the deal typically falls through and the deposit is returned.
Inclusions and exclusions
Anything not permanently attached to the property should be explicitly addressed:
Common inclusions (items that stay):
- Kitchen appliances (fridge, stove, dishwasher)
- Window coverings (blinds, curtains)
- Light fixtures
- Garage door opener and remotes
- Central vacuum and accessories
Common exclusions (items the seller takes):
- Personal property and furniture
- Specific light fixtures or chandeliers
- Mounted TVs and brackets
- Garden sheds (if not permanently affixed)
Closing date
The closing date is when:
- Title transfers from seller to buyer
- The buyer’s mortgage funds are distributed
- The buyer receives the keys
Standard timelines range from 30 to 90 days after the APS is signed, though this is negotiable. Some transactions close in as little as two weeks (cash purchases) or extend to several months (new construction).
Firm vs conditional offers
| Feature | Conditional Offer | Firm Offer |
|---|---|---|
| Conditions | One or more (financing, inspection, etc.) | None |
| Binding | Only after all conditions waived | Immediately upon acceptance |
| Deposit at risk | Protected until conditions expire | At risk immediately |
| Competitiveness | Weaker in multiple-offer situations | Strongest offer type |
| Risk to buyer | Low (can walk away via conditions) | High (no easy exit) |
| When used | Balanced or buyer’s markets | Hot seller’s markets, bidding wars |
Should you submit a firm offer?
Firm offers are tempting in competitive markets but dangerous:
- You may overpay with no appraisal condition
- You cannot walk away if the inspection reveals major issues
- If your mortgage falls through, you are still on the hook
Risk mitigation for firm offers:
- Get a pre-approval with a rate hold (not just a pre-qualification)
- Do a pre-offer inspection if the seller allows it
- Review condo status certificates before offering
- Have your lawyer review comparable sales to avoid overpaying
- Ensure you have sufficient funds to close even if financing changes
The APS timeline: from offer to closing
| Step | Timing | What Happens |
|---|---|---|
| Offer submitted | Day 0 | Buyer submits APS to seller’s agent |
| Irrevocability expires | Day 0–1 | Seller must accept, reject, or counter by this deadline |
| Acceptance | Day 0–3 | Both parties sign — deal is alive (conditional or firm) |
| Condition period | Day 1–10 | Buyer fulfills conditions (inspection, financing) |
| Conditions waived | Day 5–10 | Buyer signs condition waiver — deal becomes firm |
| Lawyer prepares closing | Day 10–closing | Title search, mortgage instructions, closing documents |
| Final walkthrough | 1–2 days before closing | Buyer inspects property one last time |
| Closing day | As specified in APS | Title transfers, mortgage funds disbursed, keys transferred |
Ontario-specific APS considerations
Ontario’s OREA Form 100 includes several notable features:
- Buyer representation acknowledgement — confirms who represents the buyer
- Title search period — 30 days from acceptance for the buyer’s lawyer to examine title (separate from conditions)
- UFFI disclosure — seller must disclose if urea formaldehyde foam insulation was used
- HST clause — specifies whether HST is included in the purchase price (critical for new builds)
- Assignment clause — determines whether the buyer can assign the APS to another party before closing
Quebec differences: the Promise to Purchase
Quebec’s real estate process is distinct from the rest of Canada:
| Feature | Rest of Canada (APS) | Quebec (Promise to Purchase) |
|---|---|---|
| Legal system | Common law | Civil law (Civil Code of Quebec) |
| Standard form | APS / Offer to Purchase | Promesse d’achat |
| Closing handled by | Lawyer | Notary (mandatory) |
| Land registration | Land Titles / Registry Office | Quebec Land Register |
| Transfer tax | Land Transfer Tax | Welcome Tax (droits de mutation) |
| Inspection practice | Condition in the offer | Often done pre-offer |
Common APS mistakes to avoid
- Waiving the financing condition without firm approval — a pre-approval is not a commitment; the lender can still decline
- Not specifying inclusions clearly — “all appliances” is vague; list each item by brand and model if possible
- Too-short condition timelines — five business days for financing is tight; ensure your broker can deliver
- Ignoring the title search — your lawyer may find liens, easements, or encroachments that affect value
- Forgetting closing costs — land transfer tax, legal fees, and adjustments can add 1.5%–4% to the purchase price
- Not understanding irrevocability — if you submit an offer irrevocable for 24 hours, you cannot retract it during that period
What to do if the other party breaches the APS
If the seller breaches (refuses to close):
- The buyer can sue for specific performance (forcing the sale) or damages
- The buyer may also recover legal costs, moving expenses, and the difference in price if they buy elsewhere at a higher cost
If the buyer breaches (backs out without valid condition):
- The seller can keep the deposit
- The seller can sue for additional damages (carrying costs, relisting costs, price difference if sold for less)
- In practice, most disputes settle on forfeiting the deposit rather than going to court