Buying or selling a property? Whether it’s a home or a commercial space, the purchase agreement is one of the most important documents in your transaction. This legally binding contract outlines the terms of the deal and protects both the buyer and seller.
But what exactly should you be looking for in a purchase agreement? Here are the key elements you need to review before signing.
📌 Purchase Price and Deposit
The purchase price is the agreed-upon amount the buyer will pay for the property. This section should also specify:
- The deposit amount and when it is due
- Who is holding the deposit (usually a brokerage or lawyer’s trust account)
- Refund conditions if the deal falls through
Make sure the numbers align with your expectations and financing plan.
📌 Financing and Conditions
A purchase agreement should include financing conditions to protect the buyer. If you are securing a mortgage, look for:
- The financing deadline (how long you have to secure a mortgage)
- The amount of financing required
- Whether the contract is conditional on financing approval
Failing to meet these conditions could put your deposit at risk, so ensure the terms are clear.
📌 Possession Date
The possession date is when the buyer gets the keys and takes legal ownership of the property. Confirm that:
- The date aligns with your moving plans
- There is enough time to complete necessary paperwork
- You understand any conditions that could delay possession
Unexpected delays can be costly, so be sure this section is accurate.
📌 Attached and Unattached Goods
Not everything in the home or commercial property automatically stays with the sale. The contract should clearly list:
- Attached goods – Items that are permanently fixed, such as built-in appliances, lighting fixtures, and cabinets.
- Unattached goods – Items that can be removed, such as furniture, detached shelving, and personal belongings.
Disputes often arise when buyers assume certain items will remain. If you want something included, ensure it is listed in the contract.
📌 Home Inspection and Repairs
A home inspection condition allows the buyer to have the property professionally inspected before finalizing the purchase. Look for:
- Whether a home inspection is required
- The deadline for completing the inspection
- Who is responsible for any necessary repairs
If repairs are needed, ensure the agreement specifies:
- What exactly needs to be fixed
- Who will complete the work (seller, professional contractor, or buyer)
- The timeline for completion
- Any holdbacks (where funds are withheld until repairs are done)
Vague wording in this section can lead to disputes, so it’s best to be as specific as possible.
📌 Legal Obligations and Disclosures
In Alberta, sellers are legally required to disclose any material latent defects—hidden issues that could impact the property’s value or safety. These include:
- Major structural issues that aren’t visible
- Water damage or mold behind walls
- Unpermitted renovations
- Encroachments or zoning violations
The purchase agreement should outline what disclosures have been made by the seller. Buyers should also consider including a condition that allows them to review important legal documents like the real property report or condo documents.
📌 Holdbacks and Other Terms
A holdback is when part of the purchase price is held in trust until certain conditions are met, such as:
- Pending repairs
- Outstanding property taxes
- Tenant move-out agreements
These must be clearly defined in the contract. For example, instead of stating “Seller to fix windows,” the agreement should specify:
- Who will complete the work
- What standard the work must meet
- The deadline for completion
- What happens if the work is not completed (e.g., release of funds to the buyer)
Clear terms reduce confusion and protect both parties from potential legal disputes.
Final Thoughts
A purchase agreement is more than just paperwork—it’s a legal contract that affects your financial future. Buyers and sellers should carefully review every detail and seek legal advice when necessary.
Real estate lawyer Asa Hagel explains what to watch for in a contract and how to avoid costly mistakes.
Need help reviewing your purchase agreement? Connect with our team for expert legal and real estate advice.
📍 Got questions? @ARIVL.hq or visit www.arivl.ca for expert advice.
👉 Next up: The biggest legal disputes in real estate—and how to avoid them.
📞 Contact Asa Hagel for Legal Advice
Need expert guidance on your real estate transaction? Connect with real estate lawyer Asa Hagel at:
- 🏢 Law Firm: Barr LLP
- 📍 Location: 10123 99 St NW, Edmonton, AB T5J 3H1
- 📞 Phone: (780) 414-5400
- 📧 Email: ahagel@barrllp.com
- 🌐 Website: barrllp.com
For expert legal guidance on buying or selling real estate, reach out to Asa today.
