If you are in the process of buying a house in British Columbia, it's highly likely you will come across a contract of purchase & sale document. This document is used for producing a written contract in order to buy a house in BC. The document is legally binding and is used by both the buyer and seller within a transaction. A standard version of a contract of purchase and sale is published jointly through collaboration between the BC Branch of the Canadian Bar and the BC Real Estate Association (BCREA).
No matter where in British Columbia you are located, using a contract of purchase and sale document is standard practice. Even in areas of the province with their own real estate board, such as in Vancouver’s housing market which has the Real Estate Board of Greater Vancouver, using the BCREA contract of purchase and sale is still the standard practice.
Best 5 -Year Fixed Mortgage Rates in BC Select Mortgage Term: See More RatesThe reason this contract is so important is because it outlines key information on the agreement, the parties involved, and the property, along with the obligations that both parties have. Some of the most important details in a contract of purchase and sale document are:
If you need to change or add anything in the contract, this can be done through a contract of purchase and sale addendum. An addendum is especially useful when getting rid of certain sections and clauses in the contract, as it makes the document easier to read versus striking these items out.
This section includes the property’s street address, the city or town it is located in, the postal code, and the property’s Parcel Identifier (PID). A PID is a 9 digit code that is used when identifying a parcel of land within the land title registry in BC. As well, there is a separate box to fill out with the properties legal description, which describes the plot of land and legal boundaries associated with it.
W hen you are submitting an offer or a counter-offer, you are able to outline specific conditions before the contract is finalized. Two of the more common conditions are:
Subject to financing means that the transaction is contingent on the buyer being able to obtain the money needed to complete the purchase through a mortgage. Especially if you are not pre-approved, you risk potentially losing your deposit or facing legal action if you can’t complete the transaction and don’t have this condition in the contract.
Subject to home inspection means that the buyer is able to get a home inspection on the property, and if anything serious is found, the buyer can walk away from the property. This can save you potentially thousands of dollars in repairs.
The offered price the buyer decides on for the property will all depend on factors about the property and the overall real estate market. In terms of the deposit amount, the average amount tends to be around 5% within the British Columbia market.