What is an Agreement of Purchase and Sale?

The Agreement of Purchase and Sale is the core legal document in any Ontario residential real estate transaction. It serves as the binding contract between buyer and seller, detailing every material term of the deal from purchase price and deposit amount through closing date and possession arrangements.

The APS typically includes several key components: the property description and legal address, the agreed purchase price, the deposit amount and payment timing, the closing or completion date, conditions precedent (such as satisfactory home inspection or financing approval), chattels and fixtures included in the sale, any assumed mortgages or liabilities, and disclosure obligations. The contract also specifies what documents the seller must provide and outlines the buyer's right of access for inspections.

Most residential real estate agents in Ontario use the standard form Agreement of Purchase and Sale developed by the Ontario Real Estate Association (OREA). This form is recognized across the province and provides consistent legal language that protects both parties. Once the buyer and seller both sign the APS and all conditions have been met or waived, the contract becomes fully binding and neither party can walk away without breach of contract consequences.

Understanding the terms and conditions in an APS is critical before signing, as it governs the entire transaction until closing. Most buyers and sellers work with agents or lawyers to review and negotiate the terms to reflect their specific needs and circumstances.