Hey Bōde Sellers! If you’re in the offer stage of the listing process – congratulations!! Everything you have done so far has led you to receiving an offer on your home. In order to make sure you are armed with all the information you’ll need to close the deal, Bōde’s VP of Enterprise Sales, Jeff Jackson, walks through the entire purchase agreement for a single family home transaction in Alberta.
By highlighting key areas to focus on and what information should be included, Bōde sellers are empowered with in-depth knowledge about the residential purchase contract and are able to feel confident taking control of the offer process. The online offer and contract process is made simple and convenient on Bōde by utilizing DocuSign to streamline the paperwork – no trees required!
Watch Jeff walk through the Purchase Agreement here:
Breaking down the purchase agreement
This information is for Bōde Sellers in the province of Alberta selling a single family home
Contract Information & Section 1: The Property
- Contract Number – not overly important. Your buyer or buyer’s representative may fill this out. It can be useful for addendums or amendments later on.
- Names of the Seller(s) and Buyers(s)
Section 1: The Property:
This includes details about the home, such as the municipal address and legal land description (this can be found on your land title document). The sections 1.1 (b) and (c) are very important to read and fill out carefully. They include:
- Unattached goods: this is where you would list unattached items that are included as part of the offer. Examples may include appliances.
- Attached goods: this is where you would list attached items that you intend to take with you upon sale of the home: Examples may include chandeliers or built in dart boards.
Section 2: Purchase Price & Completion Day
The purchase price of the home (inclusive of GST) is listed under this section in 2.1.
It is important to also closely note sections 2.3 and 2.4. Section 2.3 outlines the the completion day (also known as closing or possession day) and Section 2.4 specifies that the property will be in the same condition as when the contract was initially accepted on the completion day. This includes that any attached and unattached goods will be in normal working order.
Section 3: General Terms
This section covers standard terms that will be applied to the agreement. The ones most important to note are 3.1 (f) and 3.1 (m).
3.1 (f) states that the seller has a duty to disclose known Material Latent Defects. Material Latent Defects are defects in the property that are not discoverable through a reasonable inspection. They are material in the fact that they are substantial or important, and latent due to the fact that they are hidden. Examples may include a basement that was developed without a permit, or if every Spring your basement floods. These items would have already been disclosed to Bōde as part of the listing flow.
3.1 (m) indicates which brokerage (Bōde or the buyer’s brokerage) will provide this contract to lawyers upon closing (also known as conveyancing). Typically in real estate it is the seller’s brokerage that provides conveyancing but it could be either seller or buyer’s brokerage.
Section 4: Deposits
Section 4 is all about the deposits. Typically, the listing brokerage (in this case Bōde) would be the trustee for deposit money but this can be whatever the buyer and seller agree upon which may be the buyer’s brokerage or a lawyer. Whomever is selected to hold the deposit is indicated in Section 4.2.
Section 4.3 specifies the amount of the deposit, the method of payment, and the date by which the deposit will be paid. The method of payment most often certified funds, but can be a wire transfer or bank draft. It is very important to note the deadline for delivering that deposit. If a buyer fails to deliver the deposit by the specified date, that would give the seller grounds to cancel the deal and potentially accept another offer.
Section 5: Land Title
The Land Title Section states that at time of closing the land title will be free of all encumbrances, liens, and interest. For example, things like restrictive covenants will carry on with the property, whereas things like a mortgage will need to be discharged before the property can be sold.
Section 6, 7: Representations & Warranties, Dower
Section 6: Representations and Warranties are provincial standard items.
Section 7 is quite important as Dower Rights can impact the sale of a home. During the listing process with Bōde you will have already been asked if Dower applies. If there is only one name registered on title and you are legally married, Dower likely applies and you will have needed to complete a Dower Consent and Acknowledgment form.
The buy side will typically not know yet if Dower applies and so as the seller, if Dower does apply, you will need fill in a date in Section 7.1 (b). This date indicates that you will have a Dower Consent and Acknowledgment form sent to the buyer or buyer’s representative before the date specified. Filling out this section allows the buyer to be aware that Dower does apply and that they will receive the proper documentation by the date in the contract.
Section 8: Conditions
Conditions are important to note on the purchase agreement. The most popular buyer conditions: Financing, Property Inspection, and Sale of Buyer’s Property are pre-filled out on the contract. Should these apply, the buyer would simply fill out the information and condition days under each to specify when the condition will need to be met. Section 8.2 (d) allows the buyer to fill in any additional conditions that they like.
As a seller, Section 8.3 allows for any conditions on the sell side that will benefit you as the seller. Most typically seen here is when the contract is for a backup offer and the seller indicates that the acceptance of this offer is subject to the collapse of offer number one. This ensures that the seller is not contractually obligated to sell their home to two different parties.
Section 9: Attachments & Additional Items
This section shows a number of schedules that might be attached to the offer. The most common is the Sale of Buyer’s Property Schedule. Sellers typically would not want to accept an offer that is subject to the sale of a buyer’s home without knowing some details about that subject. If your offer is subject to sale of a buyer’s home, reach out to us and we are happy to help you navigate that process.
Section 10: Closing Process
The Closing Process is how the buyer and seller will work together towards closing. These are all provincial standard agreements whether you are presented with a PDF offer or an offer online through the Bōde platform.
Section 11, 12, 13: Insurance, Remedies, Notice & Documents
These are provincial standard terms, read through for clarity but no action is required.
Section 14: Authorization
The Authorization Section may indicate Jeff Jackson or Bōde under the seller’s brokerage when filled out by a buyer or buyer’s representative. It may also indicated that you as the seller are self-represented. Either is acceptable for the contract.
Section 15, 16: Confirmation of Contract Terms, Legal Obligations Begin
Section 15 requires another set of initials (apart from the initials required on the bottom of each page). This section states that the agreement stands on its own and that everything needs to be in writing. This means that any side deal or things agreed to verbally are not contractually binding unless written into this agreement. Everything that has been negotiated should be reflected in this contract.
Section 16 is a standard contract term.
Section 17: Offer
The Offer Section states that the buyer offers to buy the Property according to the terms of this contract. There is also an expiration date for which the offer will be open for acceptance until. If that time elapses, then the offer becomes null and void. If you as the seller have reached agreement with the buyer and are wanting to accept the offer, ensure the acceptance section is completed prior to this expiration date.
Section 18: Acceptance
As mentioned in the Offer Section above, if you as the seller want to accept the buyer’s offer then the Acceptance Section needs to be filled out prior to the offer expiration in order for the deal to be binding.
There is also another section on Dower under the Acceptance and this would be filled out and signed by the non-owner spouse if Dower Rights are applicable to the sale.
Rejection
The Rejection Section is rarely used in practice as offers are typically either countered or just verbally rejected if an agreement cannot be reached. Of course if you do want to fill this out as the seller, you are welcome to do so.
Conveyancing Information
Conveyancing Information is the last section of the Purchase Agreement. You do not need to have this information up front, especially when in the midst of a negotiation and things are going back and forth between buyer and seller. The Bōde office will reach out for this information if and when you reach agreement. If you have not selected a lawyer, our Prō Marketplace has the best vetted professionals in your local area.
Have more questions? Visit our Resource Centre for instant answers.
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