Real Estate Agreement and Forms Explained

Toronto by Freaktogpraphy
Toronto by Freaktogpraphy

1. Agreement of Purchase and Sale

2. Confirmation of Co-operation and Representation

3. Listing Agreement

4. Buyer Representation Agreement

Agreement of Purchase and Sale

View the form in plain language 

Agreement of Purchase and Sale is a detailed contract outlining the conditions and terms of a financial purchase.

A complex series of carefully planned events unfolds with acute attention to detail before a brokerage lists a property. The listing price is set, the marketing strategy is crafted, repairs and improvements are made, the interior of the house is staged, and the seller prepares psychologically to transfer ownership to someone else.

In sharp contrast, however, the seller is often surprised when the Agreement of Purchase and Sale is handed to them. After all, this agreement of purchase and sale can appear suddenly and unexpectedly. The seller is often introduced to the agreement of purchase and sale when a completed and signed version (delivered by the buyer’s real estate agent - is in front of them. Unfortunately, the seller can be completely unfamiliar with this crucial document even though their property is on the market.

The agreement of purchase and sale establishes an irrevocable period - if the buyer’s offer is not accepted by the seller within the stated timeframe, the offer is null and void and no longer binding on any of the parties. In other words, the clock is ticking – and sometimes the seller doesn’t have a lot of time to decide whether to accept, reject, or send back the offer.

Nonetheless, a great deal is at stake as the property is typically the seller’s most significant investment. By accepting the offer, the seller creates a binding contract between the two parties. As a result, it is imperative that the seller fully understands the fine print before they sign the agreement of purchase and sale.

Confirmation of Co-operation and Representation

View the form in plain language 

Confirmation of Co-operation and Representation or the form 320 is presented to the parties in a real estate transaction before the offer or the agreement of purchase and sale is tabled. The confirmation of co-operation and representation is presented, discussed, and signed by all parties before the offer is addressed.

In a multiple representation situation, it is crucial that all parties involved in the transaction both understand and accept that multiple representation exists. They must also be fully aware of the brokerage’s responsibility to each client.

Listing Agreement

View the form in plain language 

The first formal step in marketing your property is entering into a Listing Agreement – a contract that commits Jamie as your real estate professional to actively market your home on your behalf, and list it on the MLS, for a specified period of time. It also commits you to paying commission, in the form of a percentage of the sale price of your home, upon the successful closing of the sale. The document will specify the exact amount of the compensation authorized to be offered to other brokers acting as agents for the buyer(s) of your home, when their services enter into the transaction.

The Listing Agreement sets out your property address, asking price and conditions of the arrangement between you and your Realtor®, as well as the length of time the agreement is valid for. Once the agreement has been signed, and as of a mutually agreed upon date, Jamie will be authorized to move forward with showcasing your home on the Toronto Multiple Listings Service system and moving forward with the rest of the advertising plan. Let the active marketing begin!

Buyer Representation Agreement

View the form in plain language 

Buyer Representation Agreement defines the brokerage’s responsibilities along with how the brokerage will be paid for its services.

Our brokerage enters into a buyer representation agreement with the buyer only when they are ready to place an offer on a property. Some brokerages require the buyer to enter into a buyer representation agreement before they even begin a property search.

Our brokerage works with the buyer in good faith until they’re ready to table an offer. The process ultimately calls for us to enter into a buyer representation agreement with the buyer.

The buyer is not responsible for direct commission costs when they enter into a buyer representation agreement with our brokerage. As well, if our brokerage doesn’t find a suitable property for the buyer then commission is not paid. If the buyer puts in a successful offer the commission is paid by the seller.

One thought on “Real Estate Agreement and Forms Explained

August 28, 2016 at 11:15 pm
Bruno Sinosic says:

After signing form 320 , may a buyer – legally – withdraw hi/ her offer ? Hasn’ he / she just signed a legal contract ? zThank you .

Reply

Leave a Reply

Your email address will not be published.