Purchase Agreement
Learn what a purchase agreement is in Canadian real estate, what terms it includes, and why it’s crucial for protecting buyers and sellers.
May 14, 2025
What is Purchase Agreement?
A purchase agreement, formally known as an Agreement of Purchase and Sale (APS), is a legally binding contract that outlines the terms of a real estate transaction between a buyer and seller.
Why do Purchase Agreements Matter in Real Estate?
In Canadian real estate, the purchase agreement is the core document governing a transaction. It details rights, responsibilities, and legal obligations for both parties, covering key terms like:- Purchase price
- Closing date
- Deposits and payment schedule
- Conditions (financing, inspection, sale of buyer’s home)
- Included chattels and excluded fixtures
Once signed by both parties, the agreement is binding and enforceable under provincial law. Any changes must be made in writing and agreed to by both parties.
Understanding the purchase agreement ensures all aspects of the sale are clearly defined, minimizing disputes and guiding the transaction to a successful closing.
Example of a Purchase Agreement in Action
A buyer and seller sign a purchase agreement with a 60-day closing, $25,000 deposit, and conditions for inspection and financing.
Key Takeaways
- Legal contract governing the property sale.
- Defines all key terms and timelines.
- Becomes binding once signed.
- Modifications require written consent.
- Reviewed by agents and legal professionals.
Related Terms
- Agreement of Purchase and Sale
- Firm Offer
- Conditional Offer
- Deposit
- Closing Date
An overview of Hedge Road Landing. (Alliance Homes)
6525 Mississauga Road and its surrounding context. (RBC Capital Markets & CBRE)
Property details for 6525 Mississauga Road. (RBC Capital Markets & CBRE)
National average resale-price growth and housing-starts growth, smoothed over three months. The comparison illustrates the cycle; it does not establish how much a price change causes construction to change.
Trailing 12-month starts in centres of 50,000 or more remove the usual monthly seasonality. Ownership combines the homeowner and condominium categories; rental is shown separately.
Six-month averages of provincial starts, expressed at annual rates. The smoothing reduces the influence of individual apartment projects.
The same August benchmark compared with two different starting points. Three-month changes are not annualized.
Average sale prices show the difference in purchase costs across markets. They do not measure affordability relative to local incomes or construction costs.
Newfoundland and Labrador remains above its pre-pandemic sales pattern, but August activity was below last year. Historical lines retain their original release vintages.
Galleria III at Galleria on the Park (Hariri Pontarini Architects) 
Bisha Hotel & Residences (Lifetime Developments)
