Common Mistakes Buyers Make in Purchase & Sale Agreements
Buying real estate in Ontario is a major financial and legal commitment. While many buyers focus on price and location, serious problems often arise from mistakes made in the Purchase & Sale Agreement (APS) itself.
These mistakes can lead to lost deposits, delayed closings, or legal disputes. Below are the most common errors buyers make, explained briefly with clear links, allowing you to explore each legal area in more detail on our website.
Why the Purchase & Sale Agreement Is So Important
The Purchase & Sale Agreement is a legally binding contract. Once it becomes firm, buyers are expected to close even if circumstances change. Many buyers assume the agreement is just paperwork handled by agents. In reality, it defines your legal obligations, timelines, penalties, and risks.
Signing Without Legal Review
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One of the most common mistakes is signing the APS without having a lawyer review it first. Standard forms still contain clauses that may not protect your interests.
A lawyer reviews:
- Conditions and deadlines
- Deposit terms
- Closing obligations
- Risk exposure
Click here to get more information about working with a real estate lawyer in Ontario:
https://khanllp.com/real-estate-lawyer-ontario
Waiving Conditions Too Early
In competitive markets, buyers often waive conditions to make offers more attractive. This can be risky if financing, inspections, or legal reviews are incomplete.
Once conditions are waived, the agreement usually becomes firm, leaving little room to exit the deal safely.
Assuming Financing Is Guaranteed
Mortgage pre-approval does not always mean final approval. Financing can fall through due to:
- Low appraisal values
- Changes in employment or income
- Lender conditions are not being met
If financing fails after conditions are waived, buyers may still be legally required to close.
Misunderstanding the Deposit
Many buyers believe the deposit is automatically refundable. This is not true.
If a buyer breaches a firm agreement:
- The deposit may be forfeited
- The seller may claim additional damages
- Legal disputes can arise
Understanding deposit risk early is critical.
Underestimating Closing Costs
Beyond the purchase price, buyers must budget for:
- Land Transfer Tax
- Legal fees
- Title insurance
- Adjustments
Failure to prepare adequate funds can delay or prevent closing.
Not Knowing When the Agreement Becomes Firm
Buyers often misunderstand:
- When conditions expire
- What actions waive conditions
- How notices must be delivered
Missing a deadline can accidentally make an agreement firm.
Ignoring Title or Property Restrictions
Issues such as easements, liens, or zoning restrictions can affect how a property is used or resold. These issues are usually discovered through legal searches, not listings.
Overlooking Family Law Implications
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Buying property during separation, divorce, or jointly with family members can create unexpected legal consequences.
The ownership structure, liability, and potential future claims should be reviewed carefully.
Click here to learn more about how family law can affect property ownership:
https://khanllp.com/family-law
Ignoring Immigration or Residency Issues
Immigration status can impact:
- Financing eligibility
- Tax obligations
- Ownership structure
This is especially important for temporary residents, new immigrants, or buyers with cross-border considerations.
Click here to get more information about immigration-related legal services:
https://khanllp.com/immigration
Relying on Verbal Promises
Anything not written into the Purchase & Sale Agreement is generally unenforceable. Verbal promises about repairs, inclusions, or timing may not be legally binding. All terms should be documented clearly in writing.
Why Speaking to a Lawyer Early Matters
Many buyer problems could be avoided with early legal advice. A lawyer helps:
- Review the agreement before signing
- Identify risks before conditions are waived
- Protect deposits
- Prevent disputes
Khan Law LLP assists buyers across Ontario with careful agreement review to help prevent costly mistakes before they happen.
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Can You Cancel a Purchase & Sale Agreement in Ontario?
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