What is an offer to purchase or an agreement of purchase and sale?

An offer to purchase is also commonly referred to as an agreement of purchase and sale.

An offer to purchase (or agreement of purchase and sale) outlines the terms upon which the buyer agrees to purchase the property from the seller. It takes the form of a written legal contract between two parties, being the buyer and the seller. Usually, an offer to purchase is a legal document drafted by a lawyer and witnessed by a third party. That means that the contract is legally binding, and that the purchase is subject to the terms outlined in the offer to purchase.

In addition, it often outlines the price upon which the buyer will buy the property from the seller. An offer to purchase can come in one of two forms. It can be firm, or conditional.

A firm offer contains no conditions. The agreement is straightforward and clear cut. It outlines that the sale will take place and the way in which the sale will proceed. This type of offer does not outline specific conditions that need to be met in order to go ahead with the sale.

A conditional offer is another type of offer to purchase. This type of offer to purchase is subject to specific conditions, outlined within the document itself. Usually, there is an indicated time period within which the conditions outlined in the conditional offer must be completed in order for the purchase to go through. With this type of agreement of purchase and sale, if the conditions are not met, then the buyer may back out of the deal.

The conditions outlined in a conditional offer may include, but are not limited to, financing, or the sale of an existing home and so forth.

For more information on offer to purchases, also known as agreements of purchase and sale, contact Krol & Krol at 905.707.3370.