The Contract of Purchase and Sale (CPS) is a critical document in any real estate transaction in BC, detailing the terms of a buyer's offer to a seller. Here’s a quick overview of its key components
Key Elements of the CPS
- Purchase Price: The buyer’s offer amount, which may be countered until both parties agree.
- Deposit: A “good faith” payment, usually 5% of the purchase price, due within 24 hours of subject removal (unless otherwise stated).
- Terms & Conditions: Includes buyer's subjects such as financing, inspection, title review, or strata documents, which must be fulfilled before finalizing the deal.
- Completion Date: The day ownership is officially transferred at the Land Title Office.
- Possession Date: The date the buyer gains access to the property. Specify time and whether the property will be vacant or tenant-occupied.
- Adjustment Date: The date the buyer takes responsibility for property taxes, utilities, and fees (usually the same as the possession date).
- Included Items: Clearly list items included in the purchase, such as appliances, window coverings, and keys.
- Agency Disclosure: Identifies your real estate agent and confirms representation. If unrepresented or dual agency applies, risks must be disclosed.
- Offer Expiry: Sets the date and time your offer expires if not accepted.
Buyer’s Rescission Period (Cooling-Off Period)
Effective January 3, 2023, BC introduced the Home Buyer Rescission Period (HBRP), allowing buyers of residential properties to back out of a contract within 3 business days after acceptance. This applies regardless of subjects in the contract and provides a safeguard for buyers in high-pressure markets.- Rescission Fee: If a buyer cancels the contract during this period, they must pay 0.25% of the purchase price to the seller. For example, on a $1,000,000 home, the fee would be $2,500.
- Purpose: This measure ensures buyers have time to reconsider their decision and seek professional advice if needed.