Is an Agreement of Purchase and Sale legally binding?

Yes. Once both the buyer and seller sign, the APS is a binding contract. Either party can be held to its terms, subject to any conditions written into the agreement.

Can I back out after signing an APS?

Only if a condition lets you. If your offer includes a financing or inspection condition that is not met, you can usually walk away. Once conditions are waived, the agreement is firm.

What is the difference between an offer and an APS?

An offer is your proposed APS before acceptance. Once the seller accepts and both parties sign, that same document becomes the binding Agreement of Purchase and Sale.

Mortgage Glossary

What is Agreement of Purchase and Sale (APS)?

An Agreement of Purchase and Sale (APS) is the binding legal contract that sets out the terms under which a buyer agrees to purchase, and a seller agrees to sell, a property. It covers the price, deposit, closing date, included items, and any conditions. Once both parties sign, it governs the entire transaction through to closing.

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Quick answer

Also known as: APS, purchase agreement, purchase and sale agreement

Key points

The APS is the binding contract that governs a property purchase.
It records price, deposit, closing date, included items, and conditions.
It becomes legally binding once both buyer and seller sign.
Conditions and their deadlines determine when the deal firms up.
Lawyers and lenders work from the APS terms through to closing.

Agreement of Purchase and Sale (APS) explained

The Agreement of Purchase and Sale is the central document in a Canadian real estate deal. It records the purchase price, the deposit, the closing or possession date, the fixtures and chattels included or excluded, and any conditions such as financing or a home inspection. It also states deadlines for satisfying those conditions.

When the buyer's offer is accepted and both sides have signed, the APS becomes a legally binding contract. From that point, lawyers, lenders, and other parties work from its terms: the lender funds against the agreed price, the buyer arranges the deposit and financing, and conditions must be met or waived by their deadlines for the deal to firm up and close.

What a Agreement of Purchase and Sale (APS) is for

The APS exists to put every key term of a property sale in writing so both parties are protected and clear on their obligations. It prevents disputes by fixing the price, what is included, when title transfers, and what conditions must be satisfied before the sale becomes final.

How it can help you

A well-drafted APS protects the buyer with conditions, such as financing or inspection, that let them walk away if something falls through, and it gives the seller certainty of a committed buyer and deposit. Because the agreed price drives your mortgage, it pays to have financing lined up. Lenderoo shops 40+ lenders for free so your numbers are solid before you sign.

When it comes up

The APS comes up the moment you make an offer on a home. Your agent prepares it with your price, deposit, desired closing date, and any conditions, and presents it to the seller. Negotiation may go back and forth until both sides sign, at which point the agreement governs the rest of the purchase.

Example: Key APS terms

Suppose you offer $600,000 on a house with a $30,000 deposit, a closing date 60 days out, and conditions for financing and a home inspection. These terms are written into the Agreement of Purchase and Sale.

Once the seller accepts and both parties sign, you have a binding contract. You then arrange your mortgage and inspection within the stated deadlines. If both conditions are satisfied, you waive them and the deal becomes firm, heading toward the agreed closing date.