You would actually think that this would be relatively straightforward, but, it isn’t.
The first line in the Agreement of Purchase and Sale is as follows:
“This Agreement of Purchase and Sale dated this ………………….. day of ………………………………………………………………………………………. 20…………”
Traditionally, in Ontario, it gets named upfront and it’s nothing more than a simple Offer.
Once it is “accepted, we now have a “deal” between the parties. What will we call it? What name will we give it?
You might think that we could give it a name which was coincident with the date the deal was done. That’s quite sensible and follows logic. Significant contracts between large commercial parties are often given an actual name. If not, then they go by the date the deal was struck between them.
However, that’s not how we do business in real estate. It’s the time that the real estate agent first pulled out their computer to start thinking about it. Now, you have to admit, that’s awfully peculiar.
Timeline: Various Steps in the Process
- Buyer visits property
- Buyer decides to place Offer
- Buyer’s agent receives instructions
- Buyer’s agent agrees to draft up Offer
- Buyer’s agent contemplates appropriate clauses and the Offer price
- Buyer’s agent pulls out computer and enters new file
- Buyer’s agent drafts up Offer and inserts DATE
- Buyer’s agent prints up Offer
- Buyer’s agent meets with Buyer
- Buyer’s agent arranges for Buyer to sign the Offer
- Buyer’s agent submits Offer to Seller’s agent
- Seller’s agent contact Seller
- Seller’s agent meets with Seller
- Seller decides to submit counter Offer, increased price, shorter closing
- Seller’s agent make appropriate changes
- Seller signs counter Offer
- Seller’s agent sends counter Offer to Buyer’s agent
- Buyer’s agent meets with Buyer
- Buyer agrees to new terms
- Buyer initials the changes
- Buyer’s agent calls Seller’s agent to advise that Buyer has signed
- Buyer’s agent sends letter (document), fax or email confirming acceptance
- Buyer’s agent requests Buyer to sign Confirmation of Acceptance (COA)
- Buyer signs COA
- Buyer’s agent requests Buyer to sign Acknowledgement of receipt
- Buyer signs Acknowledgement of receipt
- Buyer’s agent forwards copy to Seller’s agent
- Seller’s agent requests Seller to sign Acknowledgement of receipt
- Seller signs Acknowledgement of receipt
- Seller’s agent forwards a copy to Buyer’s agent
Those were the usual steps in a simple transaction. Now, let’s throw in some dates:
- January 15: Buyer visits property
- February 4: Buyer decides to place Offer
- Buyer’s agent receives instructions
- Buyer’s agent agrees to draft up Offer
- Buyer’s agent contemplates appropriate clauses and the Offer price
- Buyer’s agent pulls out computer and enters new file
- February 10: Buyer’s agent drafts up Offer and inserts DATE
- Buyer’s agent prints up Offer
- Buyer’s agent meets with Buyer
- February 28: Buyer’s agent arranges for Buyer to sign the Offer
- February 28: Buyer’s agent submits Offer to Seller’s agent
- Seller’s agent contacts Seller
- Seller’s agent meets with Seller
- April 4: Seller decides to submit counter Offer, increased price, shorter closing
- Seller’s agent make appropriate changes
- April 8: Seller signs counter Offer
- April 8: Seller’s agent sends counter Offer to Buyer’s agent
- Buyer’s agent meets with Buyer
- Buyer agrees to new terms
- April 10: Buyer initials the changes
- Buyer’s agent calls Seller’s agent to advise that Buyer has signed
- April 10: Buyer’s agent sends letter (document), fax or email confirming acceptance
- April 11: Buyer’s agent requests Buyer to sign Confirmation of Acceptance (COA)
- April 11: Buyer signs COA
- Buyer’s agent requests Buyer to sign Acknowledgement of receipt
- Buyer signs Acknowledgement of receipt
- April 11: Buyer’s agent forwards copy to Seller’s agent
- Seller’s agent requests Seller to sign Acknowledgement of receipt
- May 7: Seller signs Acknowledgement of receipt
- May 8: Seller’s agent forwards a copy to Buyer’s agent
Naming the Agreement
From 15 January to 28 February, we simply had discussions and thoughts about the property between the Buyer and the Buyer’s agent. We can’t even refer to an Offer at this point.
From 28 February onwards, we have an Offer. The Buyer’s agent can refer to it. It’s no longer a phantom Offer.
The Buyer’s Offer is submitted and rejected.
Then, we have the Seller’s counter Offer in play from 8 April to 10 April, when we finally have acceptance.
Ultimately, all the paperwork is finished on 8 May.
The Most Popular Answer
It’s quite clear, most people would say that we will call the “agreement between the parties: “The Agreement of Purchase and Sale 10 April”.
That may be true, and that may be the case with many other contracts, but, that’s not what we do in real estate in Ontario.
We will call it: “The Agreement of Purchase and Sale 10 February”.
Why? Simple answer here: Why Not!
With all the options available to us, the most important date between the two parties is the date that the Buyer’s agent pulled out their computer and placed a date on the page.
Why not simply leave that description blank, and let the person who finally “accepted the Offer” to insert the date?
From 10 February onward, all we had at best was what TRESA, 2002, would describe as a “phantom offer”. It doesn’t even exist until it’s signed. That was 28 February. We didn’t have a deal until 10 April.
I am now thinking that that’s way too complex and difficult. Let’s just go with 10 February! Who cares when they had an “agreement”? Pulling out the computer is really what matters and who cares if it was a phantom Offer at that time!
Brian Madigan LL. B., Broker