When drafting an Agreement of Purchase and Sale in London, Ontario, you must include essential conditions such as financing approval, a professional home inspection, and a clear list of chattels and fixtures. Working with a local real estate lawyer ensures your deposit is protected and the closing date is legally sound.
Buying a home is likely the largest financial transaction you will ever make. The document that governs this entire process is the Agreement of Purchase and Sale (APS). In Ontario, most real estate agents use standardized forms created by the Ontario Real Estate Association (OREA), but the specific schedules and conditions attached to it are entirely up to you and your agent. Whether you are eyeing a heritage home in Old South London or a modern build in the Hyde Park neighbourhood, signing a poorly drafted APS can lead to massive financial losses or force you to buy a house with hidden defects.
As the market continues to evolve into April 2026, buyers must be more diligent than ever. An APS is a legally binding contract the moment both the buyer and the seller sign it. 📝 You cannot simply walk away because you changed your mind. To protect yourself, it is highly recommended that you include specific protective clauses, commonly referred to as conditions, before you finalize the deal.
Step-by-Step Process in London, Ontario
A well-structured offer protects your deposit and guarantees you get exactly what you are paying for. Most real estate transactions in Middlesex County follow these essential drafting steps.
Step 1: The Financing Condition
Even if you have a mortgage pre-approval from your bank, you must include a financing condition. Pre-approvals are not guaranteed; the lender still needs to appraise the specific house you are buying. If the bank decides the London property is overpriced and refuses to finance the full amount, a financing condition allows you to walk away from the deal with your deposit intact.
Step 2: The Home Inspection Condition
Never skip the home inspection, even on newer builds. A home inspection condition gives you a specific number of days to hire a professional inspector to evaluate the property. 🔍 If they uncover severe foundational issues, outdated knob-and-tube wiring, or a leaking roof, this clause generally allows you to negotiate a lower price, demand repairs, or cancel the contract entirely.
Step 3: Defining Chattels and Fixtures
Disputes often arise on closing day over what stays in the house and what the seller takes with them. Fixtures are items permanently attached to the property (like built-in shelving or a furnace), while chattels are movable items (like a refrigerator or washing machine). Your APS must explicitly list every appliance, window covering, and light fixture you expect to be left behind to avoid confusion.
Step 4: Setting the Irrevocability and Closing Dates
Your offer must have an ‘irrevocable’ time limit, meaning the exact date and hour the seller must accept it before the offer simply expires. Additionally, you must select a closing date (completion date). This is the day the title is legally transferred to your name and you receive the keys. Your law firm will coordinate this date with the seller’s lawyer and the Land Registry Office.
How Much Does it Cost in London?
Drafting the APS itself is usually handled by your real estate agent at no upfront cost, but closing the deal involves several financial commitments:
- The Deposit: Typically 5% of the purchase price, provided via bank draft or certified cheque within 24 hours of an accepted offer.
- Home Inspection: A professional inspector in London generally charges between $400 and $600 CAD.
- Legal Fees: A real estate law firm will typically charge between $1,500 and $2,500 CAD to execute the title search, handle the mortgage funds, and finalize the closing.
- Land Transfer Tax: In Ontario, buyers must pay a provincial Land Transfer Tax upon closing, which varies based on the purchase price.
How Long Does the Process Take?
Negotiating the Agreement of Purchase and Sale usually takes 24 to 48 hours of back-and-forth counter-offers. Once accepted, the conditional period (time to get your financing and inspection sorted) typically lasts 5 to 10 business days. 📅 After conditions are fulfilled and waived, the waiting period until the official closing date generally ranges from 30 to 90 days, depending on what was agreed upon.
Frequently Asked Questions (FAQ)
Can a seller back out of an accepted APS?
Generally, no. Once an Agreement of Purchase and Sale is firmly accepted (all conditions are waived), the seller is legally bound to complete the transaction. If they refuse to close, the buyer can sue them for breach of contract or force the sale through a court order known as specific performance.
What is Schedule A?
Schedule A is a crucial attachment to the standard OREA form. It contains the customized legal clauses drafted by your real estate agent or lawyer, detailing the specific conditions like financing, inspections, and the exact terms regarding the deposit.
What happens to my deposit if I use a condition to cancel?
If you cancel the APS in good faith within the conditional period (for example, your financing fell through), the seller must sign a mutual release form. Your deposit is then returned to you in full, without any penalty.
Do I need a lawyer before signing the offer?
While real estate agents typically draft the APS, it is highly advisable to have a local London law firm review the document before you sign, especially if you are buying a rural property, a condominium, or a house with complex easements.
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