Purchase and Sale Agreement Dec 23, 2025 3 min read

Common Mistakes Buyers Make in Purchase & Sale Agreements

Buying real estate in Ontario is a major financial and legal commitment. While many buyers focus on price and location, serious problems often arise from mistakes made in the Purchase & Sale Agreement (APS) itself.

These mistakes can lead to lost deposits, delayed closings, or legal disputes. Below are the most common errors buyers make, explained briefly with clear links, allowing you to explore each legal area in more detail on our website.

Why the Purchase & Sale Agreement Is So Important

The Purchase & Sale Agreement is a legally binding contract. Once it becomes firm, buyers are expected to close even if circumstances change. Many buyers assume the agreement is just paperwork handled by agents. In reality, it defines your legal obligations, timelines, penalties, and risks.

Signing Without Legal Review

One of the most common mistakes is signing the APS without having a lawyer review it first. Standard forms still contain clauses that may not protect your interests.

A lawyer reviews:

Conditions and deadlines
Deposit terms
Closing obligations
Risk exposure

Learn more about working with a real estate lawyer in Ontario

Waiving Conditions Too Early

In competitive markets, buyers often waive conditions to make offers more attractive. This can be risky if financing, inspections, or legal reviews are incomplete.

Once conditions are waived, the agreement usually becomes firm, leaving little room to exit the deal safely.

Assuming Financing Is Guaranteed

Mortgage pre-approval does not always mean final approval. Financing can fall through due to:

Low appraisal values
Changes in employment or income
Lender conditions are not being met

If financing fails after conditions are waived, buyers may still be legally required to close.

Misunderstanding the Deposit

Many buyers believe the deposit is automatically refundable. This is not true.

If a buyer breaches a firm agreement:

The deposit may be forfeited
The seller may claim additional damages
Legal disputes can arise

Understanding deposit risk early is critical.

Underestimating Closing Costs

Beyond the purchase price, buyers must budget for:

Land Transfer Tax
Legal fees
Title insurance
Adjustments

Failure to prepare adequate funds can delay or prevent closing.

Not Knowing When the Agreement Becomes Firm

Buyers often misunderstand:

When conditions expire
What actions waive conditions
How notices must be delivered

Missing a deadline can accidentally make an agreement firm.

Ignoring Title or Property Restrictions

Issues such as easements, liens, or zoning restrictions can affect how a property is used or resold. These issues are usually discovered through legal searches, not listings.

Overlooking Family Law Implications

Buying property during separation, divorce, or jointly with family members can create unexpected legal consequences.

The ownership structure, liability, and potential future claims should be reviewed carefully.

Click here to learn more about how family law can affect property ownership:
Family Law.

Ignoring Immigration or Residency Issues

Immigration status can affect:

Financing eligibility
Tax obligations
Ownership structure

This is especially important for temporary residents, new immigrants, or buyers with cross-border considerations.

Click here to learn more about immigration legal services.

Relying on Verbal Promises

Anything not written into the Purchase & Sale Agreement is generally unenforceable. Verbal promises about repairs, inclusions, or timing may not be legally binding. All terms should be documented clearly in writing.