Offices in Ottawa and Perth
(613) 722-1500

CONTACT US (613) 722-1500

D.I.Y. Agreements of Purchase and Sale: Considerations

D.I.Y. Agreements of Purchase and Sale: Considerations


Posted August 30, 2022

There has been much discussion on the changes in the real estate market, particularly on affordability. To save costs, many prospective buyers and sellers may consider working together to draft an agreement. This approach may arise for recreational properties, vacant land and homes that are being transferred amongst family and friends as a few examples. The mutual understanding may be that “Doing-it-Yourself” keeps the transaction “simple”.

But what happens if you sign an agreement not fully understanding your obligations in the “deal”? Perhaps someone may sign a “homemade” agreement, with no conditions assuming that it “will be sorted out” on closing.

A lack of advice and review by a lawyer prior to signing may completely change the result of what both parties expected and ultimately what they wanted the outcome to be possibly increasing cost and frustration. While it is possible to draft your own agreement, asking a lawyer for help can yield great results to ensure you are protected from costly oversights. Here are some considerations you may want to review with a lawyer prior to signing:

Financing Condition

If a buyer intends to use a lender to finance any part of the transaction, it is critical that they let their lender know as soon as possible. Depending on your financial situation, you may be considering a mortgage or bridge loan. The lender may have certain requirements that must be met prior to any funds being advanced. A lawyer can assist in the wording of the particular condition in the event you have issues in arranging for financing.


Depending on the type of property and intended use, a buyer should consider whether their prospective purchase will qualify for fire insurance at a reasonable cost. When a lender is involved, fire insurance will need to be in place protecting their security in the event of a loss, ex: a fire. Understanding what an insurance provider wants to know in terms an insurable risk is something to be considered prior to signing any agreement.

Title Insurance

When a lender is involved, a title insurance policy protecting their interest will typically need to be purchased by the buyer. A lawyer will explain more information about the policy and whether an owner policy should be obtained as well. Sometimes a title insurance provider may require additional information about the parties involved, especially in private transactions. Inserting a condition about title insurability may prevent confusion and delay. Purchasing title insurance should be considered with a lawyer.

Purchase Price

Private real estate transactions may involve subjective assessments of what is a “fair” purchase price. While parties can agree on their own value, it is important to consider whether the purchase price is significantly lower than what would be obtained “on the market” especially when considering applicable taxation. It is also important to consider whether a lender will approve a higher mortgage amount when the purchase price exceeds what the fair market value of the property is.

Inspections and Reports

Depending on the property, including a condition on an inspection and/or a specific report, such as zoning compliance and for permits where applicable may protect a buyer from learning about a problem after the deal closes.

In short, a real estate transaction can be a challenging process. Careful planning at the beginning stages can make all the difference to ensure a “smooth” closing without surprises, especially if a lawyer is involved early on in the process to capture the key details of the transaction.

This blog post was written by Brandon Doughty, a member of the Real Estate and Wills and Estates teams.  He can be reached at 613-369-0364 or at

More Resources

Blog |
Employment, Labour, and Human Rights, Commercial Litigation


Posted May 23, 2023

Both in my commercial and employment litigation practice, I encounter Ontario business owners faced with serious charges laid against them under the Provincial Offences Act[...]
Blog |
Family Law


Posted May 18, 2023

The recent Supreme Court of Canada decision in Anderson v. Anderson, 2023 SCC 13, provides guidance on domestic contracts and the enforceability of an informal[...]
Blog |
Environmental Law


Posted May 16, 2023

When many people think of contaminated sites, they think of the usual suspects such as industrial properties and gas stations.  They may not think of[...]
Blog |
Business Law


Posted May 9, 2023

Often business owners reach a point where they are considering the sale of their business either through the sale of shares or the sale of[...]
Blog |
Family Law


Posted May 2, 2023

Overview of Tort Claims in Family Matters Tort claims can be made in family law matters, so as to prevent a multiplicity of proceedings and[...]
Blog |
Employment, Labour, and Human Rights


Posted April 25, 2023

In a case that recently was decided from the Court of Appeal of Ontario called Celestini v Shoplogix Inc., 2023 ONCA 131, the Court had[...]

Subscribe to Our Newsletter

"*" indicates required fields

This field is for validation purposes and should be left unchanged.