Simple and Short Contract Crash Course

When you are looking for Calgary homes the best thing you can do for yourself is to gain some knowledge. Now we are not saying you need to know everything about a purchase contract but for anyone who is buying their first Calgary home you should know the basics. This could save you a lot of time and headache down the road.

There are only a few things you really need to know about contracts. We know what you are thinking, shouldn’t my real estate agent know this? Yes but again not all agents are created equal. So it’s good to have some knowledge on your side. Let’s break down the important parts of the contract. There are chattels, terms, conditions and hold-backs. Let’s start with chattels.

Chattels is an item that is NOT the real estate itself. So anything that is not the building or land. The only thing you need to know is that you need to make sure you write in everything you want AND do not want. Write it clearly and legibly. Also getting serial numbers is a good idea. Also if you get consent from the seller, pictures are a great idea.

Let’s talk about terms and conditions together since they are similar. Terms and conditions are written into the contract to to add certain stipulations. Some examples are finance conditions, inspection conditions, a term for removing garbage off the property or even a term to clean the carpets before possession day. The main DIFFERENCE between terms and conditions is this: you cannot stop the deal if a term is not fulfilled. You can sue the seller but you must continue with the purchase. With conditions you can break the deal as long as it is before the condition date. So how can you make sure a term is fulfilled? Easy, write in a hold-back.

A hold-back is something that most agents are terrible at writing. So knowing this section is crucial for you. Let’s create a real world scenario. Say you found that lovely Calgary home and you are writing an offer. But there is a bin of garbage in the back yard. You want to make sure that is gone BEFORE you move in. But you can’t put it in as a condition cause you do not want the seller backing out if they do not do it before the condition day. Here is the perfect time to use a hold-back. To write a hold-back that will stand up in court is easy. For our scenario you would write in the the seller must remove the bin of garbage/rubbish from the property by possession day. You will write that a hold-back of a certain amount (let’s say $500 dollars) will be held with the buyers lawyer. Then you have to write how the monies will be released. How the seller will get the money and how you will. So it would look something like this...

A hold back of $500, five hundred dollars, will be held with the buyers lawyer. The hold back will be released to the seller within 5 business days of possession date if and only if the bin of garbage in the back yard is removed. The hold back will be released to the buyer within 5 business days of possession if the seller does not remove the bin of garbage from the back yard before possession day.

Something like that. Now you can word it yourself as long as you have the amount, dates and how the money will be released. That is it for contracts. A quick look to arm yourself with some knowledge. We hope this shines some light for the next time you write an offer on a Calgary home.