Real Estate Purchase Agreement Review: The Clauses That Matter

Conditions and Contingencies: The Only Exits in the Contract

Canadian agreements call them conditions; US agreements call them contingencies — either way, they are the only lawful exits once the contract is signed. A financing condition releases the buyer if a mortgage commitment cannot be obtained; an inspection condition permits withdrawal or renegotiation after defects surface; condo status or HOA review conditions protect against special assessments and litigation; US contracts commonly add an appraisal contingency for value shortfalls. What separates a good condition from a bad one is drafting: a clean condition states its deadline, who must act, how satisfaction or waiver is communicated, and what happens if the deadline passes silently — some forms make the deal automatically dead, others automatically firm.

Buyers should also understand the 'reasonable efforts' trap: many conditions require the buyer to genuinely try to satisfy them. A buyer who gets cold feet and simply declines to apply for financing may be found in breach despite the condition. Conditions are shields against outcomes you cannot control, not free options to walk away.

Deposits, Defaults, and Remedies: Reading the Risk Allocation

The deposit clause allocates the first layer of risk. It should name a neutral holder — brokerage trust account, lawyer's trust account, or licensed escrow — and tie refundability clearly to each condition. The remedies architecture differs by country: in Canada, a defaulting buyer's deposit is generally forfeited without the seller proving loss, and the seller can still sue for further damages. Many US contracts instead contain liquidated-damages clauses making the earnest money the seller's sole remedy — a cap that fundamentally changes the buyer's downside. Sellers' defaults mirror this: buyers can typically recover the deposit, claim damages, or in appropriate cases seek specific performance — a court order forcing the sale — since real estate is treated as unique.

Closing dates carry their own teeth. Standard forms almost universally state that time is of the essence, meaning a missed closing date is a breach rather than a scheduling hiccup. Any extension requires mutual written agreement, which the non-delaying party can refuse or price.

Fixtures, Representations, and the Fine Print That Survives Closing

Fixtures — items attached to the property — transfer with it by default; chattels — freestanding items — do not. The gray zone (mounted televisions, appliances, custom window coverings, hot tubs, EV chargers) generates more closing-day disputes than any other clause, and the fix is simple: name every contested item as included or excluded in the agreement itself. Equally important are the seller's representations and warranties: promises about permits, work orders, environmental conditions, or equipment being owned rather than rented (a chronic issue with hot water tanks and furnaces in parts of Canada). Under most standard forms, representations expire at closing unless the contract states they survive — so survival language is what turns a comforting sentence into an enforceable promise.

Finally, the entire-agreement clause: nearly every form states the written contract is the whole deal, extinguishing verbal promises made during showings and negotiations. If the seller promised to fix the fence or leave the riding mower, it exists legally only once it is written into the agreement or an amendment signed by both parties. This tool triages these clause families; a real estate lawyer reading your actual document — ideally before signature, when everything remains negotiable — is the step that converts triage into protection.

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