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An Agreement of Purchase and Sale (APS) is the legally binding contract between a buyer and seller that sets out the purchase price, deposit, closing date, and any conditions — such as financing or inspection — that must be satisfied before the deal becomes firm.
Once signed by both parties, the APS becomes the roadmap for the entire transaction: the deposit amount and who holds it, the closing (completion) date, what's included or excluded in the sale, and any conditions the buyer needs satisfied — most commonly financing and a home inspection, and for a condo, a review period tied to the status certificate. Each condition carries its own deadline for subject removal or waiver.
The financing condition is where a mortgage broker or agent gets directly involved: the wording and deadline in the APS drive how quickly a pre-approval needs to convert into a firm commitment letter. If financing can't be arranged in time and the condition isn't met or extended, the buyer can typically walk away from the deal and recover their deposit.
Standard forms, provincial variation: most provinces use a standardized or association-drafted APS form (for example, OREA's form in Ontario), but the specific clauses, deposit customs, and closing timelines vary by province and local board.
Deposit isn't the down payment: the deposit paid on signing is credited toward the purchase at closing but is a separate, earlier payment from the borrower's down payment calculation.
Financing condition drives the file's timeline: brokers work backward from the APS's financing-condition deadline to make sure a conditional approval is in hand before the client is asked to remove conditions.
Firm and conditional offers differ: a firm (unconditional) APS gives the buyer no financing out, which is why brokers caution clients against waiving a financing condition without a lender commitment already in place.
Definitions reflect Canadian federal and provincial rules as of the “Updated” date above. Not advice for any specific file.
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