Understanding the Timeline and Next Steps After Signing a Sales and Purchase Contract in British Columbia
One of the major steps in the buying process is signing a Sales and Purchase Contract. Understanding the timeline and key steps ahead, in accordance with BC real estate rules and bylaws, can help both buyers and sellers navigate the process smoothly.
Offer Presentation and Negotiation
Before a contract is signed, there is a critical negotiation process where the buyer submits an offer, and the seller can accept, reject, or counter it. In British Columbia, this stage follows the Real Estate Services Act (RESA) and other local regulations. The process involves:
- Reviewing the initial offer, including price, contingencies, and closing timeline.
- Seller responding with a counteroffer if terms are not agreeable.
- Buyer and seller negotiating terms such as price adjustments, closing costs, and contingencies.
- Disclosure of material latent defects and making sure all the require documents are being released to you based on the clauses and subjects are being presented.
- Agreement reached through a final counteroffer, leading to the contract being signed.
Contract Acceptance and Deposit Handling
Once both parties sign the contract, the buyer typically submits an earnest money deposit that is around 5%, which must be held in a trust account by a real estate brokerage or a lawyer. The contract becomes legally binding, and the agreed-upon timeline begins.
Home Inspection Period
Most contracts would have a home inspection contingency, allowing the buyer to schedule a professional home inspection within a specified timeframe.The inspection report may reveal issues that require repairs or negotiations. The buyer can:
- Accept the property as-is.
- Request repairs or provide a monetary compensation.
- Choose to walk away if the issues are too significant (if the contract allows).
Financing and Appraisal
If the buyer is financing the purchase, their lender will order an appraisal to determine the home’s market value. Under Canadian lending guidelines, mortgage approval depends on the appraisal supporting the agreed purchase price. If the appraisal comes in lower than expected, renegotiations may be necessary or the buyer would have to walk away and not be able to remove subjects. Financing usually takes around 7-10 days time for confirmation.
Title Search and Property Disclosure
The buyer’s lawyer or notary conducts a title search through the BC Land Title and Survey Authority to ensure there are no liens, encumbrances, or legal claims against the property. Title insurance may also be obtained to protect against future disputes.
Subject Removal and Finalizing Conditions
The conditions (also known as subjects) such as financing approval, home inspection results, and any agreed-upon repairs must be satisfied before the deal becomes firm. The buyer must provide written notice of subject removal within the specified timeline; otherwise, the contract may be voided.
Final Walkthrough
A few days before closing, the buyer typically conducts a final walkthrough to ensure the home is in the expected condition and that agreed-upon repairs have been completed. This ensures compliance with the terms of the contract.
Closing Process and Property Transfer
At closing, the buyer and seller sign the final paperwork with a lawyer or notary a few days before the actually completion date. The buyer transfers the remaining funds, and the property title is officially transferred and registered with the BC Land Title Office. Once all documents are recorded, the buyer receives the keys, and the sale is complete.
