This form is also popularly known as the OFFER form. Here is one definition that I have come across:
The Agreement of Purchase and Sale is a written contract that allows real property and title to pass from seller to buyer once an agreed upon price is paid and other contract terms are mutually satisfied.
When a Buyer finds a property that he/she is interested in and would like to bid for it an OFFER is usually prepared by the Buyer's agent. This offer formalizes to the Seller the Buyer's interest in purchasing the property. We cannot rely on verbal offers.
The offer has to be thoroughly discussed with the Buyer. This ensures that the Buyer is familiar with all the terms and conditions of his offer. The Buyer's agent also wants to make sure that whatever is on the offer is what the Buyer wants and understands. Enough time must be alloted to discussing the offer. It will be wise to discuss it even before the Buyer is actually thinking of making an offer. You might get into a situation where a decision has to be made very quickly and the process of going through the offer thoroughly might be compromised due to lack of time.
It is a very important document. A good agent should be willing and able to discuss this form with his Buyer and/or Seller thoroughly. A good client should also be willing to listen and understand from his agent. It is a legal document, a contract.