SIGNING REAL ESTATE DEALS REQUIRE CAREFUL ATTENTION

Buyers and sellers must be aware of many technical issues and requirements when signing real estate agreements.

Under the Ontario Statute of Frauds, real estate agreements are only valid if they are in writing and signed by the parties. A handshake agreement to sell your property will not be enforceable.

The standard resale agreement provides a spot for the buyer and seller to sign, as well as a witness. What happens if the witness does not sign? Can the seller or buyer cancel the agreement?

There is no requirement in the Statute of Frauds for a witness to sign beside the signature of the buyer or the seller. The main reason for the witness is to prevent either of the parties from later denying that it was their signature, to try and cancel the deal. But if the witness saw the party sign, he could also give evidence later as to what he saw, so the contract would still be enforceable, even if no witness signed.

Nevertheless, because of the increase in mortgage fraud that has occurred over the years, many lending institutions now require that all real estate agreements be witnessed in writing or else they will not advance the mortgage loan. As a result, buyers and sellers are cautioned to always have a witness available. This can become problematic when agreements are signed by fax late at night and witnesses may not be available.

If two spouses are signing, can they witness each other’s signature? While technically they can, this may also offend a lender’s policy and so care should be taken to have an independent third party available, over 18 years of age, to witness the signature.

Can someone witness a signature if you fax the document to them after you sign it? No. The witness must be physically present to see you sign in order to sign as a witness.

How is an offer or acceptance communicated? Under most standard agreements, the offer must be delivered or faxed to the other party to prove communication. Therefore, if an offer is delivered to the seller and it is open for acceptance until 11 p.m., not only must the seller accept the offer before 11 p.m., but the accepted offer must be delivered or faxed to the buyer before 11 p.m.

Can you communicate offers and acceptances via email? Most agreement of purchase and sale forms in use today do not provide for communication via email. One reason is that you may send the email today, only to be notified tomorrow that there was a server error and the email was not delivered. Or perhaps you referred to the agreement as an attachment to your email but then forgot to include the attachment.

In order to avoid problems, a clause should be inserted into your agreement to permit communication by electronic system such as email. In addition, when you send the email, always ask for a reply communication from the other party to confirm that they have received the email. Then print the reply and keep it for your records.

The real estate agreement of purchase and sale is a serious contract, and may be the largest financial investment that you might ever make. Make sure that besides having it properly witnessed, that every clause is properly explained to you before you sign. This is what a professional real estate salesperson or lawyer will do when they prepare and witness your signature.

SOURCE: YOURHOME.CA

Jackie Dall'Orso

Jackie Dall'Orso

Sales Representative
CENTURY 21 Miller Real Estate Ltd., Brokerage*
Contact Me

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