Offers to Purchase and Service Agreements
These are the working documents of the transaction. The exam tests form discipline, timing, and the difference between the seller’s side and the buyer’s side of the same piece of paper.
The service agreement comes first
Before providing services, the brokerage signs a written agreement with the client: an exclusive seller brokerage (listing) contract, or a buyer service agreement. It must name the parties, describe the property or service, state the term and expiry, set compensation and how it is earned, disclose the agency relationship, and set out cancellation. Watch the holdover clause, which keeps commission payable if the buyer later buys the property after the agreement expires. Never leave the expiry date blank.
The offer to purchase
Key fields: parties; legal description and municipal address; price; deposit and who holds it; included and excluded chattels; conditions with dates; the irrevocability deadline, date and time; completion day; possession date and time; and the adjustment date. Present every offer promptly and in writing, and explain the irrevocability the client is granting.
Multiple offers
With the seller client’s written instruction, the seller’s brokerage may tell competing buyers that other offers exist. It must not disclose the terms of a competing offer without the seller’s written authorization, and it must treat all buyers alike. Advise buyers to make their best offer.
Worked example
A seller signs a counter-offer at 8:00 p.m. The listing salesperson texts a photo to the buyer’s agent at 11:00 p.m. The buyer’s agent leaves “we accept” on voicemail the next morning, after the 9:00 p.m. irrevocability expired. There is no contract. The seller may sell elsewhere; anything further must be a fresh written offer.
Traps
- A deposit paid to a salesperson rather than held by the brokerage.
- Confusing completion and possession dates.
- Omitting a Homesteads Act spousal consent condition where title is in one name.
- Leaving the irrevocability time blank.
- Letting a buyer sign without the financing or inspection condition they actually need.