Real Estate Paperwork Explained: For Ontario Sellers (Updated 2024)

Last year, we wrote a guide explaining Real Estate Paperwork for Buyers. Today, we’re exploring the paperwork you’ll be asked to sign when you sell your home in Ontario.

But before we begin, some overall info you should know:

• The listing agreement and associated paperwork is between you and your REALTOR’s brokerage – not the actual REALTOR you are working with.
• The Ontario Real Estate Association provides REALTORS with standard forms and agreements – these are the documents referred to below.
• As of December 2023, a new option became available to brokerages: Designated Representation. In this arrangement, the individual agent (or agents) you are working with is responsible for representing your interests, and the brokerage simply provides services (such as advertising or administration). At the BREL team, we operate under Designated Representation
• Traditionally, it was the brokerage that provided this representation and, by extension, all its agents (as agents of the brokerage). This is called Brokerage Representation. The result of this was that working with a buyer agent and a seller agent from the same brokerage meant you were under Multiple Representation, where both parties were restricted in what help they could provide. Designated Representation avoids this
• Real estate forms, documents and agreements can be signed electronically with an acceptable electronic signature program (eg. Docusign), including the Agreement of Purchase and Sale.
• Your agent should take the time to explain what the documents mean to you – don’t be afraid to ask questions and don’t sign anything without reading it.
• You should receive copies of all paperwork you sign.

Real Estate Listing Paperwork

The RECO Information Guide

The first document you will likely encounter is the RECO Information Guide, introduced in 2023. The Real Estate Council of Ontario (the consumer protection body) has mandated that this document be given to any prospective client in advance of providing any services or advice. It contains information anyone contemplating working with a realtor should know before deciding to enter (or not enter) an agreement to work together.

The purpose of the guide is to help consumers understand:

• The benefits of working with a realtor, as well as the risks of self-representing (which is always an option)
• The duties agents and brokerages owe their clients
• Representation agreements, including commission
• Disclosure rules during bidding wars where there is more than one offer on a property
• Other topics including Multiple Representation, and how to file a complaint to RECO

Here is a link to the Information Guide on RECO’s website

Your realtor should discuss this guide with you, and will ask you to sign a copy, acknowledging that you were given it and had its contents explained to you.

In addition to the RECO Information Guide, you’ll be asked to sign one of 2 documents further defining your relationship:

1. A Listing Agreement; or
2. The Self-Represented Party acknowledgement form

Listing Agreement

The Listing  Agreement is the document that gives the listing brokerage permission to list your home for sale, along with all the terms and details that go along with representing you as a client. Important parts of the Listing Agreement include:

• The top section of the listing agreement:
  • At the very top of the agreement, the Seller must initial if the listing will be on MLS  or listed exclusively (Related: see Should You List Your Home Exclusively?)
  • The details of the listing brokerage, the Sellers and the address of the property
  • NEW as of 2023, if (like the BREL team) the brokerage is acting under Designated Representation, the name(s) of Designated Representative(s)–aka the specific agent(s) responsible for promoting the seller client’s best interests, protecting their confidentiality and with a fiduciary duty to that seller.
  • The length of the listing agreement, with an initial required from the Seller. Note that to appear on the Toronto MLS, the agreement must be for at least 60 days;
  • The asking price – note that this does not commit the Seller to accepting an offer at that price and that the listing price is fully at the Seller’s discretion.
• Section 1: Definitions – defines the words used in the listing agreement
• Section 2: Commission
  • The commission amount – note that this is the TOTAL commission (excluding HST). Section 3 addresses how much of the commission will be offered to the agent who represents the Buyer.
  • The Holdover period – The holdover period confuses a lot of Sellers. Also explained in the RECO Information Guide, the “holdover clause” outlines the circumstances under which the contract to pay commission could apply for an additional period of time (specified in this section) beyond the main contract expiry. In essence, it commits the Seller to paying commission if the property is sold within X days (usually 90) after the listing agreement expires, to someone who was initially introduced to the property during the listing period. The holdover period protects the agent from Sellers who might successfully make use of the services of a REALTOR (pricing, staging, marketing, etc.), but then negotiate a private sale at the end of the agreement as a way of avoiding paying commission. Note: if a new listing agreement is signed after the original agreement expires, the Seller is only responsible for any difference in commission between the two, if any.
    • Example: On January 1st, Judy signs a listing agreement valid until March 31, at 5% commission, with a 90-day holdover provision. The house does not sell during the term of the agreement.
      • Scenario 1: On April 20th, one of the Buyers who saw the home while it was listed for sale approaches Judy directly and buys it privately. Because the offer is within the holdover period, Judy would be required to pay commission.
      • Scenario 2: On April 2nd, Judy decides to re-list her home with another real estate agent, at a 3% commission rate. On April 20th, one of the Buyers who was originally introduced to the home during the first listing makes an offer to purchase it through the new agent. Judy would be responsible for paying 3% to the new agent, and 2% to the original agent.
  • If an Agreement of Purchase is agreed to by a Buyer and a Seller but the Seller does not close because of default or neglect, the Seller must still pay the commission to the listing brokerage.
• Section 3: Representation – The agreement reiterates the ways that brokerages and their agents can represent Buyers and Sellers and the rights and obligations around multiple representation (when one brokerage or designated agent represents both the Buyer and the Seller in the same transaction). It specifies what information can and cannot be shared with the other side.
  • NEW as of 2023 are two sections outlining details of two specific scenarios: “Limited Services” Representation, where a seller and their agent have contracted for only specific, limited services to be provided; and
  • Multiple Representation under Designated Representation,  which only occurs if the specific designated representative (i.e. the same agent) represents two clients on the same transaction. (This is as opposed to the traditional Brokerage Representation, where two different agents at the same brokerage representing two clients on the same transaction would be considered multiple representation, and thus subject to restrictions on services .)
• Section 4: Finder’s Fees – addresses finder’s fees and incentives which may be payable to the brokerage (for example, a brokerage might receive a referral fee from a bank or mortgage broker).
• Section 5: Referral of Enquiries – ensures that the Seller understands that if they are approached directly by a Buyer or receive an offer to purchase the home from a third party, they must inform their agent (and the commission will still be payable during the term of the agreement).
• Section 6: Marketing  – gives the brokerage exclusive permission to market and show the home to prospective Buyers. NEW as of 2023: it also states that within 3 days of any public marketing of the property (e.g. a Coming Soon sign or ad), the property listing must be put on the public MLS and available for other realtors to view/visit with their clients. This is to ensure free and open competition, and discourages agents from keeping listings “secret” in the hopes of finding their own buyer for the property.
• Sections 7 and 8 deal with warranties, liability and insurance. In short. The Seller is confirming that they:
  • have the right to offer the property for sale;
  • won’t hold the listing brokerage responsible for loss or damage to the property  during the term of the listing agreement; and
  • Have property insurance
• Section 9: Spousal Consent – It addresses spousal consent for the sale of a matrimonial home. Talk to your lawyer if you aren’t sure about whether the sale of your home needs spousal consent.
• Section 10: Verification of Information – gives permission to the listing brokerage/agent to obtain and verify information about the home.
• Section 11: Privacy –  relates to privacy and specifies what to expect

Note that a Schedule may be attached to the standard Listing Agreement to add additional terms, including specific services to be provided by the agent/brokerage.

Information and Disclosure to Self-Represented Party Form

Buyers and Sellers are, of course, free to represent themselves if they are confident that they have the expertise and/or experience to do so. In this case, a realtor would be prohibited from providing services, advice or opinions, including advice or an opinion on price, terms, or offer clauses. An “SRP” (Self-Represented Party) is 100% on their own!

Of course, there is a form for that too—the realtor involved will supply it and ask you to sign the acknowledgement saying this is the route you have chosen.

Here is a link to the Self-Represented Party form on RECO’s website

If you do end up selling a property this way, note there is also a form to allow for the data from that sale to be recorded on the MLS.

FINTRAC

This is a mandatory identification document required by the federal government, and stands for the Financial Transactions and Reports Analysis Centre of Canada.

Offer Paperwork

Agreement of Purchase and Sale

The Agreement of Purchase & Sale is the legally binding agreement for you to purchase a home and defines the price, terms and conditions of the sale. In Ontario, a real estate transaction has to be in writing to be legal. There’s a standard version of the form for house purchases and one for condo purchases. The most important non pre-printed parts of the Agreement of Purchase and Sale are as follows:

• Legal names of the Buyers and Sellers
• Legal description of the property (including the lot details for houses, or the condo corporation for condos)
  Purchase price
• Amount and terms of the deposit [Related: All About Deposits]
• Irrevocable time (in other words, the time the offer expires if not accepted by the other side)
• Completion date (the date you take possession)
• Inclusions and exclusions (eg. appliances, light fixtures, etc.)
• Identification and terms of any rental items (eg hot water tank)
• For condos: description of the condo fees and what they cover; description of parking and locker
• Whether or not HST is applicable (usually not for resale residential sales)
• Directions for the lawyers, including important dates for title searches, closing arrangements, etc.
• The schedules attached to the Agreement of Purchase and Sale form part of the agreement and are customized by the agents. Generally speaking:

Schedule A is created by the brokerage representing the Buyer and includes the unique terms and conditions for the sale, favourable to the Buyer. Schedule A is where any conditions would be outlined (eg.  financing, home inspection, status certificate review, etc.) as well as any other terms.

Schedule B is often included and is created by the brokerage that represents the Seller, containing clauses to protect the Seller. Typically there will be details regarding the handling of interest on the deposit held by the selling brokerage, as well as clauses limiting the selling brokerage’s liability.

Important info about the Agreement of Purchase & Sale:

• Time limits matter on the Agreement of Purchase and Sale – if an agreement expires at 11:59 PM, it’s too late to accept it at 12:01.
• It’s not enough to just sign something within the time frame, the accepted document also needs to be delivered to the other side before the expiry time (these days, this is usually done by email).
• The time zone that is relevant is the one that the property is located in – it doesn’t matter if the Buyer is in Europe and the Seller is in Asia. If the property is in Toronto, Toronto time dictates the time.
• All negotiations must be in writing to be legal
• Anything changed or written in must be initialled by all parties
• The brokerages and their agents are not parties to this agreement – it’s a legal contract between the Buyer and the Seller and is merely created by the agents/brokerage.

Confirmation of Cooperation and Representation

The Confirmation of Cooperation details the type of relationship the Buyer and Seller have with their agent/brokerage (eg. Client; SRP) and the commission agreement between the Seller’s brokerage and the Buyer’s brokerage. It also details what happens if the brokerage or designated agent represents both the Buyer and the Seller (and when multiple representation is or is not occurring) and the various combinations of these scenarios. Both brokerages are party to this agreement so both agents will sign it.

Real estate forms and paperwork aren’t nearly as complicated as they appear – but make sure your agent takes you through what they mean and don’t be afraid to ask them for clarification.

Other Forms and Paperwork

You may also be asked to complete or sign:

• A Staging Contract –  if your REALTOR is including staging in their commission (like the BREL team does), there may be a staging contract outlining terms and expectations.
• Showing Instructions – You’ll need to provide the information for booking showings – who to notify of a showing request, how much notice is required, allowable showing times, instructions for any security systems, etc.
• Seller Direction for Offer Presentation – By law, Ontario REALTORS have to present any offers received to the Seller right away. If you’ve decided to delay looking at offers (e.g. as part of a multiple offer strategy, you have an ‘offer date’) and don’t want to review bully offers, you’ll be asked to sign this form.
• Lockbox Consent form – some brokerages will ask you to sign a form consenting to installing a lockbox on your property
• Open House Consent form –  some brokerages will ask Sellers to sign a liability-limiting form for open houses
• Seller Property Information Form (SPIS) – The SPIS is completed by a Seller and includes details about the home and disclosures. It’s rarely used in Toronto these days.

Related: 

What to Expect on Offer Night

What to Expect on Offer Night – Bidding Wars

What to Expect on Offer Night: Bully Offers