BC Real Estate Contract Explained: A Step-by-Step Guide for Buyers and Sellers

If you’re buying or selling a home in Surrey or anywhere in BC, there’s one document that matters more than anything else:👉 The Contract of Purchase and SaleAnd here’s the problem:Most people don’t actually understand it.They see it for the first time:

• When emotions are high
• When decisions need to be made quickly
• And when they’re about to sign one of the biggest financial agreements of their life

From what I see working as a realtor in Surrey, this is one of the biggest gaps in real estate education.So let’s break it down properly.

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What Is the Contract of Purchase and Sale?

In British Columbia, the standard contract is created by the BCREA.It’s a standardized legal document used in almost every residential real estate transaction.👉 That’s important because:

• It creates consistency
• It reduces risk
• It protects both buyers and sellers

While some sections can be modified, most of the contract is standardized for a reason.

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Pages 1–2: Not Actually the Contract

The first thing most people don’t realize:👉 The first two pages are NOT part of the contractThey are:

• Explanations
• Cost breakdowns
• Acknowledgements

You’ll often be asked to initial these pages—but that’s just to confirm you’ve reviewed them.From my experience helping clients in Surrey, this is where many people assume they’re already “in contract”—but they’re not.

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Where the Contract Actually Begins

The real contract starts on:👉 Page 3 (Page 1 of the actual contract)This is where things become legally binding.

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Key Section #1: Buyer, Seller & Property Details

This section includes:

• Buyer names
• Seller names
• Brokerage information
• Property address
• Legal description
• Property Identifier (PID)

👉 Why this matters:You are legally identifying exactly what property is being transferredIn markets like Surrey—where there can be:

• Secondary suites
• Multiple titles
• Unique property structures

Getting this right is critical.

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Key Section #2: Purchase Price

The purchase price must be written:

• In numbers (e.g. $1,000,000)
• In words (e.g. One Million Dollars)

👉 This avoids confusion or disputes.It sounds simple—but I’ve seen situations in real transactions where clarity here really matters.

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Key Section #3: Buyer Rescission Period (Cooling-Off Period)

In BC, buyers have a 3-business-day rescission period.

• Fee: ~0.25% of purchase price
• Applies if buyer walks away for any reason

However:👉 This is often misunderstoodIt mainly matters when:

• Buyers submit unconditional offers
• The market is highly competitive

In today’s slower markets (like what we’ve been seeing across Surrey), it’s less commonly used—but still important to understand.

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Key Section #4: Deposit

The deposit is typically:👉 Around 5% of the purchase priceBut it can vary depending on:

• Closing timelines
• Market conditions

Common structure (especially in Surrey and the Lower Mainland):

• Deposit is paid after subjects are removed
• Held in trust by a brokerage

👉 This protects both parties.

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Key Section #5: Terms and Conditions (MOST IMPORTANT)

This is where the contract becomes customized.👉 And it’s the most important section.This is where you’ll see:

• Subject to financing
• Subject to inspection
• Subject to document review
• Custom clauses

From my experience writing contracts in Surrey, this section can easily run:👉 3–6+ pages longThis is where:

• Risks are managed
• Details are clarified
• Problems are prevented

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Key Section #6: Dates (More Important Than Price)

There are three critical dates:

Completion Date

👉 When money transfers

Possession Date

👉 When you get the keys

Adjustment Date

👉 When costs (like property taxes) are calculatedThese dates can:

• Be the same
• Or separated by days or even weeks

👉 This flexibility is often used strategically in negotiations.

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Key Section #7: Included Items (Common Mistake)

Included items must be written clearly.👉 Nothing is assumed.Examples:

• Appliances
• Window coverings
• Fixtures vs. removable items

Important distinction:

• Fixtures (attached) → included
• Chattels (loose items) → must be written in

From what I’ve seen in Surrey transactions, this is one of the most common areas where mistakes happen.

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Key Section #8: Assignment Clause

This is often crossed out—and misunderstood.👉 By default:
Contracts are assignable👉 But in BC:
Assignment is typically restricted unless agreed otherwiseThis became a major topic after “shadow flipping” concerns.In today’s market?👉 It’s rarely a major issue—but still important to understand.

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Key Section #9: Acceptance & Irrevocability

Once accepted:👉 The contract is bindingThe seller:

• Cannot back out

The buyer:

• Can only back out under specific conditions

Or through the rescission period (with penalty)

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Key Section #10: Residency (Very Important)

Both buyer and seller must declare:👉 Whether they are Canadian residents for tax purposesThis matters because:

• If a seller is not a resident
• And taxes aren’t paid

👉 The buyer could be held liableThis is something many buyers don’t realize.

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Final Step: Initials & Acceptance

Every page must be:👉 Initialed by both partiesEvery change must be:
👉 Initialed by both partiesIf not:👉 You do NOT have a legally binding contract

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Key Takeaways

• The BC Contract of Purchase and Sale is standardized—but customizable
• The first two pages are not legally binding
• Terms and conditions are the most important section
• Dates, deposits, and inclusions can significantly impact the deal
• Every detail must be initialed to be enforceable

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My Take

From what I’ve seen working with buyers and sellers in the Surrey real estate market, most issues don’t come from the price…👉 They come from misunderstandings inside the contract.And those misunderstandings can cost:

• Time
• Money
• Or even the entire deal

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Final Thought

The contract isn’t just paperwork.👉 It’s the rulebook for your entire transaction.Understanding it—even at a basic level—puts you in a completely different position as a buyer or seller.And in markets like Surrey, where deals can move quickly and details matter, that knowledge can make all the difference.

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Written by:
Steve Karrasch PREC
Karrasch Real Properties Team
Macdonald Realty