When you buy a home in Alberta, you sign a contract. A real estate purchase contract is legally binding, so failure to keep the terms of the agreement can be costly and lead to legal action. You can avoid the stress of unnecessary expense or unintentional violation of the law by learning from others’ mistakes.

Top 3 Legal Mistakes Homebuyers Make

Too many homebuyers in Alberta make mistakes that cost them dearly, yet could have been avoided. These are the top 3 real estate law mistakes and how you can avoid them.

1. Insufficient Review of the Purchase Contract

Contracts make for dry reading. Nobody enjoys all that fine print and unfamiliar legal terminology. But failing to thoroughly read and understand every clause in your purchase contract means you don’t actually know what you’re agreeing to.

So, what should you look for when reviewing your purchase contract line by line? Here are a few key points to read with extra vigilance.

Purchase Price & Deposit Information

The purchase price and the deposit amount on the contract should match what you agreed to with the seller. But don’t just skim this section to look for the “$” sign with the correct numbers behind it. Read the words that spell out the price. The words must match the numbers.

Also, look closely at the terms of the deposit. For example, is there a requirement to place the deposit into an account that accumulates interest?

Possession Date

Your possession date is a major life event. It’s the date you circle and highlight on your calendar in bright colours and bold letters because it’s the date your new home finally becomes yours. As soon as you have possession, you can start moving in or doing renovations or whatever else you have planned for the place.

Be sure the possession date on the purchase contract is the date you agreed to. Also check the closing date, which is the date the funds are transferred.

The Irrevocable Clause

The Irrevocable Clause says that the buyer cannot take back their offer until after a specified date, and the seller must accept or decline the offer within a certain time frame. This clause gives the seller time to evaluate offers and protects them from losing out on previous offers. Your offer becomes invalid after the date of irrevocability has passed without a signed purchase contract, at which point the deposit must be returned.


Always review conditions carefully and ensure that any conditions you want in the purchase contract are included. Common home purchase conditions include:

  • Purchase is dependent on the buyer securing financing
  • Purchase is dependent on a favourable home inspection
  • Purchase is dependent on a lawyer’s review and approval of the purchase contract

Because real estate purchase contracts are legally binding, it’s important to have your contract reviewed by a lawyer, especially if the contract was not drafted by a lawyer. It’s simply not worth the risk.

2. Engaging a Lawyer Too Late

Remember: Once you’ve signed your real estate purchase contract, you’re legally bound by it. You cannot change your mind or back out of the transaction without costly implications. With this in mind, why would you wait until after you sign the contract to engage a real estate lawyer?

The best time to engage a real estate lawyer is before you sign a purchase contract.

Your real estate lawyer’s job is to protect you, and to facilitate the entire real estate transaction, including the closing. Their role ensures that everything that happens is legal and that your rights and interests are upheld. The involvement of a real estate lawyer goes far beyond securing financing and transferring the property title.

Especially in a hot real estate market, when competition is fierce, it’s tempting to quickly sign a contract to win a bidding war. Resist this temptation! Engage a real estate lawyer early to:

  • Help with drafting the purchase contract
  • Review the purchase contract
  • Negotiate amendments to the purchase contract
  • Perform due diligence on your behalf, including title and tax searches for the property
  • Help you secure financing
  • Facilitate the sale closing, including transferring funds and title, and ensuring the transaction is completed on time

When a real estate lawyer reviews your purchase contract before you sign it, you can sign it with confidence. Engage your lawyer before you sign to get the maximum benefit from their expertise and to protect you, your money, and your property.

3. Inadequate Due Diligence

The purchase of a home is an act that will significantly impact your future in multiple ways. Insufficient due diligence could result in your home purchase becoming a deeply regrettable decision. Many homebuyers in Alberta make this mistake because they’re anxious to seal the deal and don’t want to take the time. We understand, but strongly discourage this.

Proper due diligence typically involves the following:

Home Inspection

A home inspection provides valuable benefits and protection. It reveals critical information about the home (such as safety hazards or legal infractions such as illegal additions) and can be used as negotiating leverage or an opportunity to back out of the home purchase.

If you really want to avoid waiting for a professional home inspection, hire an inspector to do a walkthrough during an open house. While it may not be a comprehensive inspection, it’s certainly better than no inspection at all.

Real Property Report Review

A real property report is a legal document prepared by a land surveyor to show the boundaries of the property and to note all landmarks, utility lines, easements, and improvements on the property (e.g. buildings, sheds, decks, fences, etc.), including their dimensions and location. It’s important to review the real property report to ensure the home you want to purchase complies with municipal bylaws.

One example of the value of this type of due diligence is when you want to purchase a home with a secondary suite that’s marketed as a rental space for income potential. If the rental suite is not compliant with municipal bylaws, you won’t be able to legally earn rental income from it.

Property Title Review

A review of the property title will reveal any restrictive covenants or right-of-ways you should be aware of.

restrictive covenant is attached to the property and doesn’t automatically expire. It controls how property is used. For example, municipal bylaws about building codes.

right of way is an easement that allows access to another property. For example, your property may provide access to utility services to pass through to your neighbour’s property.

Real Estate Lawyers in Calgary & Strathmore

Are you buying a home in the Calgary or Strathmore area? Avoid these costly legal mistakes and engage a real estate lawyer today. The experienced real estate lawyers at Getz Collins and Associates can help you by drafting or reviewing your real estate purchase contract, doing due diligence for you, and facilitating the home purchase process every step of the way. Contact us today.