Selling or buying a home privately, without a real estate agent

No. Buying or selling a home privately, sometimes called for sale by owner, is legal between any two people, including family members, friends, or a landlord selling to a tenant. What you can't skip is a proper written agreement of purchase and sale. A handshake deal or a text message thread isn't enough to protect either side if something goes wrong later.

Never pay a deposit straight to the seller. When a licensed brokerage is involved, the deposit sits in a regulated trust account. Without one, no law says where the deposit goes, so the usual practice is a lawyer's trust account until closing. Your agreement should say exactly who holds it, when it's released, and what happens if the deal falls apart.

Ontario's real estate regulator, RECO, insures deposits held by licensed brokerages against theft, fraud, or insolvency, generally up to $200,000 per claim. That coverage applies only to deposits handled through a registered broker or salesperson. In a private sale, there's no brokerage and no RECO coverage, so a lawyer's trust account and a carefully worded agreement stand in for it. You also lose the checks an agent would normally run on the listing.

Your real estate lawyer reviews or drafts the agreement, checks that title is clear, confirms the property tax and any liens, arranges for title insurance, and handles the closing funds and registration. In a private deal this work matters more, since no agent is double-checking the paperwork along the way.

At minimum: the purchase price, closing date, deposit amount and where it's held, what's included (appliances, fixtures), and conditions like financing and a home inspection. Skipping a financing condition is a common mistake, since without a lender pre-approval already in hand, you're exposed if the buyer can't get a mortgage. See our page on before you sign the agreement for what a solid agreement covers. A lender will still order an appraisal, and if it comes in below the agreed price, the buyer may need a larger down payment to close. Land transfer tax still applies the same as any other sale, calculated on what the buyer gives for the property, which is normally the purchase price. If the sale is between family, like a parent selling to a child below market value, the Canada Revenue Agency can still treat the transaction as happening at fair market value for tax purposes, so get advice from an accountant before pricing it well under market.