Are you ready to buy? – Lets get started by writing an Offer.
Here’s what to expect in your Buyer Package.
What’s in it?
- CONTRACT OF PURCHASE AND SALE
- DORTS – Disclosure of Representation in Trading Services
- DISCLOSURE OF REMUNERATION
What is an Offer?
Your Offer is in your Contract of Purchase and Sale.
An offer to purchase real estate is a legal document, which outlines a buyer’s terms they’re willing to offer the seller. This is in no way binding. The buyer has put their intention in writing to purchase with specific terms. However, it’s up to the seller whether or not they want to accept the terms being offered.
Making an Offer
How to Make an Offer
When you have found a home you are interested in buying, let Us will walk you through the process of drafting an offer to purchase. Its our job to communicate the offer to the seller or the seller’s real estate agent for you. Some properties are in demand and you will not be the only interested party making an offer. We will assist you in generating an offer that is reasonable and protects your interests using specified terms and conditions.
An offer can be drafted with or without conditions; an offer without conditions is known as a firm offer and one with conditions is known as a conditional offer. A conditional offer represents the party with the placement of certain conditions on the purchase. Some of these conditions could be “subject to financing approval”, “subject to the strata council allowing pets”, “subject to the buyer’s house selling”, “subject to an approved home inspection”, among many others.
The seller may accept your initial offer, reject your offer or present a counter-offer. The counter-offer may differ from your original offer in respect to price, conditions, the closing date or any other items. Offers can be countered back and forth between the parties until one of you accepts or rejects, ending the negotiations.
When you’re ready to make on offer on a house, your agent will draw up the necessary paperwork. In order to be valid, your offer documents much include some specific details, according to Canada Mortgage and Housing Corp.:
What is a COUNTER Offer?
When a seller receives an offer, they can accept the offer as written, reject the offer, submit a counteroffer or do nothing. There is nothing illegal or unethical if they do not respond. In fact, as the buyer, you have the same exact ability if you receive a counteroffer.
The process by which you and your realtor decide ow much you are will to pay to own the property. Here are some secrets to Negotiation
What is on the Offer?
- The Names of the Property Buyer and the Property Seller
- Address of the Property
- Purchase Price
- Deposit Amount
- Time to get the rest of your finances in Order- Usually about 7 working days.
- Other Conditions – Such as a Home Inspection. (See Below)
- When the Offer Expires?
- If the accept your offer, when you would like to take possession of the home.
Firm versus Conditional Offer:
A firm offer is one that has no conditions attached. (See Below). A firm offer is common in a hot market. With all other things being equal, a seller is more likely to accept the unconditional offer over one that could potentially fall through for a number of reasons.
What kind of conditions should I put on my offer?
Your offer to purchase a home can be firm, meaning it has no conditions attached to it. On the other hand, a conditional offer means that in order for the offer to be valid, certain terms must be met. Some common conditions include:
- Purchase conditional on financing: This is a common condition for first-time homebuyers making an offer on a house, and it requires the sign-off of the mortgage lender in order for the deal to go through. The buyer will have a few days to get this, and the process will include a home appraisal. If the lender does not agree to finance the property, the buyer will notify the seller and the offer becomes null and void.
- Purchase conditional on home inspection: A home is likely the biggest purchase you’ll make in your lifetime, so it’s always recommended that the offer be conditional on a satisfactory home inspection. A professional home inspector will look at things in and around the home that are openly visible (that’s right, he or she will not be opening up walls or floors). The inspector will examine things like the structure, roof, plumbing, heating and electrical systems, to ensure the house is in good condition. If the home isn’t up to par, this condition allows the buyer to return to the seller and request repairs, a reduction in the price, or can rescind the offer entirely.
- Purchase conditional on the sale of a home: If a prospective homebuyer already owns a home, he or she may want to ensure that it is sold before agreeing to purchase a new property. This isn’t ideal for the seller, as every condition has a potential domino effect.
- Your Realtor will usually inform you when he or she learns that a multiple offer situation exists.
- As a general rule, it’s a good idea to make your best offer in these circumstances as you may not get a second chance.
- Our duty is to write up the offer as cleanly as possible – the fewer terms and conditions you include, the more attractive it will be to the seller.
- Offers are normally presented to the seller in the order they were received. It’s very important to remember that under most circumstances the seller is under no obligation to consider, respond, or counter your offer. Just because it may have been the first offer presented does not mean the seller is obliged to consider it and respond to it prior to considering and dealing with other offers.
- Be aware that even a full-price offer does not guarantee your purchase of the property – other offers may be for above the asking price or may have more attractive conditions attached.
- The seller may have given instructions to the listing agent not to divulge to the Realtors acting for potential buyers that multiple offers exist – therefore, other offers may exist that you are not aware of.
- If the seller counters your offer, your offer remains at risk as there is always the possibility that the seller could rescind the counter-offer and accept another one before you have had an opportunity to consider and respond to the counter-offer.
- We will keep in close contact with you through this period.
- If your offer is unsuccessful you may choose to make a backup offer which, if accepted, would come into effect should the accepted offer collapse for any reason — ask your Realtor for details.
How long is my offer good for?
- When buying a property, you will often be looking at several different properties on sale. When you make an offer on a property, you usually won’t make an offer on another. Therefore, the property seller needs to give you feedback as soon as possible. It is important to include in the real estate offer letter a set deadline by which the property seller has to either reject or accept your offer. If not executed by that date, the offer is automatically terminated and you can continue your property search.
When does my offer expire?
- Most real estate contracts have expiration dates and closing dates. An expiration date usually applies to the final date by which the other party must accept the offer. If the second party does not accept the first party’s offer, then the offer will certainly expire on the date stated in the offer.
What if the seller does not accept my offer?
There are many reasons a seller may or may not accept your offer. Regardless of the reasons…the search for your dream home must continue. Some reasons for not accepting may not be through no fault of your own.
Some reasons may include:
- They received a higher offer. The seller might have received a higher offer around the same time you made your offer, or shortly before yours.
- They have unreasonable expectations. Some sellers are realistic about local market conditions.
- You don’t have your financing lined up. Have you been pre-approved for a home loan?
- You asked for too many concessions. Did you ask the seller(s) to pay some, or all, of your closing costs?
- You insulted them by offering too little. You said you used comparable sales in the area to determine the amount you offered.
- You skipped the earnest money deposit. In a typical real estate scenario, the buyer will offer to put a certain amount of money down in the form of a deposit.
- They didn’t like the type of loan you were using. Some sellers (and their listing agents) are prejudiced against certain types of financing.
Be realistic about your situation and understand what you can afford. You should have your down payment and you should be good at managing debt.
The cost of buying a home = one-time costs (down payment, legal fees, inspection fees and taxes) + monthly costs (mortgage, utilities, maintenance, insurance and property taxes).