You’ve found your dream home. You’ve done your due diligence. You’ve secured your financing. Now you’ll work with your Realtor to write an offer to purchase the home and present that offer to the seller.
MAKING AN OFFER
Writing an offer is a legal proposal to purchase a home. It’s a contract. (If for some reason, you change your mind after writing an offer, it’s still possible to revoke the offer. But there can be legal consequences for doing this, so you should seek professional guidance to ensure you follow the correct procedures) Once you’ve worked out the terms of your offer, your Realtor will present it to the seller. If your offer is accepted, its terms are legally binding. Most elements of an offer are negotiable to suit your needs better or accommodate the seller. It may take several rounds of negotiation by your Realtor, in consultation with you, to reach an offer that is acceptable to you and the seller.
WHAT AN OFFER TO PURCHASE INCLUDES:
- The Purchase Price
- A Deposit. Typically around 5 percent of the purchase price, but is negotiable. In most cases, the deposit cheque is made out to the buyer’s Realtor’s brokerage who will hold it in trust until the Completion Date.
- Conditions. Your offer can be clean and straightforward with no conditions. This is called a “subject free”. If it’s accepted, the deposit is submitted and the property is yours.
More typically, offers are written with conditions, or subjects, that must be satisfied before the sale can proceed. Typical subjects include inspection, financing, title search, property disclosure statement, and reviewing property-related documents (such as strata documents).
If the seller agrees to the conditions, and the offer is accepted, you then have typically 7 to 10 days (or whatever is negotiated) to fulfill the conditions. If you’re satisfied with the results and remove the conditions, the property is considered sold.
- Terms. These are the deal’s nuts and bolts like the price, dates, deposit, and items that are included as part of the sale.
- Closing Date. This is when the property you’re buying legally becomes yours (title & funds transfer).
- Possession Date. This is when you take possession of your new home, often a few days after the Completion Date.
- Adjustments Date. Typically the same as the Possession Date. Items such as property taxes, strata fees, and utilities that have been prepaid (or not paid at all) will be adjusted on a pro-rated basis from this date. You can review these items on the Statement of Adjustments provided by your lawyer/notary at Completion.
Multiple offers can be the most stressful way to buy a property. When the Greater Vancouver real estate market is hot, there are multiple offers for desirable properties. And even some not-so-desirable ones. Multiple offers can be great for the seller; but not so much for the buyer. Unless you’re prepared.
If you’re in a multiple offer situation, check out: Winning Strategies for Multiple Offers. If you have concerns about the offer or the property itself, it is always recommended to hire a Lawyer.
Listen to The Garbutt+Dumas Real Estate Podcast on Dealing with Multiple Offers: Sellers Perspective and Dealing with Multiple Offers: Buyers’ Perspective
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