ABCs of The Offer
You’ve found a home? Congratulations! Now, if you actually want to make it yours, you have to make a successful offer, one that the seller will accept.
Preparing the offer.
REALTORS® are expertly trained and will prepare the offer for you. Here are some terms you’ll see in the offer:
- Buyer or Purchaser – That’s you.
- Seller or Vendor – The present owner(s).
- Purchase Price – The most important number.
- Deposit – A cheque you write to the seller’s broker, who deposits it in a trust account. This is your way of saying “my offer is serious”. The size of the deposit is up to you.
- Clauses particular to this agreement – Every transaction is unique, and your REALTOR® may add conditions important to you. Making your offer conditional upon a proper Home Inspection is a good idea.
- Chattels included and fixtures excluded – Be sure you know what is included with the house! The washer and dryer, the microwave, draperies, light fixtures. Don’t leave anything to ‘chance’ because chances are, it won’t be there when you move in.
- Irrevocability of the offer – The length of time you give the seller to consider your offer. Usually less than 48 hours.
- Completion date – The glorious day you take possession! Often 30 or 60 days after signing.
About the offer
When it comes to the type of offer you make, it really depends on your individual situation. Discuss your options with your REALTOR® to see which of these offers is right for you.
- Firm Offer to Purchase - Usually preferable to the seller as it means you, the buyer, are prepared to purchase the home without any conditions.
- Conditional Offer to Purchase - Usually means there are one or more conditions on the purchase, such as “subject to home inspection”, “subject to financing”, etc. The home is not sold unless all the conditions have been met.
- Acceptance of Offer - An Offer to Purchase is presented to a seller who may choose to accept the offer, reject it, or submit a counter-offer. The counter-offer may be in regards to the price, closing date, or any number of other variables. Offers can go back and forth until both parties have arrived at an agreement or either side ends the negotiations.
Submitting the offer
You’ve signed on the dotted line and your REALTOR® has whisked your offer to the seller’s REALTOR®. This process works best when you don’t meet the seller in person. What next?
- The seller can accept your offer – Fantastic, when do you move in?
- The seller can reject your offer – It’s not common for an offer to be completely rejected. Your REALTOR® will likely investigate, to see if there was some sort of misunderstanding.
- The seller can ‘sign back’ or counter your offer- The seller wants to alter ‘some part’ of your offer. It’s almost always the price. The seller will cross out the price on your offer and write a higher number. Now it’s your turn to sign back, and see if you can bring that number down.
It can feel a bit like a ping-pong match. Emotions can run high, so both sides will be reminded that a little flexibility goes a long way. Good luck!
