The Offer to Purchase
Buying a home is exciting and we all want the process to be simple and quick – just like buying something in a store. It’s the single largest purchase you may ever make in your life. It means stability, financial security, and peace of mind for the future. It’s a place where you expect to raise your family and spend many years enjoying your surroundings.
It’s important to work with a team of professionals who are looking out for your best interests. This means forming an agency, or sales relationship, with a REALTOR® before you even start looking at properties. We’ll help you decide on homes for sale, decide on some areas you like, and assist with a mortgage prequalification so that when you find your dream home you can write a strong offer.
Looking at homes for sale is exciting
Finding the right homes for sale is part of the process and your REALTOR® is an expert with highly specialized software to make this part of the journey easier. So you found the home that’s just right. Now what? Your REALTOR® will ask if you would like to make an Offer to Purchase. An Offer to Purchase is a legal contract to buy a property once the attached conditions have been met or fulfilled. We’ll help you write an offer that is both fair and compelling to both parties.
Your REALTOR® is trained to present a strong offer on your behalf with protections in the form of escape clauses or guarantees that will be honored by the seller. Real estate is a highly organized profession with safeguards put in place by the government and regulatory bodies to ensure that your transaction is safe and secure. It may be comforting to know that, by law, our sales representatives carry a mandatory Errors & Omissions policy that protects you and your investment at each step in the transaction.
Types of home purchase offers
Your offer can be firm (without conditions), or conditional:
- A firm offer to purchase a home means you want to buy it at an agreed price without any conditions. If the seller agrees, it’s yours!
- A conditional offer to purchase means you have placed some conditions on the mutual acceptance of the contract such as a clean home inspection or confirmation of your financing. When all conditions are met, the contract is finalized and the home is sold.
Factors to consider
When you’re making an offer to buy a home, there are six main elements to consider:
- Price. Your REALTOR® is trained to assess the market value of a property based on a number of factors, such as prior sales in the area and tax assessments. Deciding how much to offer above or below that amount will depend on competition in the market, if any.
- Deposit. A deposit isn’t required by law but it will show the seller that you are serious and have the means to negotiate. Depending on the market, a deposit may range from $500 to 5% of the purchase price. Generally, the higher the deposit, the more confidence the seller will have in your offer.
- Terms. Price and details of financing offered by the seller, if applicable, are considered “terms”.
- Conditions. Conditions are the dependencies the contract refers to; that must be accepted by the buyer before the contract is valid and complete. Conditions might be a home inspection, confirmation of your financing, inspection of rental contracts for hot water heaters, etc.
- Inclusions and exclusions. Some features of the home, such as a washer and dryer or window coverings, are negotiable and can be included. The seller may stipulate that some items, such as a favourite light fixture, are not included and will be removed. These items are known as chattels.
- Closing day. In Canada, closing day is the day the title of the property is legally transferred to the new owner and funds are transferred to the seller. This transaction is done by the lawyers or notaries hired by each party. Your REALTOR® will work with you and the seller to find a mutually acceptable moving date.
Contact one of our sales representatives to discuss your next transaction.