10 - Making an Offer
10 - Making an Offer
You’ve found a home you really like, and you want to move forward toward a purchase. What comes next? It’s time to make an offer.
What Goes in the Offer:
- Basic Details: The address and legal description of the property the offer is made for, as well as the names and contact information of parties involved (sellers, buyers, and agents or brokerages).
- Offered Price: This will not necessarily be the same as the seller’s asking price. You and your realtor will consider many factors when choosing an offer price, including the home’s condition, your own needs and motivation, seller’s motivation, length of time on the market, multiple offers, and market conditions.
- Chattel: Any items to be included or excluded in the sale of the home including appliances, furnishings, drapes, and mirrors. Request items you would like included explicitly in the offer, rather than assuming they will be left behind.
- Deposit: You and your realtor will decide upon a deposit amount. This is typically 3-5% of the purchase price, although in some cases (such as multiple offers) a larger deposit can show serious interest and sway the seller toward your offer over others.
- Terms: Include the offer price, financing details (you will need to obtain a mortgage, or you can request here to assume the seller’s mortgage), and an expiry date for the offer.
- Conditions: Specific conditions your offer is subject to, such as obtaining financing, selling your own home, obtaining a land survey (useful if you may require building permits down the line) or completing a home inspection.
- Date of Closing: The date you expect the legal transfer of the property title, to finalize the financial transaction, and to take possession of the home. This is usually between 30-90 days after the offer, although closing dates can vary significantly depending on buyer and seller circumstances, and may be negotiated.
Points to Consider:
- Imagine yourself as the seller and read over your offer as though you were receiving it. If you are set on this property, you’ll need to make the offer as appealing to the seller as possible to raise the likelihood that it will be accepted.
- Verbal promises are not enforceable in real estate law, so make sure everything you wish to convey is in the written offer itself.
- The seller will have completed a Seller Property Information Statement, outlining any material defects present in the home which are known to them. Read these documents carefully ad ensure you have been given the details of all such disclosures in full. You and your realtor can go over this step again during the offer process.
- Don’t be tempted to cut costs by skipping a home inspection. This is a small price to pay to protect your interests. Of course all homes have minor flaws, so remember that small maintenance issues that arise during the inspection are not grounds for renegotiation. In the event that the inspection turns up major issues, your realtor will help you decide if you want to renegotiate at a lower price, or withdraw your offer and keep looking.