Writing An Offer

Preparing the Offer to Purchase

Buying a home can be the largest purchase you ever make in your lifetime, yet some people will go into this process without considering the pros and cons. During this section you will find out all you need to know before entering into an Agreement of Purchase and Sale.

What is an Agreement of Purchase and Sale "Offer"?

An ‘Offer’ is a written legal binding document from a buyer which offers a price for a specific piece of property. Once you have submitted a firm offer to the seller this means that the purchaser agrees to purchase the property with no conditions attached. If the seller accepts the offer then both parties are bound by the Agreement. Sellers often do not accept offers the first time around they will most often counter-offer.  A counter-offer is an offer made by the seller back to the buyer altering one or several terms and/or conditions of the offer as originally written.
 
If the offer is conditional, this means that you have agreed to purchase the property under certain conditions. The list of conditions have to be listed within the Agreement of Purchase and Sale. The most common condition provides the buyer sufficient time in which to arrange a mortgage, if they are not successful in doing so then the offer is null and void and the deal will cease to exist.

Can I write my own Offer?

A licensed Real Estate Agent will prepare the ‘Offer’ for you, unless you are making an offer on a property that is not listed with an Agent, which is called a For Sale By Owner (FSBO) agreement. Once the agent has completed the Agreement with the details that you have specified go over it with a lawyer to ensure that it protects your best interests. If you are making an FSBO agreement, it is advisable to consult a lawyer or a real estate agent in order to assist you in the process. There is no change to the purchaser for this service because the agent is paid by the seller. 

Details of an Offer contains :

The primary details of an offer contains, the name of the  purchaser (buyer), the name of the vendor (seller) and the legal description of the property along with it’s dimensions.  The purchase price and the amount of deposit you offering.

Also contained in the Agreement are any conditions you may have regarding the purchase of the property, a list of all the chattles that are included in the purchase price ie; fridge, stove, washer, dryer, window coverings etc. these have to be listed otherwise you may not get them at the ed of the process. The fixtures in the home are items that can not be removed for example, the doors, electrical light fixtures, these items automatically goes with the purchase. If the seller wants to remove a chandelier this has to be mentioned in the counter offer and has to be replaced by a standard light fixture. 

The deposit is the money paid by the buyer at the time the offer is submitted.  The cheque should be made payable to the real estate agency.  If the offer is accepted, the agency will hold the deposit in trust until completion of the transaction.  

We recommend that you make your deposit large enough to show the seller that you are serious but at the same time try not to make it so large that you are placing all your funds at risk. Try to make your down-payment less than two percent of the offered price, otherwise the lender will enquire as to how you acquired the funds. Most times this is not a problem but if you have a short closing period or if you had a hard time coming up with the money it could present a problem.

Another reason why you should limit your deposit is, situations sometimes arise where there are disputes between the buyer and seller and the less money you have tied up the less funds you have placed at risk

However, there are some exceptions to the rule, if the real estate market is hot there can be multiple offers on any given property and a large deposit will have your offer stand out among the rest. This could entice the seller to accept your offer instead of someone elses’ and also convince the seller to accept a lower offer. More money up front can save you money later.

 Let the agent know you require to have certain disclosures on the property made as part of the offer. The seller is requried to be open and honest about any problems with the home that would impact your decision. It is imperative to know if the house is in a flood zone, are there any noise issues, any problems with the roof.  Often times sellers will leave unwanted property in the home or on the property, be sure to have conditions in the offer that spells out the yard has been kept up, and any debris has been cleared away. 

Closing Date
 
This is the date the seller is paid and you become the owner of the property.  Most transactions close on the actual date but sometimes unexpected issues occur, do not be so inflexible that a delay creates insurmountable problems. Always have a backup plan in place.