Offer to purchase explained
Documents - Offer to purchase and counteroffer
1. Call the owner and visit the property
Be sure to ask the owner lots of questions and thoroughly review the property. If you are seeing what you like, you may want to discuss price, possession date, and conditions with the owner.
We strongly recommend that you always have a real estate lawyer review everything before you sign. So, the first step in making an offer is consulting your real estate lawyer. In addition to deciding upon your desired purchase price, conditions and possession date, your lawyer will need the following information from the seller: seller’s name(s) as it appears on title, address of the property, seller’s lawyer, and all included and excluded items.
All questions regarding the offer to purchase should be forwarded to your lawyer.
2. When a seller is presented with an offer, three possibilities are available
- 1. The offer is accepted.
- 2. The offer is rejected.
- 3. The seller makes a counteroffer.
3. Offer to purchase
- Contains the legal names of the purchaser and seller.
- Contains the legal address of the property.
- Contains the amount of the deposit and the amount to be paid on closing - paid in trust to the seller’s lawyer.
- Lists what items are included (chattels) - e.g. fridge, stove, washer and dryer, fixtures.
- Lists what items are excluded - e.g. satellite dish, wood stove, ...
- Lists all rental items - e.g. hot water heater.
- Includes a deadline for acceptance date - this is the date and exact time that the offer will expire if not accepted.
- Any other conditions.
4. Conditions: some things to consider
Conditional on financing - This allows you, the buyer, time to arrange a mortgage or collect the money to be paid. One week is usually enough to obtain a mortgage. If you have not received approval for the money within the stated time period, then the contract is void and the home goes back on the market. If you receive financing before the stated period, you will complete a subject removal document with your lawyer, who will then send it to the seller’s lawyer.
Conditional on home inspection - This allows you time to have a home inspector come and evaluate the home. One week is usually enough time to find one and to have a home inspected. It is important to note that a home never "fails" a home inspection - it simply involves a building expert coming in to inspect the house to give you an opinion of the building. The inspector will advise you of any problem or potential problem he or she has found. You may then decide to waive the home inspection clause and proceed with the purchase of the home or to back out of the contract based on the home inspector’s assessment. The decision to remove the condition is up to you, the buyer.
For example - the home may have serious damage and the home inspector may point out many problems with the home. The buyer has the option of proceeding or backing out of the purchase. Essentially, clauses like financing and home inspection are ways for buyers to cancel the offer to purchase if they want to. This is why sellers only allow a buyer one to two weeks to fulfill these conditions.
Offer accepted - it’s sold!
After the seller accepts the offer, it is then up to you, the buyer, to remove all the conditions by the appropriate date. Once removed, the home will be officially sold and the rest is up to the lawyers.
If we haven’t answered one of your questions, please contact us at email@example.com and we will respond to your query as soon as possible.
Did you know?
Whether we buy with or without the help of a real estate agent, the legal implications are the same and the legal warranty applies.