The ins and outs of the offer process
Making the Offer
Once you have seriously identified a prospect for a house, the next step is to put in an offer to purchase it. This can put you through the emotional wringer, as up until now, your search has been in the realm of theory – now you’re about to put forth a deposit in good faith and sign a legal document that will eventually translate into homeownership for you!
Jamie will show you what comparable houses are selling for, and will gauge the type of competition you may face. For example, some sellers ‘hold back’ offers till a specific date, which is a strategy designed to collect all offers at the same time and create a feeling of urgency among buyers, who must submit their offers by the stipulated day and time or risk losing the house. Jamie will let you know how many offers you face in a competitive situation. Or, the house may have been on the market for awhile, offers are welcomed anytime, and the sellers might be eager to see what you bring to the table anytime.
No hand shake by IndieRonin
Once you have decided on the price you are prepared to offer, Jamie will draft the legal document and communicate it to the seller’s representative on your behalf. The offer will specify the terms and conditions of your offer to purchase the home. We will go over the document very carefully together to make sure all the terms are satisfactory to you.
The Major Elements of an Offer
Offers to purchase real property are wordy documents, but they contain some simple key elements that are of great importance. Here are the key elements of an offer that you need to be aware of:
- Sale price: Depending on what price comparable homes for sale have been able to command, competition from other buyers, and your own bottom line, the price you offer may be different from the original asking price.
- Deposit: The deposit shows your good faith and will be applied against the down payment when the sale closes. Usually it is 5% of the purchase price. It is crucial to have this amount accessible within 24 hours of making your offer, so if your funds are tied up, you may wish to look into a line of credit from which a bank draft can be issued.
- Conditions: Qualifiers in your offer that must be satisfied before a deal is struck. These might include ‘subject to home inspection’, ‘subject to the buyer obtaining financing’ or ‘subject to additional deposits’, to name a few examples.
- Inclusions & Exclusions: What will be left at the house for you and what won’t be. Generally, fixtures such as major appliances, light fixtures and faucets are left behind, while chattels (personal possessions/decorative items belonging to the seller) are not, unless otherwise stipulated in the offer.
- Title Search Date: This is the last date your lawyer has before the property closes, to search the title and make sure there are no problems or issues with the legal ownership of the property.
- Closing (Possession Date): This is the day the title to the property is legally transferred and the transaction of funds finalized.