Once you’ve found a property that you want, you’ll want to make an offer. An offer represents your desire to purchase the property, and the amount that you’re willing to pay for it.
Your real estate agent can usually give you advice about the price you should offer on a resale home based on your local market conditions and recent home sales in the neighborhood.
After agreeing on a price, the seller will stop showing the property to other prospective buyers because the home is now ‘conditionally sold’ to you, and will begin to take the necessary steps to complete the transaction.
Similarly, you will also need to begin taking steps to fulfill your part of the purchase process, including any conditions you may have listed in your offer such as a home inspection or finalizing financing. These vary by location, and your realtor or builder is a good person to ask about next steps.
Typically, the offer to purchase agreement will include:
- Property Details. This is a detailed description of the residence’s address, including street name, house, lot and block number. It will also often include a list of additional items included in the sale (appliances, garage door openers window coverings, etc.).
- Transaction Details: Here a clearly-stated purchase price that both parties have deemed acceptable will appear. There will also be a description of the deposit amount here. A deposit demonstrates that you are serious about your offer, and will persuade the seller to not entertain any further offers. The Offer will also often contain the payment method (cheque, credit card, etc.), as well as mention who will hold the deposit.
- The closing date. This is the date when the property becomes yours and you are free to move in. By this time, any previous owner is expected to have removed all of their belongings, and cleared any of the conditions you may have imposed.
- A statement of transfer of insurance date and of warranties and representations. Typically, the seller is responsible for the property until the closing date, and guarantees that he/she has the legal right to sell the property. They also guarantee that all buildings and improvements do not encroach upon neighbouring lands.
- Additional terms. Here you’d place any additional modifications or improvements to the property that have been agreed upon by both seller and buyer.
- Conditions. This is where you’ll typically find a list of agreed-upon conditions of sale, the breach of which could result in a nullification of the purchase agreement. This could include a description of financing conditions, property inspection conditions, condominium documents conditions, and the sale of buyer’s home conditions.