|The Offer to Purchase |
When you have found your new home, it's time to make an Offer to Purchase. The Offer form is standard and will help lay out the terms and conditions of your purchase. Of course, every purchase is different, and the Offer to Purchase will vary accordingly. Never assume anything when making an Offer - if something was verbally stated and you want that included - make sure it is on the form. Rob has a standard "Addendum" to attach to all Offers to Purchase that will help to close some of the "loopholes" in the standard agreement.
Basic terms include a Completion Date, deposit amount, balance of down payment amount, a list of chattels included, any exclusions, total price additional terms and conditions. A condition is a "subject to clause" meaning that the Offer is made subject to the Buyer's approval of or being approved for something or possibly the confirmation of a detail pertinent to the Offer. Conditions can be for the benefit of either the Buyer or the Seller although they are usually for the Buyer. Conditions my include mortgage approval, professional inspection or any other of a number of items that may be critical to a transaction. A deposit cheque of $1,000 to 10% of the purchase price will need to accompany your Offer.
Once the Offer to Purchase form is completed, your Realtor will need to present it to the Sellers. It is sometimes best to go and wait in your Realtor's car while the presentation is made. That way, if questions need to be answered you are available immediately. Upon presentation, the Sellers will have a few options. They can accept & sign your offer, they can reject it, or they can make changes to it and return it (make a counter-offer). If they reject your Offer you can decide to find another house or submit another Offer. If they counter your Offer you can either accept the counter-offer by initialing the changes or you could further counter their Offer by making additional changes and sending it back to the Sellers. An Offer can be countered several times before final acceptance but remember that there is no obligation for a Seller to accept or counter they can always reject without making a counter-offer. At any point either party has the right to terminate negotiations, do not change an offer without careful consideration. Once a change is made the Offer is voided and must be initialed to be valid once again.
After acceptance of the Offer your deposit cheque must be deposited to the Listing real estate Company's trust account within 2 business days of the acceptance. The deposit is "earnest money" that will hold the home until you actually move in. If the Offer to Purchase is not accepted, your cheque is returned immediately.
Once you have an accepted offer, immediately follow through on any conditions of the agreement that require action on your part. Conditions have definite deadline dates associated with them, and if you miss a date, you may have to arrange for an extension, which a Seller is not obligated to give. A missed condition date could mean losing the property.
As each condition is met, your Realtor will have you sign a "waiver". This document states that the condition has been satisfied and is no longer part of the agreement. Waivers must be delivered on time, usually prior to 9 p.m. on the final Condition Date.
A copy of the signed Offer to Purchase is sent by the listing company's office to your lawyer immediately after all conditions have been removed. The lawyer will begin the process of structuring the transaction and preparing documents to register you as owners as well as registering your mortgage on the title of your home.