Estimated reading time: 1 minute, 35 seconds.
After finding your dream home, you’ll need to act quickly to put in an offer before anyone else does. Here’s a briefing on the step-by-step of making an Offer to Purchase (a Promise to Purchase). An Offer to Purchase is legally binding, so you need to be very cautious about the terms and conditions submitted.
The items on an offer include:
- Your personal identification
Your legal name, the name of the vendor and the legal civic address of the property.
- Purchase price
The price you’re offering to pay.
Any items in or around the home that you would want to have included in the sale should be specifically stated in your offer. Some examples might be appliances, furniture or garage spaces.
- Your down-payment amount
- Your deposit amount
A deposit is not absolutely necessary but is often given as a sign of good faith, especially when there are multiple offers on a unit.
- The closing day
The closing day is the date you take possession of the home. It’s usually 30 – 60 days after the date of agreement. But, it can be 90 days, or even longer.
- Date the offer expires
If the vendor does not accept the offer by this date, it becomes null and void. It’s usually 24 hours-36 hours after signing.
- Other conditions
Other conditions may include a satisfactory home inspection report, a property appraisal, and lender approval of mortgage financing. This means that the contract will become final only when the conditions are met.
What happens after you’ve made you’re offer? There are two possible responses.
- The vendor accepts your offer and you move on to the next steps of the purchase process.
- The vendor counters your offer, asking for a higher price or different terms. In this case, you can negotiate and agree on terms that are mutually satisfactory, or you can reject the counter offer and break the deal. In this case, any deposit that has been paid is returned to you in full.