Making an Offer to Purchase

Drawing Up Your Offer to Purchase

Your offer to purchase is a legally binding document-you should never make an offer on impulse or under pressure. Ask your lawyer, notary or real estate agent to prepare the offer on your behalf, to minimize errors and omissions. Review the offer in detail before you sign it. Ask all the questions you need to ask, so that you understand exactly what you're signing.

What's Covered in the Offer to Purchase

Your offer should clearly outline all terms and conditions of the sale, including:

• Your name, the seller's name and the legal and civic address of the property you are offering to purchase
• A clause that ensures the person selling the home actually has the authority to conduct the transaction
• Your proposed purchase price
• A list of all items included in the purchase price (e.g. appliances, carpeting, fixtures, etc.) as it compares to the original real estate listing, noting any additions or exclusions. The offer should also stipulate that there are no liens or payments due on these items.
• Full details of the financial arrangements relating to the purchase (e.g. amount of your deposit, refund of interest on deposit, amount of down payment and mortgage, etc.)
• The closing date, when you assume ownership
• If you are assuming the seller's mortgage, full details on the mortgage
• Stipulation (if you are not assuming the mortgage) that the owner must provide clear title to the property, free of all encumbrances, and that all existing mortgages must be discharged with sale proceeds on closing
• Stipulation that a certificate of location or property survey is required by the financial institution for mortgage approval and by the lawyer or notary for transfer of ownership. Ensure that these certificates reflect improvements such as decks, patios or pools. If outdated, the offer to purchase should indicate whether you or the seller will incur the expense to obtain the appropriate certificates.
• Your date of occupancy (not always the same as the closing date)
• Any other conditions attached to the sale (e.g. satisfactory home inspection, property appraisal, mortgage approval, sale of your existing home, etc.)
• Any specific obligations the seller is to fulfill before the closing date (e.g. maintenance of heating system, structural repairs, etc.)
• Time period for which the offer is in effect (anywhere from a few hours to several days, depending on the market)

Let the negotiations begin!

If you have one, your real estate agent will present your offer in writing to the seller's agent. Your seller will either accept the offer as is, reject it outright or-most likely-respond with a counter-offer detailing specific changes.

You, in turn, are free to either present your own counter-offer or withdraw your original offer entirely. This process continues until either an agreement is reached, or one of the parties withdraws from the negotiations.

You and the seller will likely bargain on price, but keep in mind that nearly everything else is negotiable-from the appliances to the closing date. Your real estate agent can guide you through the negotiation process, offering creative ideas to help get you into the home you want.

It is also customary to make a deposit with the offer as evidence of good faith. Learn more about making your deposit.