The Major Elements of an Offer

Making an effective offer to purchase residential real estate requires careful consideration and research. There are several factors to consider, including the market conditions, the home’s condition, and the seller’s motivation. Being aware of these factors can help you obtain the best price on the home you want.

Knowing the current market trends, such as current average prices and how long homes are on the market, helps us determine a fair for the home. This knowledge can also be used to negotiate a better price, as sellers may be more willing to accept a lower offer if the market is slow. We have access to historical and area data that allows us to determine if a home is priced well.

Knowing the condition of the home can help buyers determine how much to offer for the home and what repairs may need to be done. Buyers should also consider the cost of any repairs that may be necessary, as this can help them determine a more accurate offer price. A professional home inspection is critical to understand the underlying value of a property. Read more here.

Finally, buyers should consider the seller’s motivation when making an offer. Knowing why the seller is selling can help us understand what price they are willing to accept, and they can use this information to their advantage when making an offer. Sometimes a buyer will offer incentives such as flexible moving dates or financing if they have a strong incentive to do so.

These are some of the elements of an offer to purchase:

1. Price
Depending on the local market conditions, your opinion of value and market information provided by your Royal LePage Real Estate Professional, the seller’s price may be different from the buyer’s price offered.

2. Deposit
The deposit shows the buyer’s good faith and will be applied against the purchase of the home when the sale closes. Your Royal LePage Real Estate Professional can advise you on an appropriate amount.

3. Terms
Includes the total price offered and the financing details. The buyer may arrange their own financing or ask to assume the seller’s mortgage, especially if it has an attractive interest rate.

4. Conditions
These might include “subject to home inspection”, “subject to you obtaining financing”, or “subject to you selling your property”.

5. Inclusions and Exclusions
These might include appliances and certain fixtures or decorative items, such as window coverings or mirrors.

6. Closing or Possession Date
Generally, the day the title of the property is legally transferred and the transaction of funds finalized unless otherwise specified (except in Manitoba and Quebec). Note: In British Columbia the Possession Date is legally 1 to 3 days after closing.

How to Make an Offer

Acceptance of the Offer to Purchase

Your Offer to Purchase will be presented as soon as possible. The seller may accept the offer, reject it, or submit a counter-offer. The counter-offer may be in reference to the price, the closing date, or any number of variables. The offers can go back and forth until both parties have agreed or one of you ends the negotiations.