The process of presenting an Offer to Purchase
The process of making an offer, receiving a counteroffer and then revising it again is not uncommon. However, it can seem like a bit of a roller coaster ride—exciting but tense too. Still, it’s all part of making the deal work best for the individuals and circumstances involved.
Your offer must be made with a deposit to the vendor or the vendor’s agent. This
deposit will go toward the purchase price on the closing date. Deposits are usually no more than 10% of the purchase price. But a larger deposit may tell the vendor that you’re very serious about your offer.
A deposit on an unaccepted offer will be returned. If you cancel an accepted offer, you may lose your deposit.
Your real estate representative helps you prepare an Offer to Purchase. This offer should include all the details of the sale.
You may want your lawyer to look at the offer BEFORE you show it to the vendor, because it is a legally binding document.
Your real estate representative or lawyer will then present the offer to the vendor, who will accept, reject or make a counteroffer.
The vendor accepts your offer.
The vendor may make a counter- offer, asking a higher price.
The deal is concluded.
You sign the offer back to the vendor with a higher price than your original offer, but lower than the vendor’s counteroffer.
The vendor may make a counteroffer, asking a higher price. If a counteroffer is returned to you at a higher price, ensure that you know exactly how much you can afford before you start negotiating. You don’t want to get caught up in the heat of the moment with costs you can’t afford.
The vendor accepts this counteroffer.
You reject the counteroffer of a higher price and decide not to make a subsequent counteroffer.
The deal is concluded.
The sale doesn’t go through and your deposit is returned.
STEP 7 • PREPARING AN OFFER
Tips on making an offer
You may want to submit a conditional offer, a standard contract with your own conditions. However, a clean offer with no conditions attached is often more attractive to the vendor because it is most straightforward.
Often the vendor will make changes and return your offer. This is called a counteroffer. You may accept, reject or even revise a counteroffer. Offers and counteroffers often make changes to closing dates or chattel— but most often they hinge on money.
It’s best to know what your absolute upper limit is before you start nego- tiating or you may get caught up in the action and offer more than you really can afford.
Buying a condominium
Resale condominiums You may wish to hire an independent inspector to check the condominium’s structure and its major systems or ask to see the building’s own recent inspection audit and make your offer conditional on a satisfactory report.
Ensure that the condominium is well maintained and managed and that security systems are effective. Tour the common areas and grounds and speak with other residents.
Consider the age of the building, what improvements and repairs have been done and when. Make sure to check that there is adequate money in the condominium’s reserve fund. In addition, you may wish to review the con- dominium’s declaration and bylaws.
Make your offer conditional on receiving an estoppel certificate. (Does not apply in Quebec.) There may be a fee for this document but it will provide information including the develop- ment’s finances and insurance, and give you an overview of the condominium corporation’s affairs. (In Quebec, the