What’s in an Offer?

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Or...Everything You Wanted to Know About Making an Offer But Were Afraid to Ask!

1. Offering Price

The price you offer will depend on the market conditions, how long a property has been on the market, the seller’s motivation, your motivation and how many other offers are being presented at the same time as yours! In Buyers’ Markets the price offered and accepted is generally lower than the asking price. In Seller’s Markets the offering price may be more than the listed price. Especially in multiple offer scenarios.

2. Deposit

The deposit is the “money down” like when you buy a car. It shows good faith on the buyer's part and cements the deal. It forms part of the purchase price of the home when the sale closes. If you buy a home for $500,000 and your deposit is $20,000, your final purchase price is still $500,000. In Toronto the deposit is approximately 5% of the offering price and is usually paid by bank draft to the listing broker by the buyer “upon acceptance” of his/her offer.

3. Terms

Includes the total price the buyer is offering as well as the financing details. The buyer may be arranging his/her own financing.

4. Conditions

Conditions typically relate to home inspections and financing. Many homes are sold “conditional on home inspection" or "conditional on the buyer obtaining satisfactory financing". If you are purchasing a condo, your offer will likely also be “conditional on obtaining a satisfactory status certificate. This is a document which provides a snapshot of the financial status of the condominium corporation and the unit being purchased.

5. Inclusions and Exclusions

Inclusions are generally personal possessions that are included in the sale of the property such as appliances, window coverings, light fixtures, etc. These may be offered by a seller when listing the property or they may be negotiated by the buyer at the time of the offer. Exclusions are generally personal possessions that are not included with the sale of the property. Often they are items that the seller has an emotional attachment to.

6. Completion Date

The Completion Date is the day the title of the property is transferred from the seller to the buyer and funds are received by the seller, unless otherwise specified. Traditionally this date has been called the Closing or Possession Date— terms that are still commonly used.