What You Need to Know Before Making an Offer
Once we’ve helped you find a great home, it’s time to make an offer. Deciding what dollar amount to put on that piece of paper is one of the hardest decisions to make – offer too little and you stand to lose the house (particularly in a seller’s market). On the other hand, nobody wants to pay more for something than it’s worth.
Elements of an Offer
Before actually making an offer, you might like to be familiar with the 6 key components to the elements of an offer:
- Price: Depending on the local market conditions and information provided by me, your Real Estate Professional, the price you offer may be different from the seller's price.
- Deposit: Your deposit shows good faith and will be applied against the purchase of the home when the sale closes. As your Real Estate Professional, Lina can advise you on an appropriate amount.
- Terms: Includes the total price offered and the financing details. You arrange your own financing or ask to assume the seller's mortgage, especially if it has an attractive interest rate.
- Conditions: These might include "subject to home inspection", "subject to you obtaining financing", or "subject to you selling your property".
- Inclusions & Exclusions: These might include appliances and certain fixtures or decorative items, such as window coverings or mirrors. These items would remain in the house.
- Closing or Possession Date: Generally, the day the title of the property is legally transferred and the transaction of funds finalized.
Making an Offer
When it comes time to make an offer, Lina's team will provide current market information and will help you determine what market value is by showing you what comparable houses nearby are selling for, expertly assessing the condition of the house, and judging the type of competition you may face.
As your Toronto Realtor®, Lina will communicate the Offer to Purchase to the seller on your behalf.
Sometimes there may be more than one offer on a property coming in at the same time, in which case, Lina will guide you through this process.
When making an offer, it's important to be aware of what appeals to sellers. Most sellers would rather accept a Firm Offer to Purchase as opposed to a Conditional Offer to Purchase, the difference being that the former doesn't have any conditions placed on the offer such as "subject to home inspection," or "subject to financing." That is why it is always beneficial to have your financing in place with a pre-approval from a lender before submitting your offer. Of course the price of your offer and the sum of your deposit, along with a closing date that matches the Seller's needs are deciding factors as well.
What Happens Next?
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.