The Offer to Purchase Document

1.Call the owner and visit the property

Be sure to ask the owner lots of questions and thoroughly review the property.  If you are interested, discuss price, closing date, and conditions with the owner.

Click here to download a Home Hunting Worksheet »»»»

ByTheOwner recommends that you always have your real estate lawyer review everything before you sign. So the first step in making an offer is consulting your real estate lawyer. Once you've decided that you would like to make an offer on the property, you will need to get the following information from the seller: seller's name(s), address of the property, closing date, conditions, all included and excluded chattels?

All questions regarding the offer to purchase should be forwarded to your lawyer.

2. When a seller is presented with an offer, three possibilities are available

• 1. Accept the offer.

• 2. Reject the offer.

• 3. Make a counter-offer.

3. Offer to Purchase

• Contains the legal names of the purchaser and seller.
• Contains the legal address of the property.
• Contains the amount of the deposit and the amount to be paid on closing – paid in trust to the seller’s lawyer.
• Lists what is included (chattels) – e.g. fridge, stove, washer and dryer, fixtures.
• Lists what is excluded – e.g. satellite dish, wood stove, ...
• Lists all rental items – e.g. hot water heater.
• Includes an irrevocability date – this is the date and exact time that the offer will expire if not accepted.
• Includes a completion date – this is the date that the contract will be filled.
• Includes conditions.

4. Some popular conditions are:

Conditional on financing – This allows the buyer time to arrange a mortgage or collect the money to be paid. One week is usually ideal for a buyer to find a mortgage. If they have not received approval for the money within the stated time period, then the contract is void and your home is back on the market. If the buyer receives financing before the week ends, then the buyer waives this clause and the contract is still valid. The buyer gives a written waiver to his lawyer who then sends it to the seller’s lawyer.

Conditional on home inspection – This allows the buyer time to have a home inspector come and evaluate the home. One week is usually ideal for a buyer to find an inspector and to have a home inspected. It is important to note that a home never “fails” a home inspection. A home inspection simply involves a building expert coming in to inspect the house to give the buyer his opinion of the building. The inspector will advise the buyer of any problem or potential problem uncovered during the inspection. The buyer can then decide to waive the home inspection clause and proceed with the purchase of the home or to back out of the contract based on the home inspector’s assessment. The decision to waive the clause is up to the buyer.

For example – the home may have serious damage and the home inspector may point out many problems with the home. The buyer has the option of proceeding or backing out of the purchase. Essentially, clauses like financing and home inspection are ways for buyers to cancel the offer to purchase if they want to. This is why sellers only allow buyers 1 to 2 weeks to fulfill these conditions. If you allow a buyer 2 months to arrange financing, then he can come back to you in two months and say “we didn’t get approved”. The contract then becomes invalid and your home goes back on the market. Again, it is important to educate yourself and read our guide.

5. Offer accepted - Conditions waived - It's Sold!!!

After the seller accepts the offer, it is then up to the buyer to waive all the conditions by the appropriate date. At this point, the contract is a valid document and the rest is up to the lawyers.

Congratulations!

Ask a question

If you didn't find an answer to one of your questions, write us at info@ByTheOwner.com and we will answer you as soon as possible.