Before you make an offer on a home, it’s essential to understand that you’ll be entering a legally binding agreement. Read on to understand what to expect from the process— and to ensure that you protect your legal interests along the way.
The tips below are part of a series of blog posts that provide an overview of home buying essentials. If you would like to receive a comprehensive guide on buying a home, download our free 2015 Home Buyers’ Guide.
For additional advice on buying, investing or selling real estate, check out additional real estate tips on our blog.
It is important that you sit down with your real estate agent or lawyer to prepare your offer. Real estate laws vary widely from region to region, and it’s essential that you protect your legal interests and account for any specific contractual contingencies that are unique to your area and desired property. Some general conditions include:
Legal and Contractual Obligations
In Canada, an offer commits you to legal and contractual obligations as soon as the other party has accepted it. Prior to submitting an offer, ensure you are clear on the legal obligations you are undertaking, should the offer be accepted.
Prior to writing your offer, your real estate associate should provide you with information on recent area sales, local market information, and background on whether there are competitive bids. This will help you determine your initial offer as well as your target price for this specific home.
With some investigation, your real estate agent may also be able to assess the seller’s background and objectives for selling, which may assist you in crafting a competitive offer.
The details of an offer typically include:
- Your legal name and that of the vendor
- The legal civic address of the property
- The price you are offering to pay
- Inclusions (items in or around the home that you think are included in the sale should be specifically stated in your offer, such as appliances, lighting fixtures or window coverings)
- The amount of your deposit
- The dates you will take legal and physical possession of the home
- Legal “subjects” or “conditions” upon which the contract becomes final (such as satisfactory home inspection report or financing approval)
- The date the offer expires
Your REALTOR® can advise you as to whether a professional inspection should be conducted prior to or after submitting your offer. This will depend on the property age and type, and whether competitive bids are anticipated.
Ensure that any time frames indicated in your contract are realistic, particularly if your offer is still subject to securing a mortgage loan, a situation we advise against by ensuring you secure pre-approval in advance. Increases in market activity as well as increased vigilance by lenders may mean that mortgage approval requires more time.