You’ve found the perfect home, you have your deposit, and you want to make an offer. Before you do, there are a few things you and your real estate licensee should do to ensure it is really is the perfect home for you:
Review the Real Property Report: a Real Property Report (RPR) is a legal document prepared by an Alberta Land Surveyor that shows property boundaries and improvements (structures) relative to boundaries. You want to ensure an RPR has evidence of municipal compliance, which confirms property improvements comply with municipal Bylaws and Regulations. If there is no RPR available, discuss your options with your real estate professional and your lawyer.
Search the address: Search the address of the property or, in the case of a condominium, the name of the condominium building/complex. An internet search can uncover quite a bit.
Conduct a Historical listing search: A historical listing search will show you the listing history of the property.
Look into warranties and representations: Alberta has an online public registry of homes covered by a new home warranty.
Your real estate agent will provide you with information to help you make an informed decision on what to offer. That information will include looking at comparables (recent sales of similar properties in the same neighbourhood), and discussing your preferences. It’s your choice what to offer.
A deposit can be a sign of how serious you are about the purchase. You need to have the deposit ready at the time of your offer.
A term is a detail in the purchase contract that the buyer and seller agree to. Terms include:
Possession date: The date on which you will take possession of the property.
Inclusions and exclusions: Inclusions are items you want included in your purchase, typically appliances, security systems, etc., and exclusions are items excluded from the purchase, for example if the sellers are taking the curtain rods or TV wall mount with them. Inclusions and exclusions can be negotiated between the parties.
Attached goods are items you cannot remove from the property without causing damage.
Unattached goods are movable items. In the absence of specific inclusions or exclusions in the offer to purchase, attached goods are typically included in a sale while unattached goods are not.
Time for acceptance/expiry of offer: You want to include an expiry date/time that:
Pre-possession inspection: A pre-possession inspection term gives you the opportunity to view the property, with your real estate professional, prior to possession. Such an inspection can help you confirm the property is in substantially the same condition as it was when you viewed it and made your offer.
Buyers often place conditions in their Offers to Purchase to protect their interests. When you write a conditional Offer to Purchase, it means you want to buy the property but before making it a firm sale, you want the ability and time to review or confirm information. Some common conditions include home inspection, financing, and a review of condominium documents (if buying a condominium).
The conditions you may want to include will differ depending on the type of property, for example:
All conditions need to have an expiry date. Make sure the expiry dates you include will provide you with enough time to satisfy the conditions. If you don’t waive your conditions in writing by their expiry date, the contract ends, and you and the seller have no further obligations to each other. If you are ready to waive your conditions, your real estate professional will provide you with the required waiver, and the purchase contract becomes final and binding.
There will likely be some negotiation between you and the seller after you submit an Offer to Purchase. Sellers can outright accept or reject your offer, make a counter offer, or ignore your offer completely.
A multiple offer situation is when multiple buyers submit an Offer to Purchase on the same property, at the same time. It’s the seller who determines the process, including whether they want to disclose the multiple offer situation to potential buyers. If the seller discloses a multiple offer situation, your real estate agent will:
When you make an offer to purchase a property you need to decide whether to include a date and time when your offer will expire. Expired offers are automatically withdrawn, whether the other party has considered it or not.
Your real estate agent can tell you advantages and disadvantages of the inclusion of an expiry date, but it is up to you to make a decision about how you wish to proceed.
If you do include an expiry date, and you’re worried that the other party may not have enough time to fully consider your offer, ask your real estate representative to advise the other party that the expiry date is extendable.
Your real estate professional will help you decide the best date and time for an expiry.
If you don’t want to include an expiry date, ask your real estate professional about a follow-up system that would allow the offer and counter to be formally withdrawn.
These same advantages and disadvantages also apply to offers/counter offers to lease.
Sellers often accept conditional offers that set out the terms of the proposed sale (purchase price, the closing date, etc.), and any conditions that must be met within a specified period of time (financing, home inspection, etc). Accepted conditional offers do not always become binding contracts as the buyer may be unable to satisfy conditions.
When a seller accepts a conditional offer, they have to decide if they want to disclose the existence of the accepted conditional offer to other potential buyers. Buyers have to decide if they wish to view properties even though they may not be able to determine if the seller has accepted a conditional offer.
There are implications as a buyer. Discuss your options with your real estate professional before proceeding.