Purchasing A Home


What do I do when I've found a home I'm interested in?

Once you have found the home that suits you best, it's time to make an offer.

Deciding what to offer is one of the most difficult decisions to make. Offer too little and you stand a chance of losing the house. On the other hand, nobody wants to pay more for something than it's worth.

Your Realtor can help you enormously by showing you what comparable houses are selling for, helping you assess the condition of the house, and judging the type of competition you may face. Once you have decided on the price you are prepared to offer, the Realtor will draft the offer and explain the details to you.

Your Realtor will communicate the offer, sometimes known as an Offer to Purchase (a legal document specifying the offers terms and conditions) to the seller, or the seller's representative, on your behalf.

The offer can be firm or conditional:

Firm Offer to Purchase: usually preferable to the seller, because it means that you are prepared to purchase the home without any conditions. If the offer is accepted, the home is yours.

Conditional Offer to Purchase: means that you have placed one or more conditions on the purchase, such as subject to home inspection, subject to financing, or subject to the sale of the buyer's existing home. The home is not sold until all the conditions have been met.


Making an Offer

What are the main elements of an offer?

Price
The price you offer reflects your opinion of the value of the house and is determined by the condition of the property and local market factors. You can make any offer you like. It does not have to be the same as the seller's asking price.

Deposit
The deposit shows your good faith and will be applied against the purchase of the home when the sale closes. Your Realtor can advise you on an appropriate amount.

Terms
Include the total price offered and the financing details. You may arrange your own financing or ask to assume the seller's mortgage, especially if it has an attractive interest rate.

Conditions
Conditions are items that must be completed or fulfilled prior to an offer being concluded. These can include subject to home inspection, subject to you obtaining financing, or subject to you selling your existing property.

Inclusions and exclusions
Your offer may be contingent on certain items being either included or excluded in the sale. These might include appliances, fixtures, and decorative items, such as window coverings or mirrors.

Closing or possession date
The closing date is generally the day the title of the property is legally transferred and the transaction of funds finalized, unless otherwise specified (except in Manitoba and Quebec). In British Columbia the possession date is legally one to three days after closing.

Negotiating

What happens to my offer to purchase after it is drafted?
Your offer to purchase will be presented to the seller as soon as possible after it is drafted. The seller can accept your offer, reject your offer, or make a counter offer.

Acceptance
An accepted offer means the seller has agreed to all the terms and conditions exactly as set forth in your offer to purchase.

Rejection
A rejected offer means the seller did not agree with any of the terms and conditions set forth in your offer to purchase.

Counter offer
A counter offer means the seller agrees with some of the terms and conditions of your offer, but not all of them. The seller then makes a counter offer. The counter offer may change the price, the closing date, or add or delete conditions.

Once you have received a counter offer you have two choices. You can accept the new terms and conditions or reject them. If you reject them, you can choose to start the whole process over again.


Inspections & Appraisals

Do I need a home inspection?
Buying a home is probably the biggest single investment you will make. A home inspection prior to making an offer will protect you and your investment.

A qualified home inspector will give your house a thorough examination, checking the heating and cooling system, plumbing and electrical systems, the roof, attic, walls, ceilings, floors, windows, doors, foundation, basement, and visible structures of the home.

The inspector will point out the need for major repairs, identify areas that may need attention in the near future, and explain what maintenance will be necessary to keep the house in good shape. But, it is not all negative. Most inspectors are more than happy to tell you about the home's good qualities as well.

Home inspections are relatively inexpensive considering the size of the investment that you are about to make. Many people consider this a small price to pay for peace of mind.

Your Realtor can provide you with a list of reputable, qualified home inspectors in your area.

What is an appraisal?
An appraisal is a report containing an estimate of the value of the property. Appraisals are conducted for the purpose of mortgage lending by certified appraisers. The appraisal should not be confused with the home inspection or the market analysis.