So you’ve found the place for you, yay! Now the real fun begins!
This is the main document which stipulates what you are buying, for how much, under what conditions, what is included and who is representing you in this transaction - this is The Offer. This offer is registered with the listing brokerage either on offer day (if such exists) or any day when you decide to make an offer on a property. A seller can decide to put off looking at offers until a particular date, usually a week after listing, which means that all offers will need to be registered with the listing brokerage on that offer day (except bully offers – read about them here)
This simply means that you are declaring that you are putting in an offer on a particular property. Yours can be the only registered offer or there may be many agents registering offers on a property (this is called a bidding war) if it is offer day/night. As a buyer, you have the right to know how many offers are registered but none of the details of any offers may be disclosed to anyone putting in an offer. The only party who can look at all the offers and the details is the seller.
Presenting an offer means presenting it to the seller. Your Realtor either does this in person or through fax by sending it to the listing brokerage. We like to present our offers in person because this gives us a chance to bring the best that our buyers have to offer to the seller’s attention. Remember, it is not always the highest offer than wins, a lot of the time it is about the terms of the offer and how it is presented. Is the seller confident in the buyers behind the offer? A good Realtor can really bring the best qualities of his buyers to the offer table.
Once the seller has the offer(s) in their hands they can do a few things
This is the most heart wrenching time for buyers since everything is still very much up in the air and you have no idea if your offer is $100 or $70,000 away from the other offers on the table (in bidding wars). The most important thing to keep in this situation is your cool and not get all heated up about how things are going. It’s also a good idea to be close by where the offer is being presented (seller’s home, listing agent’s office) so you can easily speak with your Realtor and re-initial the document during this stressful time.
Once your offer is accepted, you are now responsible for providing a deposit in the form of a certified cheque or bank draft. This can be done either upon acceptance of the offer (which means that you have to have your certified cheque ready right there and then) or within 24 hours of acceptance of the offer. This is not your down payment mind you, this is just the deposit that you are putting on the property.
Irrevocability. A time until which the seller has to get back to the buyer with any changes. If the seller lets the irrevocable time expire, the offer is dead and the buyer can put in an offer on another property. Similarly during a sign back the seller indicates an irrevocable time until which a buyer has a chance to respond.
Conditions. Stipulations in the offer that must be fulfilled or waived by a certain time. Conditions are usually very common and include everything from financing clauses to home inspections. The conditions can either be waived or fulfilled depending on the circumstances. Once the conditions have been dealt with the offer becomes firm.
Firm offer. Either an offer that has all the condition fulfilled or an offer with no conditions which comes into effect as soon as both parties sign.