There are many moving parts when determining the market value of a property and contents of an offer:
Local market conditions
Current supply and demand
Recently sold properties
Current for sale properties
Physical condition
Seller’s motivations
Professional opinion
An offer is a legally binding document which contains:
1. Price - cost of the home
2. Deposit – usually about 5% of the purchase price held in a trust account. Required in the form of bank draft, certified cheque or wire transfer due within 24 hours of an accepted of offer. If you are offering in competition, it is strategic to have the deposit in hand. The deposit shows good faith and will be applied against the downpayment for the purchase of the property when the sale closes. Be advised if the seller accepts a firm offer, you are legally obligated to close and forfeit this deposit.
3. Conditions – an offer is “conditional” on matters such as a home inspection or lender’s approval of financing. The property is not sold until all the conditions have been met or waived.
4. Inclusions & Exclusions – certain fixtures, appliances or decorative items that are included or excluded in the purchase price of the property. Example: window coverings or BBQ on the balcony.
5. Closing Date – the day the property title is legally transferred and the transaction of funds are completed for keys to be released on possession
The Agreement of Purchase and Sale is the standard form used by Realtors to offer in Ontario.
WHAT IS AN OFFER DATE? - A set date where sellers decide to hold back and review offers at a certain point in time.
strategically underpricing generates a ton of traffic and interest, creating a “bidding war”.
MORE SHOWINGS usually translates to MORE OFFERS
Competing bids will usually be firm with deposit cheque in hand, over the listing price and with the seller’s ideal closing date so it is imperative to have all your ducks/cash in a row in this scenario
WHAT IS A BULLY OFFER? - An offer from a buyer to seller submitted before the offer date that the sellers have set.
AKA a “pre-emptive” offer.
This info is not to be construed as expert legal advice, tax advice, advice on zoning changes, engineering or environmental advice. Please seek independent professional advice on any of the above matters and concerns.