Things You Must Know When Making The First Offer
(1) Who my agent is working for ?
Depending on each local market, the agent you are working with might be working for the Seller, instead of yourself, the Buyer.
Before making the first offer, make sure to ask your agent in writing whether he/she is working for you or the Seller.
(2) How much should I offer ?
There is no definite answer. It will depend a lot on the market.
You need to consult your agent, and have him/her show you the comparable houses that are sold recently.
If a good number of similar houses were sold over the asking prices, you know the market is very strong.
If a good number of houses were sold substantially less than the asking prices, you know the market is weak.
(3) How much deposit should I give ?
Again, there is no fixed amount. However, 5 to 6% of the price is common practice in many North American cities.
(4) When should I make the offer ?
Keep in mind, if you see a house you like, chances are, other buyers who are looking in the same neighborhood, for a house around the same price range, they likely would like that house, too. For that reason, you should make the offer right away.
(5) Inspection by a professional home inspector a must.
Under normal circumstances, the offer (or Agreement of Purchase and Sale) should include a Condition Upon Satisfaction Home Inspection By A Professional Home Inspector.
If the market is very strong, and you are bidding with other buyer(s), making an offer with any condition on it might give you no chance of getting that house. This is a risk that a buyer need to consider..
(6) Condition on finance
Usually, after you have been given a written or verbal commitment from a lender of mortgage, you might still be advised to use the Condition on Finance on the offer.
Again, if you are NOT bidding with any other buyer(s), the seller is likely accepting this condition.
If you are bidding with other buyer(s), and you have a written commitment from the lender, without this condition should be safe enough.
(7) Closing date (Completion date)
This is the date you become the new owner of the property.
By that time, your deposit money, the rest of the down payment, together with the borrowed mortgage, are already given to the Seller.
At that time, your attorney also has registered your name with the Title Office of your local government.
(8) Requisition date (Title search date)
Usually, it is the date about 10 business days before the Closing date.
The reason is, when your attorney check the title of the property, and if there are problems on it, there is enough time (10 business days) to work with the seller’s attorney to resolve the problem(s).
(9) Title insurance
It is an insurance policy that gives peace of mind to a buyer of a property against any possible problems connected to the title of that property.
Your attorney usually suggests you to buy it.
(10) Chattels
These are the household items that might be included on the purchase price of the house: fridge, stove, dishwasher, washer, dryer, air-conditioning, central vacuum, garage door opener, drapes, window coverings, light fixtures, etc.
(11) Legal Description
It is the legal way of naming the property. Municipal address is the naming the property by the post office, and the daily use.
(12) Rental Items
Certain things in a house might not belong to the owner, but it appears to be. The best example is the hot water tank in the house. In many cities, it belongs to the gas or electric heating supplier, as a rental item to the owner.
(13) Irrevocable Date and Time
It is the date and time that either the Buyer or the Seller committing himself/herself on an offer with all the details, for the other party to accept or counter-offer.
(14) Confirmation of Acceptance
It is the date and time that either the Buyer or the Seller accepting the other party’s last offer, without making any changes to it
(15) Acknowledgement Signature and Date
After a Buyer or Seller has accepted the other party’s last offer, a deal has been made (the Agreement of Purchase and Sale has been reached), both parties need to sign and date on that Agreement acknowledging that they both receive a copy of that Agreement..