Making an offer: You have decided to make an offer. Your Real Estate licensee will, of course guide you through the procedure. Knowing what to expect will make things easier and less stressful for you. An offer is usually written up on a standard form titled ?Contract of Purchase and Sale.?
When an offer is prepared, it should contain a number of standard details, as well as subject conditions that are important to you. Please be aware that once you and the seller have signed this document it becomes a legally binding contract. This means both you and the seller will be bound by the terms of the contract and both parties must make every attempt to fulfill your obligations to the contract.
Your offer should include:
·Date of offer
·Date and time your offer expires
·Full legal names and addresses of both the buyer and the
·Full legal description of the property
·Amount of the deposit you are giving (which will be held in
a trust account and will be applied to the purchase price of
·Sale price of the property
·Your desired closing, possession and adjustment dates
·A list of conditions or subjects which must be fulfilled before
the sale can occur.
·A list of items which are not attached to the building, but are
to be included in the purchase price, eg. Refrigerator, stove
Once you have your offer written up, it is time to take it to the seller?s licensee or the seller themselves. At this point the sellers have a few options:
1.Accept the offer exactly as written; the seller may sign your Contract of Purchase and Sale exactly as written, if so you have a legally binding contract and both the buyer and seller have legal obligations to fulfill.
2.The Seller may completely reject the offer. Or
3.The Seller may make a counter-offer; this simply means the Seller may change something on the original contract, and the seller is making a new offer back to you.
The contract is then presented back to you, and in return you have the same three options to consider. The counter-offer process may continue until an agreement is reached. Remember your ?Contract of Purchase and Sale has a time limit on it. If you are running out of time and you would like more time for negotiating you must change that time limit and initial the change. If no agreement can be reached between the Buyer and the Seller the offer is void.
What are the Buyer?s options? After you have written an offer and it has been accepted, then you decide you don?t want to go through with the purchase of the property; it may be possible to revoke the offer. However, many legal problems can result from this decision, at this point it would be advisable to seek professional advice on how to proceed.
Subject Clauses; Something to consider is the more subject clauses in a written offer the less attractive the offer is to the seller. Remember, that you are, in effect, asking the seller to take the property off the market during the period while you are attempting to fulfill the subjects you have set. There are some offers that are written up that have subject clause dates that are for a long period of time. In this instance your real estate licensee may advise you to write in the contract a
(what I refer to as the ?72 hour clause?) what this allows is the Seller to still consider and negotiate offers. If the Seller does successfully negotiate an offer, the seller then must give you 72 hours to remove all subject conditions you have in your contract. If this is not done within the specified time your offer is terminated and the Seller is free to continue with the other offer. (Please note: I have only used the time frame of 72 hours as an example, the time frame can be any time that the Buyer and Seller agree to)
Here are some examples of subject clauses you may want to include in the Contract:
·Arranging suitable financing
·Professional building inspection
·Sale of your present home
·Inspection of a wood burning stove
·Confirmation of house insurance
When you include subject clauses in your Contract of Purchase and Sale you are obligated to use every reasonable effort to see that the conditions are satisfied. Please remember subject clauses are not intended to be used as an escape from the contract. All subject clauses that were written into the Contract of Purchase and Sale must be removed before the sale can be finalized.
If for some reason you are not able to meet the conditions after making every reasonable effort to do so, the contract ends and there is no legal obligation to complete the purchase. Remember, that you have probably put a deposit on the property; both the Buyer and the Seller must sign a trust release form to release the deposit back to you.
After all subjects have been removed by the Buyer, you then proceed to the next step. Hopefully you have retained a Notary Public or Lawyer to do all the legal paper work for you to complete the transaction. Your Real Estate licensee will keep in contact with your legal representative to make sure all is going well. Your Real Estate Licensee will let you know when the transaction has been completed and will issue you your keys.
I would like to thank Bob Norman for next week?s topic, ?Title insurance?. Some interesting information on the topic.
Have a Real Estate question? feel free to ask, submit questions to me in writing to Brenda Banham Dawson Creek Realty Ltd.: e-mail email@example.com
fax: 250-242-3256 or mail Box 1769 Tumbler Ridge, BC V0C 2W0.