Buyer’s Guide – The Offer
Congratulations! You’ve found a home you can see yourself in! It’s an exciting step forward in the home ownership process. That said, there is still a lot that needs to happen before it’s time to really celebrate.
You need to:
- Know the actual value of your home,
- Fill out the real estate contract, and
- Sign the contract and move into the Offer Presentation/Negotiation Phase.
I’ll go through each of these steps, so you have an idea of what’s involved and what you need to do when making an offer on your new home.
The Search Begins
Step 1: Research and Pricing Review
This is when your agent’s research skills, experience, and perspective on the market are REALLY important. They’ll need to ensure that you are clear on what home’s value actually is, based on what the market has supported recently (sales) and where the market is trending (competing listing activity, what hasn’t sold, etc.).
Are prices rising? Falling? Stable? Knowing the true value of the house will give you leverage in negotiations, especially if it is listed for more than it should be and you need to convince (or attempt to convince) the seller to move on their price.
Once your agent has done their research, they’ll review pricing with you and you can come to an educated decision about what range the actual value falls in.
Step 2: Filling in The Offer Paperwork
Making an offer on a home requires a contract. Real estate contracts are not built from scratch. They are essentially a template that the Alberta Real Estate Association manages and publishes for realtors. Your agent will work through all of the key pieces you need to add to or change in this template.
The main things here include:
- Offer Price. Based on the pricing information you looked through, where are you going to start?
- Possession Date. Based on what the seller is asking for and what is ideal for you, what do you ask for?
- Conditions. If you’re getting a mortgage, include a financing condition; if you’re getting a property inspection, include a property inspection condition; if you have a house you need to sell, you may need to include a sale of home condition; if you’re buying a condo, you’ll need a condominium document review condition… Anything else is less common, but your agent will know your needs and be able to guide you through.
- Inclusions. What appliances and items are staying with the house that aren’t “attached” to it?
- Additional terms. Anything that is outside of the typical contract terms. For example, if the seller is going to replace carpet prior to your moving in, the contract needs to outline what exactly that will look like.
Deposit amount. Essentially “good faith” money that is protected by your conditions. You can get into the nitty gritty deposit details on Legal Line’s page, The Deposit.
Step 3: Signing Off
Once everything is filled in, you will sign the paperwork and your agent will move into the offer presentation and negotiation phase. By signing the contract, you are indicating that you entirely intend to do what is in your power to make this purchase a reality.
We call that “Good Faith”. You’ll need to start arranging to get your deposit money to your agent if you haven’t already, but otherwise you wait for them to do their thing. We’ll fill you in more on this in the Negotiations blog to come!