Making An Offer
The “Agreement of Purchase & Sale”
When you find the home you want to make an Offer on, THE MILLS TEAM will provide you with information and advice, and draft your Offer. There are five major elements that we will discuss:
- Price: The price you offer is dependent on current market conditions, your opinion of value based on other similar properties that you have seen and market information that we have provided you with.
- Deposit: The deposit (the cash you submit with your offer) shows your good faith and is applied toward the total purchase price. We can advise you on the amount that is appropriate for your particular transaction.
- Terms: Includes the offering price and the financing details. If the seller’s mortgage is assumable at an attractive interest rate, you may include assuming the existing mortgage in your terms.
- Conditions: Any detail(s) that must be satisfied before the sale becomes a binding agreement. This could include such items as being subject to a satisfactory home inspection, obtaining financing, or the selling of your current home before purchasing your new home etc.
- Closing or Completion Date: This is the date that the title of the property is legally transferred to you and funds change hands (must be a non-statutory holiday, Monday thru Friday). The goal is to select a date that is convenient for both you and the seller(s).
The Two Types of Offers
“Firm” Offer to Purchase
In this case you are offering to purchase the home without any conditions. If the seller accepts this Offer, the contract becomes binding. This type of Offer is usually considered to be a stronger Offer. The seller knows the home has been sold without waiting for conditions to be met. Making a firm Offer depends on the climate of the market, your financing position and the state of the home you are purchasing.
“Conditional” Offer to Purchase
In this case you are offering to purchase the home but the Offer is subject to conditions such as having a Home Inspection on the property, or arranging financing for the purchase of the property. Until the conditions have been met within the outlined time frame, there is no firm and binding agreement. Once the conditions have been satisfied, the contract becomes binding.
Once the offer has been drafted and signed, THE MILLS TEAM will immediately contact the seller’s agent to officially register the Offer. Once the Offer has been presented to the seller, it may be accepted, rejected, or a counter-offer may be made to you by the seller. The counter-offer may make changes to the price, the conditions, the closing date or any number of other variables. The Offer may go back and forth until an agreement is reached or either you or the seller ends the negotiation.