Negotiating the Offer
Negotiating the Offer
There are 8 basic elements of an offer:
1) Parties & Property Address & Legal Description
A deposit shows the buyers good faith and will be applied against the purchase of the home when the sale closes. Deposits are usually no more than 1-3% of the purchase price. Deposits are then cashed upon acceptance of the offer by both parties, and held in a Real Estate Brokers trust account until closing.
4) Standard Ontario Preprinted Terms
5) Chattels – Inclusions and Exclusions
Items within the home that will be included in the purchase price such as appliances, fixtures or decorations (i.e. drapes, mirrors etc.) are referred to as chattels
Closing or Possession Date
The date the title of the property is legally transferred and the transition of funds is finalized…the moving date!
6) Title Search Date
The time given to the buyer’s lawyer to search title of the property and to ask for documentation from the Sellers lawyer is the Title Search date. This is usually 10 days to 14 days prior to possession date.
7) Schedule A – Custom Terms and Conditions
This is the “meat” of the offer…this is where the offer is customized to meet the unique requirements of your agreement and sale.
Items to consider in the offer:
- What are the conditions? Financing, property inspection, home insurance, well inspections, septic inspection, WETT inspection of fireplace, reviewing leases, reviewing income statements, sale of buyers home, Lawyers review of documents/status certificate, etc
- Timing of conditions
- Size of Deposit (1% to 3% locally)
- Do you have a survey? A survey is not a requirement for closing a transaction, but it’s nice to have to give to buyer
- What fixtures are included? What Chattels are included? What are you going to hold for negotiations? What do you want excluded?
- Selecting a moving date
- Warranties, cleaning, other terms
- If you are selling a condo, the sale will likely be conditional on the Buyers’ lawyers review of the condo Status Certificate
The Negotiation Begins
- The Buyers representative will present the offer directly or indirectly to you for your consideration.
- You may change the price, closing date or the terms and conditions. This is called a counter offer or sign back.
- The negotiation continues until both parties agree on all terms and conditions or until one party walks away and the offer expires.
When the seller receives more than one offer, they have several choices:
- Work with the best offer
- Send back some, or all offers and ask them to improve their offers
- Accept one offer
- Work with one, while holding the others
No disclosures are made between parties, so no one knows, except the seller and their Realtor®, what the other offers contain.
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