When you have found the property you wish to buy it
is time to put an offer in writing on a Contract of
Purchase and Sale.
In today’s market, if a property is priced right,
then it generally is sold quickly and very close to
the asking price. Low-ball offers are generally not
entertained by Sellers in today’s hot market. Salt
Spring Island statistics show that the average selling
price is within 5% of the asking price.
Conditional Offers
When a purchaser makes an offer on a property they will sometimes
have specific conditions they want met as part of the offer.
Conditions can be something that the purchaser wants done
before they take possesion of the property like cleaning the
carpets and in other cases they are subject conditions or
subjects. These are actions that must be taken by a specified
date to the satisfaction of whoever put the subject into the
contract.
As your realtor, it would be my responsibility to advise
you with regard to any subjects that should be placed on your
contract, such as financing, property inspections, fireplace
inspections, septic tank inspections, etc. These inspections
are paid for by you, the Buyer, but well worth the cost in
order to avoid discovering costly defects after the closing
date.
The most common subject is financing. The buyer puts a subject
to financing by a specified date clause in the contract. That
way the buyer can shop for a mortgage and when they get approaval
they will remove the subject as long as it is before the specified
date. If they can't get a mortgage then they can refuse to
remove the subject and the contract is null and void. If the
subject costs money such as an inspection, usually the person
who added the clause pays the costs and this is stated in
the contract.
Professional realtors will not write "Whimsey"
clauses into a contract. These are subjects that are just
an excuse to change your mind. We write subjects that are
for the protection of the clients we are representing. This
is not a game.
Deposits are required with Contracts of Purchase
and Sale, generally a portion upon acceptance
of the offer by the Seller, then a further amount
upon removal of subjects. The amount of the deposit
is negotiable but should be high enough to show
the intent to purchase is valid.
There are three dates for the completion of the
contract: Completion (the date papers are filed
and money and title change hands); Adjustments
(the date that such expenses as property taxes,
water parcel taxes, etc, are passed to the responsibility
of the Buyer); and Possession (the date the Buyer
actually takes occupation of the property)..
Once all the subjects have been removed, it is now a firm
and binding contract.
Offers, counter offers and counter counter offers etc.
When a buyer writes an offer, the seller must agree to all
the terms of the offer by the date and time specified in the
contract. If they aggree to the terms as originally written,
they can just sign their acceptance before the specified date
for acceptance and with the exception of the subjects, it
is a firm contract.
If they want to change anything on the offer they are making
a "counter offer". The other party is not obligated
to accept the changes. They are no longer bound by any of
the original terms. They may however change some of the terms
of the counter offer and so the negotiations goes. When both
parties agree to the terms, then they have a firm contract
with the exception of any subject conditions.
MAKING
AN OFFER