Purchasing a property is a big adventure where every decision can change the course of your life. And filling out the offer to purchase form often marks the starting point of this process. Whether it’s your first time or not, it’s important to have a good understanding of how to prepare and submit this document to maximize your chances of success with the seller. This guide is broken down into 10 key steps to help you prepare a clear offer.
1. Download the offer to purchase form
The offer to purchase form is the basis of any real estate transaction. This official document confirms a prospective buyer’s intention to acquire a piece of real estate and outlines all of the proposed conditions.
You can download it directly from DuProprio.com in the Offer to purchase and other legal documents section. Then, simply fill out and sign it and send it to the seller as soon as possible.
2. Make an offer
There’s more to the offer to purchase than just the dollar amount.
”The amount of the offer is a core part of any negotiation, of course, but there are a number of other details that play an important role too,” explains Elena Maria Bejan, a notary with DuProprio. Pay attention to all of these elements to ensure your offer is complete:
The selling price: This is the basis of the offer. It’s always wise to research the current state of the real estate market to estimate the market value of a property and determine a competitive bid.
Date of the notarial deed: This the day when both parties visit the notary to sign the deed of sale and transfer the ownership of the property.
Date of possession: This is the day when the buyer takes physical possession of the property. Both parties must agree on this date, as it marks the moment when the property is officially transferred and several obligations come into effect.
Inclusions and exclusions: Are the appliances, light fixtures and curtains included in the sale? Any items that are to be included or excluded in the transaction must be indicated on the form to prevent any ambiguity. This is also an area where the parties may need to negotiate.
But that’s not all! There are also several conditions designed to protect the buyer during the process:
Conditional on financing: The buyer commits to obtaining a mortgage and presenting a confirmation of approval without conditions, within a standard period of 14 consecutive days. If the financing is declined, the offer can be cancelled. For cash purchases, the buyer must provide proof that the funds are available, within a standard period of 10 successive days.
Conditional on inspection: The buyer may make their offer conditional on an inspection of the property. If the inspection doesn’t reveal any major defects, the condition is met. If the inspection reveals any significant problems, this may lead to renegotiations or, in some cases, cancellation of the offer.
Conditional on the review of divided or undivided co-ownership documents: It’s important to ensure that the buyer has thoroughly reviewed the bylaws of the divided or undivided co-ownership. These include the declaration of co-ownership (divided) or indivision agreement, where applicable, internal bylaws and any other document requested by the buyer.
Conditional on the sale of the buyer’s property: Sometimes, the interested buyer needs to sell their current property before they can buy a new one. In this situation, the offer may be conditional on the sale of their property within a certain time frame.
These conditions contribute to making an offer to purchase that is thorough and carefully considered, while taking the needs and expectations of both parties into account. The goal is to end up with a transaction that works for everyone.
3. Complete the offer to purchase document
Once the contents of the offer have been determined, it’s time to complete the form. Every detail counts: It’s important to make sure all of the information is correct before it’s submitted, because this document officially outlines the terms of the agreement. The template provided by DuProprio is designed to be clear, intuitive and easy to complete.
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4. Submit the offer to purchase to the seller
Once the offer is ready, it’s time to submit it to the seller. It can be sent by email, hand-delivered or even by registered mail.
It’s customary to indicate a response window (generally within 24 to 72 hours) to set expectations so neither party is left hanging for too long. Once the offer is received, official negotiations can begin.
5. Receive the seller’s response
The seller must respond to the offer within the time frame indicated, or else the offer will expire. This is why it’s so important to make sure the response window is clearly communicated. If the offer to purchase is accepted, the transaction may proceed.
If the seller wishes to make a counter offer, they must indicate a new response window. This is a fair practice, because it lets the buyer know how long they have to think it over.
This is the stage where negotiations may occur. Elements up for negotiation may include the price, important dates or suspensive conditions (for example, obtaining financing or a satisfactory inspection), and continue until both parties come to an agreement.
Good to know: Suspensive conditions are clauses that must be fulfilled before the sale can become official.
6. Sign the acknowledgement of receipt
Once the offer is accepted, the buyer must sign an acknowledgement of receipt. This document confirms that the offer has been received and accepted by the seller, and an agreement has been reached. It marks the end of the negotiation process and transition to the next steps in the transaction.
7. Fulfill the conditions laid out in the offer to purchase
Now it’s time to start fulfilling the suspensive conditions. The only condition that is mandatory is the financing one. If, for whatever reason, the buyer doesn’t provide proof that they have obtained financing to the seller within the agreed upon deadline, the offer of purchase may be cancelled.
If an inspection of the property is a condition of the sale and major problems are detected, the parties may renegotiate. This may involve a price adjustment, repairs or other considerations. If the parties fail to reach a compromise, the future owners may withdraw from the transaction without penalty.
Does the buyer own an existing property? It’s common to include a sale of current property condition. As long as this condition hasn’t been met, the seller may continue to receive and consider other offers. They may, in fact, accept a second offer to purchase even though they’ve already accepted the first. This is thanks to the 72-hour clause, which allows them to keep the door open to new offers.
“While the buyer tries to sell their property within the deadline, the seller may receive, and even accept, a second offer, explains Elena Maria Bejan. The first buyer has two options: Withdraw their offer or cancel all conditions in their offer to purchase that haven’t been fulfilled or waived, including the sale of their property. With the second option, the offer to purchase still stands, but the buyer must provide proof that they have the financing or funds necessary to proceed with the transaction.”
After this, it’s imperative for the buyer to verify that the property is consistent with the declarations made. These verifications include confirming property titles and making sure there aren’t any hidden easements or undisclosed debts, such as an unpaid mortgage. Ultimately, the goal is to make sure the property is exactly as advertised to avoid any unpleasant surprises before signing on the dotted line.
8. Prepare the legal contract between the two parties
If all the conditions are met within the proper time frame, the offer officially becomes a legally binding contract between the two parties.
9. Finalize the transaction before a notary
The final step in the process is to finalize the agreement before a notary. The notary is responsible for verifying the legal documents, drafting the final deed of sale and registering the transaction with the relevant authorities.
Once these formalities have been completed, the property is officially transferred to the buyer. The funds are then paid to the seller and the deal is complete.
In a real estate transaction, it’s understandable to want to know how the notary’s fees are split. In other words, who pays what to the notary? Some fees are assumed by the buyer, while others are the responsibility of the seller. Since each case is different, it’s helpful for the people involved in the transaction to understand the logic this split.
10. Take possession of the property
Once both parties have signed before the notary, the sale is complete and the buyer becomes the owner of the home. All of the work has been leading to this moment! The new owner takes possession on the date agreed on in the contract, often the day the notarial deed is signed.
The keys are handed over at the same time, and the new owners are free to move in or start renovations. This step marks the end of the purchase process.
FAQ
Where can I get an offer to purchase form?
The offer to purchase form is available from DuProprio.com, in a special section that includes all legal documents needed in a real estate transaction. Anyone who needs it can download it, whether it’s to prepare an offer or simply to get a better understanding of the steps involved in a transaction.
Which documents do I need to use to make an offer to purchase?
You need to have the appropriate form to draft an offer to purchase. Depending on the situation, there may be other documents you need to properly support the transaction, such as the Declaration of the seller, Amendments form, Notice of fulfilment of conditions, Counteroffer, and more.
These documents help clarify each step of the process, promote transparency between the parties and avoid any misunderstandings.
How do I make an offer to purchase?
First you need to complete the offer to purchase form, entering all of the essential information: proposed price, conditions (financing, inspection, verification of documents, etc.) and the desired possession date.
Once the document is complete, it must be sent to the seller. It can be sent by email, hand-delivered or even by registered mail, depending on what works best for both parties. This step formalizes the presentation of the offer and marks the start of the response period.
Did you know that DuProprio’s team of notaries can answer any questions you have about transfer of ownership? Watch our short videos to find out everything you need to know about our services and selling without an agent.
