5-part breakdown of the Offer to Purchase
The moment you’ve been waiting for is finally here! Someone wants to make an offer on your home! The Offer to Purchase is a contract that binds you to the buyer and is required by the notary to prepare the bill of sale.
Until this bill of sale is signed, our team of notaries is available to answer all your questions about the process. However, here is a 5-part breakdown of the Offer to Purchase to help you better understand it.
1. Price and terms
The buyer must indicate what price is being offered for the property and what the terms of payment are (Item 3 in the Offer to Purchase). This includes the amount of the down payment and of the mortgage. The buyer and seller can also agree on a deposit (included in the down payment), but this isn’t mandatory.
2. Commitments of the buyer and seller
The two parties must declare that they have read and are aware of their obligations (Items 4 and 5).
The buyer undertakes to pay certain fees and honoraria, like those involved in the bill of sale. The buyer also certifies having visited the property and being satisfied with it.
The seller’s commitments include delivering the property in the same state as when the buyer last visited it, and providing the title to the property and a valid surveyor’s certificate.
Then, the parties must agree on the conditions of the Offer to Purchase (Item 6). Here are the most common:
- Proof of financing (mortgage agreement)
- Sale of the buyer’s property
The timelines for meeting these conditions can be changed before or after the Offer to Purchase is signed.
4. Signature and acceptance
The buyer determines the deadline for the seller to respond (Item 9), usually 24 to 72 hours. The buyer signs the Offer to Purchase (Item 10) and gives it to the seller, who must then decide whether to accept it, refuse it or submit a counter offer (Item 11). If the seller doesn’t respond by the deadline noted in the document, this in effect cancels the offer.
Note however that the most effective way of preparing the Offer to Purchase is by negotiating verbally and filling out the document together. This is one of the great advantages of selling without a go-between.
5. Meeting the conditions
The timeframe for fulfilling the conditions starts when the buyer accepts the offer or when the seller accepts the counter offer. “Day 1” designates the day following the date of acceptance. And finally, the property is considered sold once the conditions have been met.
Furthermore, here are several documents available on our website in the Offer to Purchase and other legal documents section. They include the Procedure to Make an Offer to Purchase, the Annotated Offer to Purchase, the Counter Offer, and the Amendments and Notice of Fulfillment of Conditions. These will come in handy when the time comes.