No matter how good your offer is, if it is poorly written, your chances of the seller accepting it drops significantly. It is essential to use the right forms and procedures to give you the best chance at completing the transaction.
Here are a few steps to keep you on the right track:
Use the Right Form
Use the appropriate form. There is no one standard form you can use for everything. Because there are variations between purchase contracts in each province, you will have to determine which one is the correct one to use in your situation. If you do need help, a local realtor usually publishes different contracts.
Write Your Price in Full
Any form of cash to accelerate the process or give you a considerable edge over the offer is not considered a genuine offer. Do not say, “I will add a thousand dollars over your best offer.” Whatever price you have in mind, state it in full.
Initiate a Binding Deposit
In most cases, it is a requirement to make an initial deposit — also called a good faith deposit — to create a binding offer. This deposit can come in any form. Anything valuable such as cash, property, a mortgage, or even a personal cheque can serve as a deposit. Be wary, however, as the seller may be authorized to keep your deposit if you end up defaulting under the terms of the contract.
Make Your Down Payment Clear
Ensure that your seller knows how you are going to make down payments. It could either be in cash, stocks, or any other asset. The most common form of down payments is cash. It’s also important to note that some places require you to tell in advance how you are going to complete your down payments. If you’re offering an asset that can be turned to cash, this method can be considered a backup rather than the actual amount. It is then essential to disclose your choice to avoid any misunderstandings.
State your Financing Term
All your payments, down and deposit, including your funding, should equal the total expense you are spending on the property. In some contracts, you are allowed to state maximum interest. This will enable you to back off from a deal in the case that the interest rates go higher than the cap you’ve set.
In most cases, buyers are allowed to have the property examined for a certain length of time. Depending on your location, these actions may still be performed until the closing day if left in writing. You must include all your contingencies in the agreement.
Give Details on Possession
Confusion about the time when the buyer actually has possession of the property can sometimes cause the deal to fall through. Be very clear about when possession will happen. State if you want it on the closing day, or any other day you have in mind.
Specify Who Pays Fees
Fees can be paid in different ways. It can either be negotiated in the contract or voluntarily paid by either the buyer or the seller. If you don’t know what you’re doing, you might end up with a counteroffer. Ask your agent about the customs in the local area and follow it to the letter.
Ask for Special Reports
If you are worried or concerned about something specific, make it known right away. Notifying your seller later may cause mistrust between both parties and cause someone to feel cheated.
Clarify an Expiration Date
Allocate enough time for sellers to respond to offers. Some deals never happen because there isn’t enough time for a response. Sellers might be busy at the moment or away tackling an emergency, ask an agent and find out how long an offer should realistically last. Reading through contract laws can also be helpful to learn more about offer expiration.
Check it Again and Again
Check for mistakes, typos, and different areas that could use improvement. Review your contract again, and make sure everything is set in place and you are happy with it. Remember — this is a binding contract. Having someone else check your offer is also helpful in identifying any area in need of addressing.
Complete all the steps, and your offer is going to be noticed in no time! If you’re looking to buy real estate in Surrey, get in touch with us today! We’d be happy to help.