How to make an offer to purchase a home and what are the steps?

Published on 18/09/2017

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Now you've found the home of your dreams, the one that meets your needs.  The next step in purchasing this home is to show your interest to the current owner by presenting an offer to purchase (or promise to purchase) for it.

When it comes to a first real estate transaction, this process can seem complex and intimidating, among other things because of its legal scope.  However, it is enough to respect the steps and to pay attention to the content of the offer that is submitted.  In the following paragraphs, we will discuss these steps, as well as the information that must be included in the offer to purchase.

What is the content of an offer to purchase a home?

It is essential that the offer to purchase be properly completed, otherwise problems may arise once the offer is submitted. For each item, you must ensure that you are able to meet the conditions that are written in the document.

The following information must be included in the offer to purchase: 

• Information about the property in question (address, dimensions, area, lot number, current condition of the building, etc.);
• Basic information and contact details of the buyer and seller (name and address);
• Important documents to which the buyer wishes to have access (e.g. certificate of location, title of property, work invoices, inspection report);
• Everything included and excluded from the sale (furniture, appliances, parking, pool);
• The buyer's requirements for the property (guarantees);
• The date of taking possession of the property;
• The price offered by the buyer (it is also necessary to verify if it is subject to GST and QST);
• The amount of the deposit, if any;
• The method of payment and the terms of the mortgage financing;
• The date and signature of the deed of the sale and the name of the notary before whom the document will be signed;
• The special clauses and conditions precedent to the sale (e.g. offer conditional on the consultation of certain documents, offer conditional on an inspection).

All of this information is very important, but special attention should be paid to certain sections such as mortgage financing. In this section, it should be noted that the purchase of the house is conditional to obtaining financing.

Also, be aware of that it is very important that everything you have discussed with the buyer be put in writing to carry legal weight.  Offer to purchase forms are available from your real estate broker who will fill it out with you.

The main steps to make an offer on a house

Making an offer to purchase is one of the first concrete steps in a real estate transaction.  Prior to this, there may have been a pre-negotiation with the seller, depending on the case.

When filling out the offer to purchase, time should be spent thinking about the price. The first aspect to take into account is of course the amount of money you are willing to spend on the purchase.  Then, we look at the comparables  by observing the recent transactions that have taken place in the area.

Following this decision about the price, we fill in the other information according to what we want while remaining realistic.  Once the document has been filled out and reread several times, it's time to submit the offer to purchase!

Be aware that once you have submitted the offer to purchase, you cannot ask to change it.  This offer is a promise to purchase and is formally binding on you and the seller, which means that unless you have included special clauses to this effect in the document, it is not possible to retract it.

The role of the real estate broker during the offer to purchase

It is always important to be well accompanied when presenting an offer to purchase. In fact, nothing can replace the experience and valuable advice of a real estate broker and the fact that he is not emotionally involved.  He can really help you make clear decisions. He also accompanies the latter during the subsequent steps (building inspection, reading and explanation of the different documents at the property, etc.).  In fact, it is highly recommended to use a real estate broker to present an offer to purchase a house.