How to make an offer on a house in Canada
You’ll never forget the first time you put an offer in on a house. Following a whirlwind of emotions, visiting several –or, in some cases, dozens—of homes, you finally think you’ve found the one and are ready to make an offer. It’s exciting, and it’s stressful. Hopefully, this guide will take some of the stress out of the situation so you can focus on the excitement.
How to make an offer on a house in Canada
I remember exactly where I was when I put an offer in on the first house, which became my home. I had driven two-and-a-half hours away from my current house to see several country homes in my price range. After seeing a few, realizing none of them were for me, I was starting to lose hope.
The last house on my tour, though, was different. Spacious but manageable, required some updates but nothing I couldn’t do myself, and it had a nice, big property I could enjoy campfires on. It was perfect. Driving home and discussing the house with my partner, we decided to make an offer. Luckily, she works in real estate and coached me along through the process. If it wasn’t for her, I probably would have had no idea how to make an offer on a house in Canada.
Here’s what you need to know.
How to write an offer on a house
Luckily, the actual writing of the offer is taken care of by your real estate agent. Work with them to determine what your offer includes, such as price, closing date, inclusions, and whether your offer is based on conditions, such as financing and home inspection.
In very competitive markets, some agents may advise against including certain conditions. Work with your agent to come up with an offer that you’re comfortable with. Waiving a home inspection can be dangerous.
Some things that are typically included in your offer:
- Finance condition
- Home inspection/review of condo status certificate
- Number of buyer visits
- Additional chattels (inclusions)
- Verifying what equipment is owned vs. rented
- The condition the home is to be left in
- Inclusion of a property survey
- How much your deposit will be
- Your purchase price
- Closing date
When can you make an offer on a house?
That depends on how the seller wants to handle offers on their property. Some sellers accept offers at any time. Others set an offer date with the hopes of creating a bidding war (typically so they can achieve a higher sale price). Just because there’s an offer date, though, some sellers may be open to pre-emptive (bully) offers. Again, speak with your agent and develop a strategy that makes you comfortable and confident your offer will ultimately be accepted.
Your agent can find out how the seller wants to manage offers and work with you to help put you in the best position to accept your offer.
Can you withdraw an offer on a house?
Your offer will include an irrevocable date and time, meaning the offer cannot be withdrawn during that period. After that time, the offer does expire. The seller may sign back, adjusting any terms and conditions (typically the price or inclusions). At this time, you evaluate their selling offer.
If your offer contains conditions (such as financing or inspection), there is an agreed-upon timeframe to either fulfill or waive those conditions. If the conditions don’t match your desires, you can request a mutual release to get out of the home purchase (which all parties and the brokerages must sign).
What is a deposit, and when is it due?
A deposit shows your good faith in going through with the deal. Deposits are typically 5% of the purchase price but can vary depending on the region you are purchasing. Ask your agent for advice on what is acceptable.
Your deposit is due within 24 hours of acceptance of your offer. Typically, deposits are provided as bank drafts, certified cheques, or wire transfers.
Note: The deposit is the upfront money you pay to secure an agreement of purchase and sale for a property. The down payment is the money that you pay to the seller to be eligible for your mortgage.
Also, check out our mortgage down payment calculator.
When is home insurance due?
You need to have home insurance set up before you close on the house. Call your insurance broker to see if you can bundle home insurance with any of your existing insurance products. Don’t have a broker? Give one a call; it’s free, and they can give you advice on lowering your overall insurance costs.
Do you need title insurance?
While title insurance isn’t required, it is recommended. Title insurance protects you in case of any issues with the title on the property. Your lawyer can arrange title insurance if you choose to get it.
The bottom line
Putting an offer in on a home is exciting – but it doesn’t have to be stressful. Lean on your agent for advice, ask a lot of questions, and hopefully, your offer will be accepted, and you’ll be on your way to moving into your new home.
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