Making An Offer

When you're ready to make an offer on a home, it's important to understand the process and ensure you are fully prepared. All offers must be submitted through your Realtor, the professional you've hired or given implied consent to act on your behalf. Here’s a breakdown of how it all works and what you need to know:

Submitting an Offer Through Your Realtor

Your Realtor will help you prepare a written offer that includes all the necessary details, such as the offer price, deposit amount, closing date, and any conditions you want to include. The offer is then submitted to the seller’s agent, who will present it to the seller. Your Realtor will also negotiate on your behalf to ensure you get the best possible deal.

What Are Conditions?

Conditions in an offer are specific requirements that must be met for the sale to proceed. They protect you as a buyer by giving you time to secure financing, inspect the property, or review important documents. Conditions also allow you to ensure you're comfortable with the terms of the purchase before the sale becomes binding.

Common Conditions Include:

Financing Condition: Allows time to secure final mortgage approval.
Home Inspection Condition: Gives you the opportunity to have the home inspected for potential issues.
Status Certificate Condition (for condos): Allows for a review of the condo’s financial health and governance.
Property to Sell Condition: This is applicable if you have an existing property that must be sold before you can proceed with the purchase of the new home. It protects you from being financially over-committed.
General Due Diligence Condition: Gives you time to conduct broader research on the property, including reviewing zoning, permits, environmental concerns, or other legal matters.

Fulfilling Conditions

Once your offer is accepted, you’ll have a set period to fulfill any conditions included in your offer. Your Realtor will help guide you through each step. For example:

If there’s a financing condition, you’ll need to ensure your lender completes the final approval process.
For a home inspection, you’ll hire a professional to assess the home’s condition.
If a "Property to Sell" condition is in place, you’ll need to focus on selling your current home within the specified time frame.

Once all conditions are satisfied, the sale becomes firm, and the process moves forward to closing.

What Is a Firm and Unconditional Offer?

A firm or unconditional offer is one made without any conditions attached. This means you are committed to buying the home regardless of any unforeseen issues. This type of offer is more attractive to sellers, especially in competitive markets, but it comes with higher risks. For example, if you go in without a financing condition and your mortgage falls through, you could lose your deposit or face legal consequences.

Realtors and Conditions: Legal Considerations

For legal reasons, your Realtor will never advise you to submit an offer with no conditions. As your trusted guide, your Realtor is here to ensure you navigate the process safely and minimize risk. Therefore, while we can explain the potential benefits of a firm offer, we cannot and will not tell you to omit conditions.

That said, in competitive offer situations, you as the buyer may need to weigh the risk versus reward of including or removing conditions. This is a decision that must be made at your own discretion and risk. Understanding both the benefits and the potential consequences of a firm offer is crucial to making an informed decision.

Risks of Going In Without Conditions

While a firm offer might increase your chances of winning in a bidding war, it can be risky. Without a home inspection condition, you could discover costly issues after closing. Without a financing condition, you could face challenges securing your mortgage. It's important to carefully weigh the risks and consult your Realtor before submitting an unconditional offer.

Offers Based on Fair Market Value

It’s crucial to base your offer on fair market value rather than personal opinion or just "giving it a try" with a lowball offer. The market dictates the value of a home, and submitting an offer that’s too low could result in missing out on your dream property or losing credibility with the seller. Your Realtor will provide guidance based on comparable sales, helping you make an informed and competitive offer.

By working with your Realtor and considering all aspects of the offer process, you can make a confident, well-informed decision when submitting an offer on a property.