Elements of an Offer Explained
There are six key components to the elements of an offer. They are:
Depending on the local market conditions and information provided by me, your Real Estate Professional, the price you offer may be different from the seller’s price.
Your deposit shows good faith and will be applied against the purchase of the home when the sale closes. As your Real Estate Professional I can advise you on an appropriate amount.
Includes the total price offered and the financing details. You arrange your own financing or ask to assume the seller’s mortgage, especially if it has an attractive interest rate.
These might include “subject to home inspection”, “subject to you obtaining financing”, or “subject to you selling your property”.
Inclusions and Exclusions
These might include appliances and certain fixtures or decorative items, such as window coverings or mirrors. These items would remain in the house.
Closing or Possession DateTerms
Generally, the day the title of the property is legally transferred and the transaction of funds finalized.
Making an Offer
When it comes time to make an offer you will require current market information and assistance in drafting your offer. You will need a Real Estate Professional.
A Real Estate Professional will communicate your Offer to Purchase to the seller, or the seller’s representative, on your behalf. Sometimes there may be more than one offer on a property at the same time. A Real Estate Professional can guide you through this process.
Firm Offer to Purchase
Usually preferable to the seller because it means buyers are prepared to purchase the home without any conditions.
Conditional Offer to Purchase
Usually means there are one or more conditions on the purchase, such as “subject to home inspection”, “subject to financing” or “subject to sale of buyer’s existing home”. The home is not sold until all the conditions have been met.
Acceptance of Offer
An Offer to Purchase is presented to a seller who may accept the offer, reject it, or submit a counter-offer. The counter-offer may be in reference to the price, closing date, or any number of variables. Offers can go back and forth until both parties have agreed to terms or either side ends the negotiations.
Renting vs Home Ownership
This is a decision which many people face, and the decision is not as easy to make as it may sound.
As a homeowner, you can reasonably expect the equity in your home to increase over time as your mortgage is paid down. That, combined with regular appreciation in property values, can be a rapid and rewarding way to increase your net worth. In contrast, the person renting over the same amount of time is left with no property investment but may have enjoyed lower living expenses and the opportunity to invest in other opportunities.
When comparing owning to renting, you have to add up all of the figures, including the cost of your home, the size of your down payment, utilities, immediate repairs, interest rates and insurance, and compare them with how much you are currently spending on rent.
Of course, you also have to place a value on the enjoyment and satisfaction that you will derive from owning your own home.