What you need to know before putting in an offer to purchase?
Category Expert Insight
There is nothing more exciting than putting in an offer on your next home but before you do it’s important to make sure you understand what signing on the dotted line means.
1. An offer to purchase is a legally binding contract and once signed the buyer will be held to the terms of this agreement. So, it is important for the buyer to make sure they can meet the terms of the agreement.
2. The buyer needs to make sure they are financially able to meet all the contractual obligations BEFORE signing on the dotted line.
3. All solid fixtures that have been ‘permanently’ attached to the home are considered part of the property and so will stay.
4. It is possible for the buyer to put an offer in on another property while in the process of selling their current property, this is known as a subject to sale clause.
5. There will be a time limit given to the amount of time the buyer has to sell their property in order to buy another. The duration will need to be specified and agreed upon by both the buyer and seller.
6. Similarly, if the property is to be purchased only once the buyer has secured a bond, this should be included in the OTP.
7. The letter of offer must include the date that the previous owner is to vacate the property and the date from which the new owner may take occupation.
8. The buyer should ensure a proper property inspection takes place to avoid any costly disappointments.
9. If there are physical issues with the property that need to be corrected the buyer can use this to negotiate a slight drop the price or ask that these areas be fixed before purchasing the new property.
10. The OTP agreement is a legally binding contract and so it’s vital for both the buyer and seller to be happy with the terms before signing the contract.
Author: Seeff Head Office
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