Buying a house is a huge undertaking, and this is a decision that should not be made in haste. The excitement of buying a new home can sometimes cloud the thinking and may lead one to make the wrong decision about a specific home they are interested in. By becoming more knowledgeable about buying a house it allows the buyer to keep things in their proper perspective.
What Should I Know Before Making an Offer on a House?
There are several things that a potential home buyer needs to know before making an offer to buy the house.
The buyer needs to fully understand what their financial situation is. Pertaining to this they need to know the following
- A buyer will usually need to provide a deposit at the time they are going to make the offer. This can vary in amount but is often around $500 to $1,000. It is given to the real estate agent to hold onto.
- Then there will be the down payment on the home that is being asked for by the seller. In Canada, the minimum downpayment on a home purchase is 5%. The buyer needs to know they will have the funds to be able to pay this upon closing.
- It is wise to get pre-approved for a mortgage if the new house is not being paid for in cash. This way the buyer knows exactly how much they will be able to spend on a new home.
The cost of buying a house does not end upon closing. As a new homeowner there will be ongoing costs. Such as the utility bills and the taxes. The seller has to know what their income is and their financial obligations to determine if they are going to be able to afford these ongoing costs.
The Condition of the Home
No new home buyer wants to buy a new home that is immediately going to present problems to them that is going to cost a lot of money to fix. This means the potential buyer has to be alert during the home viewing to make sure that everything appears to be in good order. This includes major components of the house such as;
- The roof
- The structure
- The plumbing
- The heating
- That there are no signs of leakage or strange odors of mildew and mold
The seller has to be aware that it is not only the house itself that is important but the neighborhood and the vicinity. Finding out more about this means asking questions and doing research. A potential home buyer has the right to ask the seller any questions about the house if they are present at the viewing.
Alternatively, questions can be asked of the realtor who in turn can forward these to the seller’s realtor for answers. Further research can be done on the neighborhood as it applies to schools, crime rate, amenities, public transportation and proximity to work.
The Right Home for the Family
It is normal during a home viewing to get caught up in all the good features that a home may have. Especially if the home presents well. But the seller has to focus on those areas of the home that are going to meet the needs of those who will be living in it. As well as those areas that are not going to be suitable.
Once the decision is made to place an offer on the house then the buyer is entering into the legal aspects of home buying. The buyer will be required to sign an offer to purchase which is filled out by the real estate agent. It is important that the buyer fully understand what they are signing. They do have the option of taking this to a real estate lawyer to review it before having the offer presented.
How To Make An Offer On A House In Ontario
Making an offer on a house is a relatively simple process. Provided one is using a qualified real estate agent as their representative.
A potential buyer has a full viewing of the house to make sure that is the house they want to buy.
The potential buyers decide on a price they want to offer for the house. They are not compelled to offer the asking price.
The buyer decides if they want anything that was not affixed in the home to be part of the offer. For example, the buyer may want the appliances to go with the home or the drapery. If so these need to be put into the offer.
There is also an opportunity for the buyer to put some conditions into the offer. For example, they can stipulate that the offer is only good if the buyer’s home sells. Or, if the home being bought passes a home inspection.
A closing date is agreed upon. This is the date that the buyer wants to be able to take possession of the home if the seller agrees to the offer.
The buyer decided on how much time he wants to give the seller the chance to accept the offer.
The real estate agent of the buyer presents the offer to the seller’s agent who in turn presents it to the seller.
At this point, the seller can make any changes that they want to the offer to purchase by writing the changes on the offer and initialing it. For example, the seller may not accept the price being offered by the buyer, so they will change this price to what they will accept.
Then the offer goes back to the buyer who decides if they are going to accept the changes.
The offer to purchase can go back and forth several times before an agreement is made. But, the offer to purchase has to be finalized by the set date on the contract for accepting the offer.
Is Making An Offer On A House Legally Binding?
Making an offer on a house is not legally binding to all parties have accepted and signed it. The offer will have a date on it that the seller has to accept the offer by. The offer to buy is binding during this period even if it has not been signed. If the offer is not signed within this period then, it is not binding.
Do You Get to Do a Home Inspection Before You Make an Offer?
You could ask to have a home inspection done before you make an offer, but the home seller does not have to agree to this. It is better to make an offer on the condition that a home inspection is done and it passes the inspection. The home seller still has the option to turn down the offer or have this condition removed before they accept the offer. Then it is up to the buyer whether they want to go ahead with the offer without the inspection being done.
Can You Offer Less On A House?
Most often buyers realize they may not get the full price they are asking for their house. Unless the market is hot and bidding wars are going on. A potential buyer has the right to offer whatever amount they want for a house they are interested in buying. Negotiations can go back and forth several times during the open period of the contract.