The Offer to Purchase Document

A01.

Be sure to ask the owner lots of questions and thoroughly review of the property.  If you are interested, discuss price, closing date, and conditions with the owner.

ByTheOwner.com recommends that you always have your real estate lawyer review everything before you sign. So the first step in making an offer is consulting your real estate lawyer. Once you’ve decided that you would like to make an offer on the property, you will need to get the following information from the seller: seller’s name(s), address of the property, closing date, conditions, all included and excluded chattels…

All questions regarding the offer to purchase should be forwarded to your lawyer.

A02.

1. Accept the offer.
2. Reject the offer.
3. Make a counter-offer.

A03.

• Contains the legal names of the purchaser and seller.
• Contains the legal address of the property.
• Contains the amount of the deposit and the amount to be paid on closing – paid in trust to the seller’s lawyer.
• Lists what is included (chattels) – e.g. fridge, stove, washer and dryer, fixtures.
• Lists what is excluded – e.g. satellite dish, wood stove, ...
• Lists all rental items – e.g. hot water heater.
• Includes an irrevocability date – this is the date and exact time that the offer will expire if not accepted.
• Includes a completion date – this is the date that the contract will be filled.
• Includes conditions.

A04.

Conditional on financing – This allows the buyer time to arrange a mortgage or collect the money to be paid. One week is usually ideal for a buyer to find a mortgage. If they have not received approval for the money within the stated time period, then the contract is void and your home is back on the market. If the buyer receives financing before the week ends, then the buyer waives this clause and the contract is still valid. The buyer gives a written waiver to his lawyer who then sends it to the seller’s lawyer.

Conditional on home inspection – This allows the buyer time to have a home inspector come and evaluate the home. One week is usually ideal for a buyer to find an inspector and to have a home inspected. It is important to note that a home never “fails” a home inspection. A home inspection simply involves a building expert coming in to inspect the house to give the buyer his opinion of the building. The inspector will advise the buyer of any problem or potential problem uncovered during the inspection. The buyer can then decide to waive the home inspection clause and proceed with the purchase of the home or to back out of the contract based on the home inspector’s assessment. The decision to waive the clause is up to the buyer.

For example – the home may have serious damage and the home inspector may point out many problems with the home. The buyer has the option of proceeding or backing out of the purchase. Essentially, clauses like financing and home inspection are ways for buyers to cancel the offer to purchase if they want to. This is why sellers only allow buyers 1 to 2 weeks to fulfill these conditions. If you allow a buyer 2 months to arrange financing, then he can come back to you in two months and say “we didn’t get approved”. The contract then becomes invalid and your home goes back on the market. Again, it is important to educate yourself and read our guide.

 

A05.

After the seller accepts the offer, it is then up to the buyer to waive all the conditions by the appropriate date. At which time, the contract is a valid document and the rest is up to the lawyers.

Congratulations!

A01.

The first accepted offer prevails unless an agreement is reached between the buyer and the seller with regard to cancelling this promise to purchase.

A02.

No, once the buyer informs the promisor/seller of the defects noted during the inspection, the seller’s obligation is limited to performing 100% of the repairs and/or deducting the total cost of the necessary repairs from the sale price.

A03.

The seller is under no obligation to disclose the terms of previous offers to subsequent buyers. The seller must inform the buyers of his or her decision within the timeframe stipulated on the offer, and may accept the most beneficial offer.

A04.

This right entitles the buyer to purchase the building at the best price offered by other buyers. The terms of the other offers received must be disclosed in order for him or her to decide whether or not to exercise his or her right of refusal.

A05.

Once you accept an offer, whether or not your acceptance is conditional, you may not process other offers. You may process another offer if the terms or conditions state that the offer will be accepted if the first one becomes null and void. This is a complex situation and you should seek your lawyer’s counsel before committing yourself.

A06.

Considering the fact that the offer to purchase is conditional on the sale of the seller’s building, only the failure to sell that building can cancel the offer to purchase. If you have concrete evidence leading you to believe otherwise, you would have to contact a real estate lawyer since Section 1712 of the Québec Civil Code stipulates that "Failure by the promisor, whether he be the seller or the buyer, to execute the deed entitles the beneficiary of the promise to obtain a judgment in lieu thereof".

A07.

An accepted promise binds the parties and therefore satisfies the buyer’s sales condition.

A08.

A declaration signed by both parties to the effect that the condition is fulfilled on or before the date set out in the condition on the offer to purchase is sufficient. This document should be sent to both lawyers and the seller.

A09.

You may oblige your buyer to visit the notary under Section 1712 of the Québec Civil Code which stipulates, "Failure by the promisor, whether he be the seller or the buyer, to execute the deed entitles the beneficiary of the promise to obtain a judgment in lieu thereof".

A10.

Yes, your buyer could force you to leave the premises since the promise to purchase is conditional on the sale of his property and not on the purchase of your new property.

A11.

No. However, the lawyer is qualified to study the promise to purchase in order to ascertain the legality of the clauses and explain the boundaries and abuttals. This can be achieved by using the buyer and seller solicitor conditions with the offer to purchase.

A12.

The buyer is not bound to renegotiate the promise to purchase once it has been signed.

A13.

Unless a notice is received to the contrary, these refer to business days.

A14.

An offer that is conditional on the sale of the buyer’s property is difficult to cancel without the consent of the buyer if no timeframe was set. You can try to come to an agreement with the buyer regarding the establishment of a timeframe or the removal of the condition. Otherwise, you may approach the Court to either cancel the promise or oblige the buyer to waive the condition.

A15.

You have to visit the notary to sign the deed of sale on or before the date indicated on the promise to purchase. The buyer’s cash deposit is yours.

A16.

It would be preferable to have a written agreement for the purposes of having evidence, but a verbal agreement is equivalent to a written agreement.

A17.

Yes. If permits were not obtained, the additions may not be considered a legal part of the property and may be subject to inspection or removal by the municipality.

A18. Yes, this person should be a third party not involved with the transaction. It can be a family member or friend providing they are not on the deed or title of the property being sold.

A19.

The offer to purchase by fax is acceptable if the fax numbers of both parties are indicated on the offer. An emailed document with no signatures is not a legal document; however, a signed offer that has been scanned and emailed constitutes an accepted offer.

A20.

No. This information could be add once all the conditions are met.  Make sure you agree with the owner to identify a lawyer soon as possible because all the property titles will have to be provide for the deed of sale. 

A21.

This clause allows the seller to continue offering the property for sale while waiting for a condition, such as the sale of the buyer’s property, to be met. The seller must notify the buyer of any new offer made by another buyer and the seller has 72 hours to notify the buyer that the condition or the promise is being cancelled, thereby enabling the seller to sell the property to another buyer.