Making an Offer
Making an Offer on a Home: A Step-by-Step Guide for Ontario Buyers
Crafting the perfect offer on a home is both an art and a science. It’s your chance to show sellers you’re serious while ensuring your interests are protected.
This guide will walk you through everything you need to know to confidently make an offer that’s competitive and fair.
Step 1: Prepare Before You Write the Offer
Get Pre-Approved
Having pre-approval from a lender is one of your strongest negotiating tools. It demonstrates to the seller that you’re financially prepared to complete the purchase. Without it, sellers may hesitate to accept your offer.
Step 2: Do Your Homework on the Property
Before making an offer, gather as much information as possible about the home. Here are six critical questions to consider:
Why is the seller moving?
Understanding the seller’s motivation can give you an edge in negotiations. For example, a seller relocating for a job might accept a slightly lower price for a quicker closing.What’s the home’s purchase history?
While the seller’s original purchase price may not reflect today’s market value, knowing how much they paid and when can provide context for your offer.What are the seller’s favorite and least favorite features?
Sellers might share insights that reveal unique characteristics of the home—or highlight potential drawbacks. For example, they might rave about the sun-filled living room while mentioning a neighbor’s barking dog.Have there been any major issues with the home?
Ask if the home has had past repairs or problems, such as leaks, structural issues, or electrical problems. Even if fixed, these can impact the home’s value and your decision-making.Are there any nuisances in the area?
This could include anything from noisy neighbors to planned construction projects. A seemingly quiet street might have hidden challenges you’ll want to factor into your decision.How are the local schools?
Even if you don’t have children, schools significantly influence property values. Learning about the reputation of nearby schools can provide valuable insight into the home’s long-term value.
Step 3: Crafting the Offer
When you’re ready to make an offer, it’s not just about the price—you’ll need to consider several key elements:
Price Strategy
Work with your real estate agent to determine a competitive offer based on market analysis, the home’s condition, and local demand. Don’t automatically assume a lower offer will save money—it could cost you the home in a hot market.
Conditions and Contingencies
Protect your interests by including contingencies such as:
Home Inspection: Allows you to back out if significant issues are uncovered.
Financing: Ensures you can secure a mortgage before the deal closes.
Sale of Existing Home: If applicable, this clause provides time to sell your current property.
Deposit Amount
In Ontario, a deposit is typically required to demonstrate your commitment to the purchase. Your agent can help determine a reasonable amount that strengthens your offer.
Step 4: Negotiate Like a Pro
The seller may counter your offer with different terms, such as a higher price or adjusted closing date.
Be prepared to negotiate and prioritize your must-haves versus nice-to-haves. Your agent will guide you through this process to ensure your interests are represented.
Step 5: Evaluate Before Finalizing
Before signing the dotted line, revisit key details:
Inspection Results: Address any red flags discovered during the home inspection.
Community Insights: Confirm the neighborhood aligns with your lifestyle.
Property Condition: Verify the home matches its advertised state through a final walkthrough.
Pro Tips for Ontario Buyers Making an Offer
Be Flexible on Closing Dates: Offering flexibility on when the deal closes can sometimes give you an edge over other buyers.
Stay Within Your Budget: Avoid the temptation to exceed your budget during bidding wars. There will always be another great home.
Rely on Your Agent: A skilled real estate agent can provide invaluable advice, from evaluating comparable sales to crafting a compelling offer.
FAQs About Making an Offer
Q: How much should I offer below asking price?
A: It depends on the market. In competitive markets, you may need to offer at or above asking. In slower markets, there may be room to negotiate.
Q: What happens if the seller rejects my offer?
A: The seller may reject, accept, or counter your offer. Work with your agent to determine your next steps if the offer isn’t accepted.
Q: Can I back out of an offer?
A: If you included contingencies (e.g., financing or inspection), you may withdraw without penalties if conditions aren’t met.
Q: What is the difference between a deposit and a down payment?
A: A deposit is a good-faith payment submitted with the offer. The down payment is the portion of the purchase price paid at closing.
Q: How long does it take for an offer to be accepted?
A: Sellers typically respond within 24-48 hours, but this can vary depending on circumstances.
Making an offer can feel like a high-stakes step, but with preparation and expert guidance, you can approach the process confidently. Ready to make your move?
Contact us today to start your home-buying journey!
Whether you're looking to buy in Brantford, Burlington, Caledonia, Guelph, Halton Hills, Hamilton, Kitchener, Lincoln, Milton, Mississauga, Niagara Falls, Niagara-On-The-Lake (NOTL), Oakville, St. Catharines, Toronto, Waterdown, Waterloo or anywhere in between, searching for a home can be extremely time consuming and strenuous. Working with our professionals will save you time, energy and stress!
