Offers and counter offers – The blog of a first time home buyer
You’ve found a house you love (or like, it doesn’t have to be a love-at-first-sight kind of deal) and you’re ready to make an offer, what happens next?
Firstly, this process is going to be an exercise in teamwork and trust between you and your REALTORⓇ, which is why it is so important that you choose the right one for your needs! For my home, my offer was pretty simple. There was only one back-and-forth negotiating price (I’ll be honest, I didn’t want to push hard, I really just wanted to be sure we got it!). Rob had to negotiate his cut, because the home I wanted was listed privately, otherwise everything from the offer standpoint went very smoothly.
The offer itself might sound like an intimidating document, but it is really just this information broken up:
- Your name(s), the seller(s) name(s), and the address of the property
- This one’s pretty obvious
- The price you’re offering to pay
- This price does not include any applicable CMHC fees that would be added to your mortgage if you pay under a 20% deposit.
- Extra items you want included
- The general rule is that if you turned the house upside down and the object didn’t move, it is assumed to be included in the house. Usual items include window coverings (like blinds), bathroom mirrors, and major appliances. If there’s a storage unit, rolling kitchen island, etc., you can always see if the seller is willing to keep it as a part of the home, but keep in mind the more you ask for, the less the sellers will be willing to negotiate price.
- The date you’d like to take possession
- This is your closing date, or the day you’ll take legal ownership of the property (typically at the end of the business day, so I recommend you don’t plan to move on this date)
- The date and time the offer expires
- A date and time set between you and your REALTORⓇ for when this offer expires. Typically you do not give much time to encourage a quick acceptance or counter.
- All other conditions to be met
- This includes the offer being conditional on a satisfactory home inspection. The inspection (which is at your own cost), may turn up unknown issues which will cause you to adjust your offer or walk away. You also might have agreed upon something being fixed, changed, painted, etc. Lastly, it will often ask for a disclosure statement, which is a document signed by the current owner disclosing any issues or repairs that they know of while they lived in the home.
You’ll fill in these details with your REALTORⓇ and likely submit the offer online. If you’re like me, you’ll be almost holding you breath waiting for the response, but be patient! Hopefully you’ll hear back by your offer’s expiration time (you might not though). When you do hear back, one of four things will happen:
The Offer is accepted: Yay! Your offer was reasonable and the sellers have agreed to all your terms. Move on to next week’s blog post because you have an accepted offer!
The Offer is rejected: On no! To the seller, your offer wasn’t reasonable enough to bother countering, and it has been rejected altogether. Your REALTORⓇ might be able to get some more inside information about why, but don’t get too discouraged! You could always write another offer or continue your search.
Your Offer is countered: The most likely outcome is that your offer is countered. They might agree with some of your conditions, they might counter back at a different price, they might not like the proposed closing date, etc. There’s a million reasons your offer could be countered, but now it’s your decision on what to do.
You enter into a multiple offer situation: In the case where multiple parties put in an offer on the same property, you might have to adjust your offer to “beat” out the other offer(s). You wouldn’t see this on a counter, but you’d find out from your REALTORⓇ.
No matter what you hear back, what you do next is up to you! You can continue negotiations, you can walk away, or you can accept their offer and move forward. Your REALTORⓇ will likely have advice, particularly if they’re an experienced negotiator. At the end of the day you’ll either have an accepted offer (so look out for next week’s post) or you’ll be continuing your search.
Andy Tree is a professional Wedding Photographer, marketing expert, coffee lover, millennial, board game enthusiast, and overall nerd. Over the next weeks he’ll fill you in on every step of his search and first home purchase.
Send us a message on Facebook if you have any specific questions or if you’re ready to start your own search!