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What to Include in an Offer to Purchase a Home in Alberta

Writer's picture: StartritehomesStartritehomes

Updated: Jan 14

The process of purchasing real estate is an exciting and pivotal milestone in one's life. After finding the right property, the first step is crafting an offer to purchase. This document serves as the foundation for the transaction, outlining the terms and conditions that both the buyer and the seller must agree to and adhere to within a specific time frame.


The offer to purchase must include the buyer's legal name, seller's legal name, and the address of the property. The purchase price, the amount of the deposit, and chattels the buyer would like included or excluded; conditions usually for home inspection and financing; closing date; possession date; offer expiration date; and any additional terms such as a request for a land survey or property information statement. A compelling offer to purchase involves careful consideration of these components to ensure a successful and satisfactory transaction for both parties.


 What is an offer to purchase?


 An offer to purchase is a formal proposal made by a prospective buyer to the seller. It outlines the terms and conditions under which the buyer is willing to purchase the property. The offer to purchase is not binding until all conditions have been met. A buyer may also receive a counteroffer from the seller, as the offer to purchase can be negotiated until a mutually accepted agreement is reached. Once the offer is agreed upon by both parties and the conditions have been met, the offer is given to a real estate lawyer for conveyance.




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Essential Elements of an Offer to Purchase


Purchase Price

 

The most critical element of the offer is the purchase price. This figure reflects the amount the buyer is willing to pay for the property. It is becoming more common for buyers to have the property appraised or request that the seller provide a current appraisal. The appraised amount of the property is a solid starting point to help determine a fair and reasonable offer. The offer should also specify whether the purchase price includes any chattels such as appliances or window treatments.


Deposit

 

The offer should detail the amount of the deposit to be provided by the buyer as a show of good faith and commitment to the purchase. The deposit is refundable if conditions such as financing or home inspection are not met, unless otherwise stated in the offer to purchase. Usually, the deposit is held in trust by a real estate brokerage or a real estate lawyer until conditions are satisfied and the deal becomes firm. Once the conditions are waived and the offer is firm, the deposit remains in trust and is put towards the purchase price of the property.

 

Conditions or Contingencies


Contingencies are conditions that must be met for the sale to proceed. Typical contingencies include home inspection, appraisal, financing, and insurance. The offer should clearly outline the specifics of each contingency and the timeline for their fulfillment.

 

Closing Date and Possession Date


Determining the closing date, which is when the final transfer of ownership occurs, and the possession date, when the buyer can move into the property, are crucial components of the offer. Both dates should be clearly specified to avoid any confusion or discrepancies.


Seller Concessions


If the buyer is requesting the seller to cover certain costs, such as title insurance or repairs, these concessions should be clearly outlined in the offer. Defining the scope and limits of the seller concessions is essential for a comprehensive agreement.


Disclosures

 

The offer should address the seller's disclosure obligations, requiring the seller to provide information about the property's condition and any known defects. In Canada, the seller has a legal obligation to disclose any latent defects they are aware of. This can also include renovations done without permits. A Seller Property Information Statement (SPIS) is a common document that sellers provide. If a seller fails to disclose material facts or latent defects on the SPIS, the seller can be held legally liable if existing issues are found after the sale of the property.


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Expiration Date:


To prevent the offer from remaining open indefinitely, it is crucial to include an expiration date. This date indicates the deadline by which the seller must accept, reject, or counter the offer.


Additional Terms and Conditions:


Any additional terms or conditions, such as including specific personal property in the sale or a lease-back option for the seller, should be clearly detailed in the offer.


Free, non-copyrighted templates for real estate offer to purchase agreements are available from the following sources:

  • TemplateLab: Offers a range of real estate purchase agreement templates.


  • FreeForms: Provides complimentary real estate purchase agreement forms in both PDF and Word formats.


These resources offer templates that can be tailored to meet your specific requirements.


Engaging the services of a real estate lawyer or agent can offer essential guidance during the offer-making process, assisting buyers in crafting a thorough and precise offer that accurately reflects their intentions and expectations for acquiring their ideal home. Utilize our Pro Search feature to connect with experienced and trusted real estate professionals in your area.


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