What is an Offer-to-Purchase? Answer, and More Details…

June 29, 2015
By Cody Battershill

What is an Offer to Purchase and How Does it Relate to My Real Estate Transaction?

An “offer-to-purchase” is a contract between a buyer and seller facilitated by the buyer’s agent which specifies price, possession date, terms and conditions as it pertains to the real estate transaction.

Here are some of the key details related to an offer-to-purchase you should know:

Price

The price of a property is negotiated through the written offer and back and forth negotiation between agents. Price is broken down into three parts:

Initial deposit – initial amount of cash put down on the property, will become part of the buyers down payment if sale goes through

Financing amount - offer to purchase will specify amount that you are looking to get financed for

Balance owing - makes up difference between purchase price, financing and initial deposit. Therefore, your initial deposit plus balance owing equals your total equity investment.

The initial deposit and balance owing on the offer make up your total down payment. It is important to note that initial deposits are refundable if the conditions are not waived.

Find out more at Costs Involved With Buying a Home in Calgary today.

Terms

Terms are items in an offer to purchase agreed between both sides that form a part of the offer to purchase. Examples of these include, but are not limited to:

Work to be completed on the property

Items included in the sale such as appliances, or in some instances furniture (if agreed upon)

Closing date and possession date

Buyers or sellers can come up with terms that they want to be included in the offer-to-purchase. A more flexible list of terms usually helps out with the buying and / or selling process.

Conditions

The conditions of any typical residential real estate transaction include:

Property inspection – allows a specified amount of time to have a licensed property inspector to go through the home and give his report. Why is a home inspection important anyways?

Financing condition – gives you a specified amount of time to arrange mortgage financing

Document review condition (for condos) – gives a period of time to review all condo documents related to the condominium corporation. See more at:

New Calgary Condo Guide – Condo Documents

Calgary Condo Buyers: Review Your Condo Documents

More Real Estate Guides

Calgary First Time Home Buyers Guide - Are you a first time home buyer? Find out everything you need to know here.

Calgary Home Sellers Guide - Selling sometime soon? A full guide to all the aspects of selling real estate in Calgary.

Calgary Home Buyers Guide - Have your eyes on a home or condo? See what you should know about the buying process today.

Questions About Calgary Real Estate?

As an experienced REMAX real estate professional, I guarantee only the best level of service and expertise the industry has to offer while helping you accomplish all your real estate goals.