1. Decide on Price, Terms and Conditions
Your agent will conduct a Comparative Market Analysis (CMA), complete with comparable active and expired listings, recent solds and other historical data to determine the market value of the home. You also need to decide on a closing date and if there will be any conditions to the offer.
2. Prepare the Offer
Your agent will create a legal document (Contract of Purchase and Sale) that protects you, follows your instructions and matches your schedule and needs.
3. Review the Offer
Your agent explains the details and terms of the offer and suggests options for specialty clauses.
4. Present the Offer
Your agent will present and negotiate the offer on your behalf.
5. What Happens Next?
- The seller accepts your offer
- The seller rejects your offer
- The seller countersigns (changes the terms of the offer and presents the offer back to you)
Important Contract Dates
Subject Removal Date & Deposit Date
This is the date when the subjects of your offer are removed and the deal is considered firm. On this date, you must also pay the deposit, which is typically 5% of the purchase price and is in the form of a bank draft. Once the deal is firm, you are legally obligated to go ahead with the purchase.
This is the date that legal ownership and monies are exchanged between the old owner and you. You are now on title, which means you are the legal owner of the property.
This is the date on which the buyer assumes full responsibility for property taxes, strata fees where applicable, hydro and gas bills, etc. The lawyer or notary also use this date to split the costs proportionally between the buyer and seller. Notably, the Adjustment Date is typically the same day as the Possession Date.
This is the date you get the keys and gain possession of the property. This is usually the same day as the Completion Date, or 1 to 3 days after.
How The Subject Removal Process Works:
1. Subjects or Conditions
You have agreed on the price and terms and now you have a firm or a conditional offer in place. If you have a conditional offer, this means that there are subjects contained in the offer to purchase. The purpose of a subject is to set out a specific condition which must be fulfilled BEFORE the sale can go through. However, the contract is still legally binding once it is signed by both parties.
2. Subject Removal
If you have subjects, now is the time to start the process of satisfying them in order to meet the deadline and firm up your purchase. Once you are satisfied and wish to commit to purchasing the home, a real estate agent will prepare a subject removal document for you to sign. Once all the subjects are moved, you have a firm deal.
3. Subject Extension
Sometimes a buyer or seller may wish to have more time to fulfill a subject and will request to extend the date. This process requires an addendum, which should be prepared for you by your agent.
Once all of the subjects are satisfied and removed, the deposit must be paid within a certain time limit. The deposit amount and time limit will be outlined in the Contract of Purchase and Sale.