The offer is ticking. Every Agreement of Purchase and Sale has an expiry date. This is typically found on the last page of the document. You should take note of this time frame.
“How long is the offer left open?”
How long do you have to respond to the buyer?Depending on your market the offer may be left open for 2 days or 2 hours. Remember that you are in control. If you need more time to formulate a response or contact your lawyer, ask the buyer to extend the time for acceptance.
Take Note of the Time Frame of Offer
Stay Organised. Over the course of the offer there will be a number of different dates you will need to keep track of. Start organised and stay organised. Put the dates with what is due in your Google Calendar with reminders turned on, or whichever organisational tool you already use.
What is a Condition?
A condition is a way out for your buyer.
Sprinkled throughout your agreement of purchase and sale will be a number of conditions the buyer will need to accomplish before you can consider the property SOLD.
These are a way out for the buyer to walk from the deal if they need to, leaving you to put your property back on the market and re-list it as active.
If a buyer walks within the condition phase they will typically get their deposit back and be on their way.
The Big 3
The most common conditions.
Financing – Most buyers need it and will not waive the condition until it is absolutely secured. Some agreements of purchase and sale are very specific with regards to financing and will include the actual rate the buyer wishes to obtain along with the principal amount they are looking to achieve (amount they would like to put as a down payment).
Lawyer Approval – The buyer’s lawyer will do a complete title search on the property, make sure their are no leans or bad debt, as well as check for easements and do a complete review of the offer. If the lawyer finds any red flags you can bet they will be absolutely bringing it up with their buyer. It is also important to note that because of client confidentiality a lawyer can instruct their buyer to walk away from the deal and they do not have to provide a reason (within the condition period).
Inspection – The inspection is a cause for a lot of head aches for sellers. So much so, we have devoted the whole next lesson to negative inspections. Be prepared for a negative inspection. It is not the inspectors job to write a report about how great the property is. They are only looking for negatives. One way you can combat the inspection is get a pre-inspection done prior to listing. You will be able to make any changes necessary that may hurt you during the offer and better prepare yourself for the negotiations.
Everything is Negotiable
Don’t like a certain request from the buyer? Change it.
The initial you offer you receive is not set in stone. Everything is negotiable. Now that you are aware of the impact a long conditions phase can have taking your property off the market, make sure you check those dates to ensure they are a length that work for you.
If you are worried about your buyer not being able to acquire financing in a competitive market, have them waive that condition.
You are in control. You have the power to dictate the course of the offer. Don’t let the other side push you around.