You’ll never forget the moment you first made an offer on a house. Following the whirlwind of emotions, visiting several – and in some cases dozens – of homes, you finally think you’ve found the right one and are ready to make an offer. It’s exciting and stressful. We hope this guide will take some of the stress out of this situation so you can focus on your emotions.
How to make an offer on a house in Canada
I remember exactly where I was when I made an offer on the first house that became my home. I drove two and a half hours away from my current home to see several farmhouses in my price range. After watching a few and realizing that none of them were for me, I was starting to lose hope.
The last house on my route, however, was different. Spacious but easy to manage, needed some updating but nothing I couldn’t do myself, and had a nice large property where I could enjoy a fire pit. It was perfect. Driving home and discussing the house with my partner, we decided to make an offer. Fortunately, she works in the real estate industry and supported me throughout the entire process. If it weren’t for her, I probably wouldn’t have had any idea how to make an offer on a house in Canada.
Here’s what you need to know.
How to write an offer for a house
Fortunately, your real estate agent handles the actual writing of the offer. Work with them to determine what your offer includes, such as price, closing date, inclusion, and whether your offer is based on conditions such as financing and home inspection.
In highly competitive markets, some agents may advise against including certain conditions. Work with your agent to prepare an offer that is convenient for you. Failure to inspect your home can be dangerous.
Some things that are usually included in your offer:
- Financial situation
- Home Inspection/Condo Status Certificate Review
- Number of buyer visits
- Additional movable property (inclusions)
- Checking what equipment is owned and what is rented
- The condition in which the house should be left
- Inclusion of real estate research
- How much will your deposit be
- Your purchase price
- closing date
When can you make an offer on a house?
It depends on how the seller wants to handle offers on their property. Some sellers accept offers at any time. Others set an offer date in hopes of creating a bidding war (usually to get a higher selling price). However, just because there is an offer date, some sellers may be open to buyout (intimidation) offers. Talk to your agent again and develop a strategy that will make you feel comfortable and confident that your offer will ultimately be accepted.
Your agent can learn how the seller wants to manage offers and work with you to help put you in the best position to accept your offer.
Can I withdraw an offer on a house?
Your offer will have an irrevocable date and time, which means it cannot be withdrawn during this period. After this date, the offer expires. The seller can re-sign the contract, adjusting any terms (usually the price or add-ons). At this point you are evaluating their sales pitch.
If your offer includes conditions (such as financing or inspection), there is an agreed time frame for these conditions to be met or waived. If the terms are not what you want, you can request a mutual consent to back out of the home purchase (which must be signed by all parties and brokerages).
What is a deposit and when should it be submitted?
The payment proves good faith in finalizing the transaction. The deposit is usually 5% of the purchase price, but may vary depending on the region where you are purchasing. Ask your agent for advice on what is acceptable.
Payment of the deposit will be made within 24 hours of acceptance of the offer. Typically, deposits are delivered in the form of bank statements, certified checks or wire transfers.
Note: A deposit is an amount paid in advance to secure a real estate purchase and sale agreement. The down payment is money you pay the seller to qualify for a mortgage loan.
Also check out our mortgage down payment calculator.
When should you buy home insurance?
Before you close on your home, you must purchase homeowner’s insurance. Call your insurance broker to see if you can bundle your home insurance with any of your existing insurance products. Don’t have a broker? Call; is free and can give you advice on how to reduce your overall insurance costs.
Do you need title insurance?
Although title insurance is not required, it is recommended. Title insurance protects you in the event of any title problems. Your lawyer can arrange title insurance if you choose to obtain it.
The most important thing
Making an offer on a house is exciting – but it doesn’t have to be stressful. Seek advice from your agent, ask lots of questions, and hopefully your offer will be accepted and you’ll be on your way to moving into your new home.
