In our previous discussion, we covered the crucial steps of pre-qualification, research, and home screening. Now, let's dive right into the next stage of this exciting journey.

Offer Negotiation Stage

So, you've done your homework, evaluated various properties, and finally decided on the one that aligns perfectly with your family's goals. Now, it's time for the offer stage. Your Realtor will prepare an offer, keeping your best interests in mind. The art of negotiation plays a significant role here. Your Realtor will review recent sales of similar properties in the same area and analyze how the subject property compares.

The outcome of this analysis is the Fair Market Value range, which represents what a willing seller and a willing buyer would agree upon in today's market. A well-prepared offer will have a negotiation strategy built in, starting at a certain point and allowing room for discussion.

Negotiations may involve back-and-forth exchanges between the two brokers. Once the terms are agreed upon by both parties, a contingency period begins. This period typically lasts five business days in the GTA and covers conditions such as financing and home inspection.

During this time, you'll provide an earnest money deposit to the listing brokerage, which is held in trust. If the conditions are not fulfilled, this deposit is returned to you. If the conditions are met, the deposit is deducted from your commitment to the bank for the purchase.

Offer Agreement Stage

In the contingency period, you'll reach out to your financial institution or mortgage broker with all the agreement papers and supporting documents. They'll work on securing your firm approval, which involves evaluating both your financial situation and the property itself.

Lenders want to ensure that they're financing a property at a reasonable price, so they'll appraise it. If the appraisal comes in lower than the purchase price, you might need to cover the difference. During this period, you'll also arrange for a qualified home inspector to evaluate the property's condition.

Once the financing is approved, you'll provide a Notice of Fulfillment to the buyer, confirming that your financing conditions have been met. In the meantime in doing your inspection, if some latent defects are discovered, the offer again is brought to the negotiation table by your Realtor. As we want to ensure that as a buyers broker we see that our clients aspect is taken care of and they are not impacted with immediate repair cost after closing. An example of such issue could be mould presence in the attic, or crack in the foundation wall, or the air conditioner not providing the cooling, metal door missing in the cold room, water pressure in the pipes very low, drains in one of the washrooms clogged, or a crack in the garage floor, a gas leak in the window panes etc. Once these things are agreed and sorted between the both parties, we move on and make the deal firm by fulfilling the finance conditions as well. For the deficiencies noted and agreed between the Seller and Buyer, sometimes the Seller will undertake to get them repaired by a qualified contractor in advance of completion and we put it in writing in our agreement as an amendment to our original purchase agreement. Or sometimes the Seller and Buyer will agree on a negotiated amount and the Seller will offer a further credit in the purchase price, and the Buyer accepts that provision, by a similar amendment to change the price.

Title Transfer and Completion 

This is the final stage and the major role is played by your Solicitor. Both Seller and the Buyer in a Real Estate Transaction legally will require to have their own lawyers, due to inherent conflict of interests in these transactions. If there are any deficiencies in the title of the property, for instance there could be lien which was registered 8 months ago on a property by a contractor who didn't get the dues by the current owners for the work done. Such deficiencies will be found by the Buyers Solicitor and they will advise the Sellers Lawyer to ensure they are cleared before completion. And once they are cleared, they will search again to see the title is free and clear for the buyer to assume. In Real Estate when the two parties agree on a purchase price, the Buyer is responsible for completing their part to provide the funds promised in full on the completion date and the Seller is obligated to provide a clear title to the property which will be transferred to the Buyer in exchange of the full amount agreed. 

The whole process of adjustments goes between the Seller and Buyers lawyer, suppose you were purchasing a condo and the condo fees is prepaid for the full year by the current owners and you are closing in the month of July. In this case for the balance of the year, the prorated value of the condo fees will be credited back to the Seller upon closing. On the other hand if they had outstanding dues since Jan for condo fees, they will be credited back to the Buyer on closing. This adjustment process is done for property tax payments as well as utility bills etc. Majority of these activities take place on the completion date itself. 

And once the closing is done the keys are exchanged and provided to you as the new owner of the property and title is transferred in the registry records as well. At this time I also want to mention that closing date will always happen on a business day Mon-Fri when the Land Registry Office is open, and its not a public holiday.

Wish you all the very best! Reach out to our dedicated team at Elixir for any queries you have in Real Estate and we will do our best to help.

Mudit Mehta 

Broker of Record

ELIXIR REAL ESTATE INC.

Off: 416-816-6001 | [email protected]

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