On what date do you wish the purchaser to close the deal? A period of thirty to ninety days traditionally elapses between the acceptance of the offer and the final closing date.
The Cash Deposit
A cash deposit in the form of a certified cheque, made payable to your lawyer "in trust", is required with every offer. It must be presented at the same time as the written offer. This cash deposit, or consideration, is the vendor's insurance that the offer is a serious one and that the deal will eventually be completed.
• If the buyer changes his or her mind for whatever reason and abandons the deal, the deposit is usually forfeited. In some cases, the seller may feel justified in taking the purchaser to court for further compensation (check this with your lawyer).
• The amount of the deposit is usually between a minimum of 5 and a maximum 10 percent of the purchase price. This rate may vary significantly, even in the same region, so ask your lawyer for the current rate.
• If the offer made by the purchaser is unacceptable to the seller, the deposit must be returned in full.
Weighing The Pros And Cons
After considering all the points of the offer, you must make your decision, and then accept, "sign back" (accept only if certain changes are made), or reject it altogether. If you find items that are unacceptable, consider the following points before you decide to sign back or reject the offer.
• Is the offer within your price range?
• Is the agreement conditional or unconditional upon financing? The latter is preferable, but you may still consider an offer that is conditional upon financing if the price is on the high end of your range.
• Beware of other conditions. Many people believe that they can buy property with no down payment. Use your common sense and heed the advice of your lawyer.
• Is the closing date suitable to your needs? If it doesn't interfere with your plans an earlier date protects financial gains in a rising market.
• Long closings can lead to problems in a falling market. If the market value of your property should fall before the deal is closed, the purchaser may choose to forgo the deposit. While you can sue the purchaser, the reality is that it could take years to settle and you will probably have to sell the house to someone else in the meantime.
• Do you agree with the inclusion and exclusion of fixtures and chattels?
• Are you expecting to get a more attractive offer? If so, what?