# Putting an Offer



## hedgehog12 (Feb 28, 2011)

Hi everyone,

I have a really simple question

1) step by step, how do I go about putting down an offer for a property (this is my first time buying a home)? 

The owner's listing price is $260,000. I've looked at the city assessment value and it's about 20k lower than this. I've also noticed some slight damage to the windows and interior floorboards that I prefer to get fixed (i don't really trust them to fix it). Do I have to list everything I want fixed on the offer itself? 

I do have a real estate agent, but I don't know them well. Just a number that was on the the newspaper ad. 

and also:

2) If I plan to withdraw some RRSP's for the down payment, what do I have to do to avoid the tax penalty? I've heard there is a form to fill out? 

I'm just really nervous and overwhelmed...
thanks in advance!


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## Four Pillars (Apr 5, 2009)

If you have an agent, then you put your offer in through them. Give them a call and tell them about the property and how much you want to offer. 

You can put conditions on the offer (ie fix the windows), but if there are things you want to do yourself, you just don't list them. 

I suppose if you are putting in a lower offer because the house needs work, you can communicate this to the sellers, but I don't think the offer sheet is the place for that - perhaps the agent can tell them verbally?

To make use of the home buyers plan, just request a home buyers plan withdrawal from your financial institution - they will have the right form for you.

Oh and.... http://www.moneysmartsblog.com/why-you-cant-trust-real-estate-agents-when-buying-a-house/


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## NotMe (Jan 10, 2011)

The city's assessment may not have any bearing on the actual correct pricing; you need to look at sales of comparable properties. Question: is your real estate agent different from the seller's real estate agent?


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## none (Jan 15, 2013)

I read this and am so happy to have sold my house and be a renter. Renting (thus far at least) is so drama free!


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## hedgehog12 (Feb 28, 2011)

Thank you everyone for the replies so far! It's been very informative..



NotMe said:


> The city's assessment may not have any bearing on the actual correct pricing; you need to look at sales of comparable properties. Question: is your real estate agent different from the seller's real estate agent?


Nope they are one and the same... is there something I should look out for?


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## NotMe (Jan 10, 2011)

hedgehog12 said:


> Thank you everyone for the replies so far! It's been very informative..
> 
> 
> 
> Nope they are one and the same... is there something I should look out for?



Your agent is 'representing' both the seller and you; but is being paid a % of the selling price. I would suggest you find a different agent.


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## Just a Guy (Mar 27, 2012)

Get a realtor unrelated to the property and the other realtor. Talk to a number beforehand to see if you trust them. Remember they are all commissioned salesmen, they only get paid if you buy, so none of them are truly on your side 100%. 

Next make a low offer that takes into account the repairs you want, plus some negotiation room. You don't want the seller making the repairs because they'll go the cheapest route and they don't care if they are done right. 

Finally, don't rely on city assessments, I know of places that are assessed +/- $100,000. The place has to be priced at a point where you are happy with it. If the value goes up or down long term, you're the one who has to live there and pay for it. If the assessed value is higher you can appeal it and get it lowered.


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## dougboswell (Oct 25, 2010)

Have you signed a buyer's agreement with the agent yet? If not follow the advice of others and get a different agent from a different firm. 

Have your agent, whomever, pull up 3 or 4 properties of comparable homes in the area that have recently sold and or some that are listed. By comparing size of lot, location, number of bedrooms and bathrooms etc. this will allow you to determine what the fair market value of the property should be. 

If you get a different agent insist that they present the offer, just not hand it to the listing agent to present.

In your offer make sure you include the following clauses:
i) subject to obtaining insurance
ii) subject to mortgage approval - do not sign off on the offere until you have 100% approval
iii) subject to a house inspection - schedule this after you have obtained your mortgage approval. You don't want to pay for a home inspection and the not get a mortgage approval

Most mortgage lenders also want proof that you have the amount for closing costs sitting in a bank before closing. Your your can give you an estimate of the costs

Good luck on the house


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## none (Jan 15, 2013)

..and remember, it's only a house. If this one falls through there will likely be a better one around the corner so don't get emotionally involved (or competitive) about it.

As others have states, your RE is likely a really nice caring person. Remember they are sales people and are trained to make you think they are your friend and are looking out for your best interest. You are about to spend a quarter MILLION DOLLARS. You have a due obligation to your future self to not screw this up.

- signed: Debbie Downer


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## Hawkdog (Oct 26, 2012)

this is good advice. I would just add to iii) if the inspector finds damage greater than x$ you have the right to pull your offer or adjust it accordingly. I use $1000.00



dougboswell said:


> Have you signed a buyer's agreement with the agent yet? If not follow the advice of others and get a different agent from a different firm.
> 
> Have your agent, whomever, pull up 3 or 4 properties of comparable homes in the area that have recently sold and or some that are listed. By comparing size of lot, location, number of bedrooms and bathrooms etc. this will allow you to determine what the fair market value of the property should be.
> 
> ...


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## Homerhomer (Oct 18, 2010)

Just a Guy said:


> Get a realtor unrelated to the property and the other realtor. .


Why get an agent in the first place, what knowledge do they offer which can't be obtained by browing internet for few hours?

OP, if you have not signed buyer agreement than I would suggest not getting any agent, represent yourelf, this way you can send in an offer that is discounted by 2.5% right of the bat because the seller doesn't have to pay buyer's agent premium which they are expecting to pay. Net to seller is the same, buyer pays less.


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## hedgehog12 (Feb 28, 2011)

Thanks for all the helpful tips!
Sorry I'm a bit confused here...

should I put down the offer first, or get pre-approved for a mortgage first?


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## Homerhomer (Oct 18, 2010)

hedgehog12 said:


> get pre-approved for a mortgage first?


this


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## Just a Guy (Mar 27, 2012)

You should know how much mortgage you can get before you go shopping. 

That being said, the "pending financing" clause will allow you to make the offer first, locking up the house, until you know if you can actually purchase it. 

I think questions like this show why you need a realtor. They can answer all these questions for you.


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## lifeliver (Aug 30, 2010)

hedgehog12 said:


> Thanks for all the helpful tips!
> Sorry I'm a bit confused here...
> 
> should I put down the offer first, or get pre-approved for a mortgage first?



A mortgage pre-approval is pretty much just a 120 day rate hold and an idea about how much of a mortgage you can get approved for. If the bank doesn't like the property which you purchasing or if your proof of income is different then the amount which you disclosed for your pre-approval then you will get declined. 

Please ensure that you include a subject to financing condition.


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## Jay (May 9, 2012)

NotMe said:


> Your agent is 'representing' both the seller and you; but is being paid a % of the selling price. I would suggest you find a different agent.


This is usually true even if you have your own buyer's agent - they are still payed a % of selling price.

Lots of other good advice in this thread though... I think for first time home buyers who don't have the time to do a lot of homework, a real estate agent can provide useful tips and advice - as well easily pull out comparable property values that you can use to make your offer. That said, I do feel that most agents receive a ridiculous amount of money for the little work they do - most of which, in reality, could be done by the buyer/seller themselves with a little assistance (and if the real estate boards were more open with their databases). The major incentive for the agents on both sides is just to get the deal done - regardless of the interests of the buyer or seller. That's not to say that there are some agents that are very good - looking out completely for their clients interests, but the system that they operate in them almost compels them to do otherwise if they want to receive and maximize commissions.

And never, ever, sign a buyer-agent agreement unless it is for an individual property that an agent is helping you to make an offer on. Those things are booby traps agents use to entrap unsuspecting buyers into paying them a massive commission regardless of the work the agent did. There are good agents out there that will not make their clients sign these - as they aim to retain their clients through good service rather than coercion.

After you've done it the first time, you realize how little the agents do (unless your agent is acting as your driver to house showings - in which case, it'd likely be cheaper to take taxis) - you'll realize a good real estate lawyer is far more important than the agent.


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## carverman (Nov 8, 2010)

The real estate agent's real purpose to sell the property and make a commission. On a 6% commission the seller pays, the listing broker and agent split 3%
and the selling agent and broker split the other 3%. If both the sale and purchase are handled by the same agent and broker..then they get to keep the
entire 6%. Not sure if this is a caveat emptor, but sometimes having another agent doing the running around to line up properties for you may be
to your advantage.

If you find a place and willing to make an offer and do so without ordering a house inspection, you may find more things wrong that need fixing once you
purchase the property. In that case, the "deal" you thought you got is not such a good deal afterall.

Some things on the house (property) that need to be checked or inspected before making an offer:
1. How old is the roof since it was last replaced? New roofs can cost up to $10K
2. How old is the furnace/heating system. New furnace can cost $5K plus
3. Is the basement dry with no foundation cracks.

These are always more important than just windows or floors that need to be replaced every 20 years or so.


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## marketwatcher (May 18, 2012)

I just had my place completed this week without an agent represent me. First, I would suggest you get pre-approve first. Second, I always use the accessment value as an offer number. It's buyer's market now and you will be seeing more houses on the market soon so don't be afraid if you don't get this one. 

If you don't know any good realtor, you can just represent youself and this could save you quite a bit of money. That said - at least 2% out of your purchasing number. 

How to offer - 
First, Ask the listing agent to send you the "contract of purchase and sale" - here has an example for your reference. There are 5 to 6 pages. I have only attached one for your reference. You can go through the website for more information http://www.mikestewart.ca/first-hom...er-10-the-contract-of-purchase-and-sale-dates. The seller would always come back and forth to do the counter offer so make sure your know how to play this game. 

If you are buying the condo, you should always subject to the documents and also subjec to mortgage if there is any.


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## mrbizi (Dec 19, 2009)

Homerhomer said:


> Why get an agent in the first place, what knowledge do they offer which can't be obtained by browing internet for few hours?
> 
> OP, if you have not signed buyer agreement than I would suggest not getting any agent, represent yourelf, this way you can send in an offer that is discounted by 2.5% right of the bat because the seller doesn't have to pay buyer's agent premium which they are expecting to pay. Net to seller is the same, buyer pays less.


Actually, the opposite is true. The seller will sometimes pay a _lower_ commission rate if the buyer is also being represented by the listing agent, and therefore may be willing to sell at a lower price. 

That said, there is obviously a conflict of interest in this scenario, so you are typically better off working with a different agent. It's hard to find an agent you can trust, your best bet would be to ask your friends or family for referrals.


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## Cal (Jun 17, 2009)

Get our own agent. They will represent you.


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## fergusonsd (Dec 30, 2012)

You need a real estate agent you can trust and not just one you found in the newspaper. Your agent will really do all the work for you including putting in the offer, creating the conditions, negotiating the deal and taking the pressure off you.I find those are very high profile and often you get stuck with another agent within the firm or they are really busy and don't get back to you. Where are you located? I have a great agent who works in the GTA. You can find his profile here: http://www.fergusonfinancial.ca/real-estate-agent/ His name is Bill McNally and I've used him to purchase my own home as well as my three rental properties. On that site you can also find out information on other members you might need including a mortgage broker, etc.

As for your second question, speak to your banking manager, they will be able to help you make the withdrawal properly.

Devon


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