First Time Buyers: They’ve accepted my offer, now what?
Congratulations! They’ve accepted your offer which is a big step in the process, but there are still a ton of things to take care of during the conditional period before the deal becomes firm. Here is a condensed list of what you’ll need to do:
1. Provide the Deposit Cheque- Once an offer has been accepted, the buyer usually has 24 hours from when the Agreement of Purchase and Sale has been signed to deliver the deposit check to the seller’s brokerage. If the agreement is signed on a statutory holiday or on a Saturday or Sunday the buyer will have 24 hours from the beginning of the next weekday to produce the cheque. The cheque should be certified by your bank or should be a bank draft and is made out to the seller’s brokerage. It is held by that brokerage in a special account to be applied to the buyer’s down payment on closing. If there are conditions on the offer and they are not waived by the buyer, then the deposit cheque is returned in full to the buyer with no deductions.
2. Find a Good Real Estate Lawyer- If you’ve bought a condo or a condo townhouse your agent will almost always include a condition on your agreement to state that your lawyer will review the status certificate for the condo corporation. The status certificate is the document that gives details on the amount of money in the reserve fund for repairs on the building and will state whether there is an expected increase in the amount you pay each month. It can also show pet restrictions on the building (some condos do not allow dogs of a certain breed or size and some do not allow pets at all). This can be an important document to show how well the building or complex is managed and can indicate future issues with maintenance fees.
This condition can sometimes take several weeks as it takes time for the document to be sent and then reviewed by the lawyer. During this time the deal is still conditional. Your agent will likely be able to refer you to a trusted real estate lawyer that they have worked with in the past. Click the following link to see our list of preferred suppliers: http://www.thamteam.com/Preferred-suppliers.
3. Arrange Financing – In most situations (except if you are competing with others for the house) your offer will also include a condition that will allow you a few days to be approved for financing on the home you have purchased. You may decide to use a bank that you have worked with in the past, use a referral from a trusted source, or shop around for different lenders. The financing condition will allow you to examine what kind of payments you’ll have to make on a mortgage each month and help you feel comfortable with the purchase you just made. If you are not approved by any lenders during the conditional period you have the opportunity to back out of the agreement and you will receive your deposit back in full.
Even after you have been approved for a mortgage by one lender, you may still shop around for lower rates and different packages up until a couple weeks before your closing date. Again, your agent will likely be able to help you with that. We have a mortgage specialist at Scotiabank that we have worked with quite closely and referred several clients to. Mary keeps us updated on when rates are expected to go up often several days beforehand so we can keep our clients in the know and lock in rates before they purchase. Check the Preferred Suppliers link above for Mary’s information.
4. Hire a good home Inspector – It is essential that you hire a good home inspector to ensure that the home you’ve just purchased is in good condition with no major defects. Major defects might include structural damage, foundation cracks, mould, water damage, leaks etc. They will also check all the appliances, electrical, water systems and the roof to ensure that everything is in good working order. Finding an inspector who you trust to be thorough and honest is important. You will likely need the inspector to do the inspection in the first five days following your purchase. If there are major defects, you have the option of adjusting the price on the offer, or adjusting the offer to ensure that the defects are fixed before you take possession of the home. You also have the option of backing out of the deal. Check out the “How Much Money Do I Need?” post in the series to find out information about the cost of an inspection.
5. Waive conditions- Once you have done all the necessary things to satisfy yourself that the conditions have been met on your offer, you will have to sign a waiver before the conditional period is over to ensure that the deal becomes firm. Your agent will then send the waiver to the seller’s agent.
Are you a present buyer or potential buyer with questions? Contact Melanie at email@example.com for more information.
Check out the next post in the series: What do I Have to do Before my Closing Date?