Real Estate Negotiations & How The Offer Process Works
When Buying A House Or Condo In Toronto Canada
As soon as your offer is prepared and signed by you, your real estate sales representative will contact the listing real estate sales representative to arrange to present the offer to the Seller.
An offer to purchase is not good forever but has a time limit date on it called an irrevocable date.
Within the irrevocable time period you have specified, the Seller can accept the offer as is, reject it, or modify it and sign it back to you with their own irrevocable counteroffer time specified.
If the offer is accepted, it should be given to your lawyer as soon as possible so that they can initiate whatever action is required.
If the offer is rejected, you may want to resubmit it at a higher price or with a different closing date.
If the offer is modified and signed back to you, it indicates that the Seller is interested in proceeding with negotiations. They may have signed it back at a higher price, a different closing date, with chattels or extras removed or added or any combination of these and other items.
You will have an irrevocable time and date by which you must respond before the Seller’s counteroffer becomes null and void. You can then accept the counteroffer as is. In this case, the transaction is done and you have a binding legal contract. You can reject the counteroffer and walk away from the transaction. You can modify the counteroffer and resubmit it with a specified irrevocable time and date for its acceptance. The process of offer and counteroffer can go on any number of times until both parties agree or one party walks away from the transaction.
As in any negotiations, there must be some compromise. There will be major items that you are not prepared to compromise. There will be less important items that you can afford to compromise on to get the home.