Making Canmore real estate offers is something most people don’t do very often. But for me, its something I help clients do every week!
In truth, most folks may only deal with making or accepting a real estate offer one or two times in a decade. Unless you are buying and selling properties very frequently, most people purchase their home and then forget all about the offer process for 5, 10 or even 20+ years. So it’s not uncommon to be a bit unsure of what is involved and everyone’s role. Having the right knowledge about what to expect, what key items mean, and how to protect yourself can make a big difference in having a positive real estate experience.
I definitely don’t expect to cover everything about offers today. In this article though, I’d like to break down a few key points many new clients ask me about when it comes to offers:
As always, if you’re wondering about the local Canmore real estate market, making offers, or just curious about a listing you’re seeing, feel free to connect with me directly. I’m always available via text, email or call – and always happy to help!
The full Alberta Real Estate Association purchase contract can run beyond 8 pages, and we won’t cover all of that here (thankfully!). But there are a few essential items that we need to pay close attention to in any purchase offer for any property. They are:
An offer is a contract between two parties, with a lot of money and a property at stake. Paying close attention to the items above will help you to avoid pitfalls. Having an agent who knows the proper way to word the above items can mean the difference between getting what you want, and giving everything away. Choose wisely and ask questions!
No! As a buyer, if you are making a conditional offer, you’re free to make as many as you’d like. Let’s say you go and view three properties – you’re welcome to make offers on all three. Why not? In a free marketplace, the Sellers are certainly doing their best to get as many offers as they can, from all kinds of buyers. Looking out for your own interest means doing what is best for you.
That being said however – I only coach clients to make an offer on a property they are truly interested in. We’re not trying to waste anyone’s time – buyer or seller.
When you are a Seller, if you accept a conditional offer, you are taking on the risk. You are promising your property to the Buyer for a set period of time (usually two weeks), in which they are to fulfill their conditions. But you cannot know if they can or will meet these conditions, or exactly how qualified they may be to do so. They may also continue to shop around for other properties. But, most offers will be conditional. And you want to Sell – so you must take this small risk.
When you are a Buyer, the main risk you take in the market is not making a move. Missing out on a property you love may mean you never see something similar ever again, as each property is unique. But – you always have the choice to make no choice at all. And you can take as many swings at the ball and wait as long as you want for the perfect opportunity. Its just impossible to say what will come up, and when.
Short answer – yes. If the offer you make is conditional, your deposit should be 100% refunded if you choose not to proceed. Often, the only cost to you is any cost your bank has for a wire or bank draft (as deposits must be certified funds), and perhaps a small processing fee for the brokerage trust holding the deposit (maybe $15).
Regarding the amount: this can be important, but not as big of a deal as many folks think. The deposit can be a chance to “show how serious you are”, and some buyers make huge deposits (I’ve seen $300,000). This is really unnecessary; if anything, you are only putting your cash at risk for no real benefit. To any Canmore Seller, price & conditions matter most in an offer. Superfluously sized deposits only tie up your cash and put it at risk in case something unthinkable happens – and the Seller gets to keep it. Deposits should range from $25K-$75K in most cases, and depend on the price of the property.
These two items are perhaps the most important parts of any contract. This is where all the magic (and pain) happens.
A Condition is something the contract is subject to, for the benefit of the Buyer or the Seller. A condition must be very specific about what is to be done, by whom, and by a specific date. Examples of standard conditions include Financing, Condominium Document Review, and a Property Inspection. A condition must be waived by the due date, or the contract will collapse. These are firm and written in stone. If there is something you want to ensure is part of the contract process, before the deal firms up, it should be a condition.
A Term is something a bit more broad, as the entire contract is essentially terms. But I will often add additional, custom terms when crafting a contract. A term is a fixed, non-variable agreement between the Buyer and Seller. Typically, it says who is agreeing to what, and exactly what recourse there may be if the term is not completed. For example: The Buyer and Seller agree that the Seller is to repair or replace the refrigerator prior to the close date. If this is not completed, the Buyer will be entitled to hold back $1000 from the purchase price.
There are many dates in a real estate contract. Often, I find folks confuse the “close” date with the “condition” date by mistake. Let’s take a moment to clarify the most important dates in a Canmore real estate offer:
OK – this is where the rubber meets the road. How do you arrive at a price? How do you effectively negotiate a price?
A few things will always be true about pricing:
As a Seller, you can list your property for whatever you want. $50 Million dollars? Sure. Go for it. But no agent will take that listing. Unless someone will actually pay your price, you could just be wasting your time. So price wisely and with strategy.
Sometimes, Buyers will drill down on all of the “comparables”. They will dig up data, past sales, anything to justify exactly what the science is saying this property should be worth. Guess what? The Seller does not care. They chose their price for a reason. There is only so far they will potentially go down. Regardless of what you believe, the price must be agreed upon.
Sellers will often be scared after just a week or two on market. They have chosen to sell, prepared their property, and hitched their dreams to their next move. A failure to sell in a reasonable timeframe could really throw a wrench in the gears of their plans. With this in mind, a well timed offer with an acceptable price could appear as a lifeline to them.
For Buyers, it all comes down to opportunities. How many have they seen? How many have they missed? Is it likey that a similar property will come up again in the near future? If they feel the opportunity is about to pass them by, tough negotiation can fall by the wayside. And frankly, it might be worth it.
When I work with Buyers and Sellers, I always coach them to control their emotions and make rational decisions based on the information in front of them. I’m happy to report that more often than not, my Buyers pay less than the asking price. Many of my Sellers also see offers above their list price as well.
The local property market in Canmore is complex and can be extremely competitive. I work closely with Buyers and Investors daily to evaluate opportunities and make offers that get accepted. Avoiding friction during the negotiation process between parties is so key to seeing a win-win situation.
Even if we’re dealing with multiple offers, over-asking price situations, first time buyers or first time investors, I’ve done it all – many times over. During the offer process, my focus is always on my client (and not the opposing party).
If you’re curious about Canmore real estate, the offer process in Alberta, or any listings you’re seeing, please feel free to reach out to me personally. I’m always available via text, call or email and helping folks make sense of our marketplace is what I do best.
Cheers!