What does a vendor want in an agreement of purchase and sale?
Last week we talked about the kinds of clauses a purchaser might want to put into an offer to purchaser, for protection. The vendor has the right to reject the purchaser's offer, or to accept the offer as is, or to make changes to the offer and send it back to the purchaser as a counter-offer.
If the vendor accepts the offer or the purchaser accepts the counter-offer, there's a formal contract between the two parties, now known as the agreement of purchase and sale. The terms and conditions set out in the signed offer govern what the vendor and purchaser have to do right to the end of the transaction.
It's very common for a purchaser to make an offer conditional on getting financing, or approval to take over the vendor's mortgage, or a satisfactory home inspection report, within a certain time. The vendor should check with his real estate agent the length of time asked for is reasonable, and counter-offer with a shorter time if it isn't. Or a vendor may want to simply reject a conditional offer, especially if another purchaser is making an unconditional offer at a similar price.
Make a Counter-Offer
A vendor might want to make a counter-offer to the purchaser if:
* the offered purchase price seems a little low (if it's much too low, it's probably best to reject the offer because the purchaser isn't serious about playing in the vendor's league)
* the offered deposit is lower than customary for the area - a vendor wants a substantial deposit to make the purchaser think twice about backing out of the deal.
Deposits in the GTA are typically in the tens of thousands of dollars, although perhaps no more than a few thousand dollars in some other areas.
* the purchaser offers to buy chattels (such as appliances, drapes or rugs) that the vendor doesn't want to sell
* the offer requires the vendor to produce an up-to-date survey but the vendor doesn't have one - it could cost upwards of a thousand dollars to get it.
Look Over Offer Carefully
A vendor should always look over the offer to purchase carefully to make sure that the details are right. If there's a mistake in the offer, the purchaser may be able to use it later to get out of the deal or ask for a reduction in the purchase price.
* Check the description of the property to see that the lost size is correct and that any easements (such as a mutual driveway) over the property are mentioned.
* If the purchaser wants to assume the existing mortgage on the house, check that all the important information about the mortgage (such as outstanding principal, interest rate, pre-payment privileges, etc.) is there and is correct.
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