WHAT TO EXPECT DURING NEGOTIATIONS
Please realize that most transactions entail a considerable amount of negotiation between the initial offer presentation and the final sale.
The agent’s objectivity, experience, counsel, and professional demeanour are indispensable in these situations. Price is not the only negotiable item in the sale of a home as potential buyers can place any terms they choose in the offer. You determine your acceptability of each of these terms and then put your position in writing back to them.
Typical elements within offers to be considered are:
PRICE:
Your salesperson’s intimate knowledge of the current market is invaluable in helping you to decide whether to accept the price the Buyer is offering or to counter with a higher one. They will also assist you to quantify the value time places in your decision, ie. will a higher offer offset the potential additional carrying costs of a longer possession?
MORTGAGE CONDITION
Many buyers arrive prequalified at the negotiating table; however, many mortgage lenders place a requirement on the buyer’s prequalification approval that the house they end up buying must be appraised. Some buyers have not been qualified and need this condition in order to finance the purchase.
HOME INSPECTION CONDITION
Inspection conditions are frequently contained in offers in Toronto. Usually the conditions give Buyers a few days to have the property inspected by a licensed home inspector to identify potential structural or material problems and help the Buyer budget for future repairs. If the inspector uncovers any major issues then you and the Buyer must negotiate what, if any, issues will be addressed and who will pay for them. Negotiations subsequent to the home inspection are usually undertaken only for items or issues of a substantial nature.
DEPOSIT
Although deposits are not mandated by Ontario law to be a specific amount, in Toronto they typically are quite substantial. They are considered to be an indication of good Buyer faith and covenant. An amount equal to five percent of the purchase price is considered a good deposit.
The deposit money does not immediately go to the Seller but it is placed in the Sage Real Estate Commission Trust account and held there pending completion of the transaction at which time it gets credited to the Buyer. Interest thereupon typically accrues to the benefit of the Buyer.
COMPLETION DATE
This is the date when ownership of the house changes hands and typically the date that the Seller vacates and the Buyer takes possession of the property. If an offer gets presented that accommodates your particular closing date requirements it might be an important factor in deciding to negotiate or accept that offer.
