Buying your own home can be a real obstacle course. Difficulties and a lack of knowledge of existing practices are a concern for those looking to purchase a house, condo or other type of property. The steps you'll need to anticipate and the many people you'll have to deal with can intensify your stress.

In the midst of all this, a critical moment in the acquisition process is the offer to purchase. It appeals to the emotional as well as the rational, creating doubts and the need for security. But what is it, really? 

As the name suggests, an offer to purchase is a document in which you offer to buy a property at the price you set. The seller can refuse it or make a counter-offer, which is why it's so important to get it right.

Steps before the purchase offer

Before making an offer to purchase, certain steps are necessary:

Determining your purchase budget

This step allows you to make a realistic purchase offer. Your purchase budget usually depends on the amount of equity you have as well as your borrowing power. 

Paying attention to this step will prevent you from wasting time making an offer on a property that's out of your budget. It'll also save you the disappointment of having your offer accepted but being unable to finance it.

To quickly determine your purchase budget, you can use our online calculator.

Estimating the property's value

Of course, you can always choose to make an offer that's slightly lower or higher than the value of the property, but this estimate will allow you to do so from a place of wisdom. 

It also allows you to ensure that the seller's asking price corresponds to market conditions.

Our advisors can help guide you through this step.

Investigating the property

To do so, look at all documents relating to the property and the minutes of the Homeowners Association (HOA) in the case of a condominium. This will help you avoid unpleasant surprises and will allow you to understand whether you have room for negotiation.

Format and content of a purchase offer

An offer to purchase doesn't need to be in any particular format, but it's advisable to put it in writing, so conditions and limitations can be attached to it. In writing means that you can also send it via email, which can save a lot of time when you're dealing with other potential buyers.

Download a sample offer to purchase

To set yourself apart from other buyers, you can write your offer in a more detailed and personal way. In light of increased demand, a "cover letter" is becoming more and more popular, whether for a rental application or for an offer to purchase. 

Your sales agency, if there is one, will be able to advise you on aligning your wishes with the seller's expectations. Otherwise, in the event of a private sale and as a complementary service to the brokers, we can still support you. 

What about the offer price? Financed or direct sale? Will there be major work required, and what will it cost? Can it be paid for? 

The offer should include factual details that reflect your wishes without "offending" the seller. The price is important, but so is the type of sale, as it leads to decisions such as the move-in date. Additionally, if work needs to be done, either out of necessity or for personal preferences, an estimate needs to be drawn up and submitted to the financial institution granting the loan. The latter may then revise the value of the offer or, conversely, determine that the work does not add value to the property.

The most important thing when making an offer to purchase is to start from a well-thought-out starting point for dialogue, both to avoid losing the sale by making an offer that's too low for the seller, but too high for the creditor to offer you financing.

Our support during the purchase offer process allows us to ensure that your expectations are realistic and to give you the best chance of becoming a homeowner. We analyze the property beforehand without making a precise estimate, but rather a holistic valuation, i.e., one that's based on the sale price of comparable properties. The decision to settle on a certain price is yours, but it needs to be realistic and consistent with your goals. From one expert to another or from one bank to another, there can be significant differences in the value of an object. 

The offer to purchase may, in addition to the price, specify conditions such as:

• its period of validity 
• the closing date 
• details of prospective work or submission of documents 
• the vacating of all occupants
• remediation
• taking out a mortgage
• …

One should be aware that too many stipulations can lead to a refusal of acceptance, even if the price was in line with the seller's expectations. By stipulations, we mean, for example, obtaining a loan, a building permit or including a binding clause for the seller.

To add more credibility to your purchase offer and to give the seller confidence, you can attach a loan pre-approval. This non-binding document certifies that you have the financial ability to purchase the property in question.
 It can also be independent of any purchase initiative and simply indicate your maximum financial capacity. 

Our mortgage calculator allows you to generate a pre-approval in just a few clicks.

Get my preapproval certificate online 

There's nothing preventing you from preparing your loan application in advance and obtaining a confirmed loan approval based on the analysis of your application. This allows you to be ready to proceed quickly once your offer to purchase has been accepted.

Make an appointment to prepare my application

Commitment related to the purchase offer

An offer remains a letter of intent. Only an approved offer is binding in terms of a real estate acquisition. However, a poorly substantiated offer will make it less likely to be accepted. 

On the other hand, you'll also have the option of withdrawing your offer without giving a reason. Nevertheless, via mutual respect, a valid reason is always welcome when withdrawing your offer.  

In conclusion, a purchase offer is only binding when all the elements are in place for the establishment of a sales contract, which, once signed, will legally bind you to the seller.