How to Make an Offer on a Home in Sault Ste. Marie
Making an offer on a home is an exciting milestone, but let’s be honest—it can also feel a little intimidating.
How much should you offer? What do all these documents mean?
Don’t worry; I’m here to walk you through it all so you can make a confident and informed offer on your dream home in Sault Ste. Marie.
Quick Summary: Steps to Make an Offer on a Home
- Preparing to Make an Offer: Know your budget, research comparable homes, and be ready to act quickly when you find the right property.
- The Offer Process in Sault Ste. Marie: Learn how offers work locally, including timelines and key steps to secure your dream home.
- Documents You’ll Need to Sign: Understand the paperwork involved, like the Agreement of Purchase and Sale.
- Negotiating Your Offer: Get tips on how to negotiate the best deal while staying within your budget.
- After Your Offer Is Accepted: Learn what happens next, from inspections to finalizing your mortgage.
- What If Your Offer Isn’t Accepted?: Know how to handle rejection and adjust your strategy for the next opportunity.
- Tips for First-Time Buyers: Get practical advice for navigating the offer process with confidence.
- Home Buying Scenario: See a real-life example of how the offer process works in Sault Ste. Marie.
Preparing to Make an Offer
Understand the Market
Before making an offer, it’s important to understand the current real estate market.
- Buyer’s Market: When there are more homes for sale than buyers, giving you more room to negotiate.
- Seller’s Market: When homes sell quickly, often above asking price, and competition is high.
Example: If you’re looking at homes in a popular neighborhood like the East End during a seller’s market, you may need to offer close to or above the asking price to stand out.
Set Your Budget
Stick to your pre-approval amount and factor in additional costs like closing fees and potential renovations
Example: A buyer pre-approved for $350,000 decided to cap their search at $330,000 to leave room for unexpected expenses.
Decide on the Key Offer Details
When making an offer, you’ll need to decide on:
- Offer Price: How much you’re willing to pay for the home.
- Deposit Amount: This shows the seller you’re serious; typically 5%-10% of the offer price.
- Closing Date: The day you take possession of the home, often 30-90 days from offer acceptance.
- Conditions: These might include financing, a home inspection, or the sale of your current home.
The Offer Process in Sault Ste. Marie
Work With Your Realtor
Your realtor will prepare the offer documents, present them to the seller’s agent, and negotiate on your behalf.
Types of Offers
- Firm Offer: No conditions are attached; it is more appealing to sellers but riskier for buyers.
- Conditional Offer: Includes conditions like financing or home inspection. This protects you but may be less attractive to sellers.
Tip: Most first-time buyers in Sault Ste. Marie opt for conditional offers, as they provide important safeguards.
How Does the Offer Process Work?
- Submit an Offer to Purchase: Your agent will help you draft an offer, including price, deposit amount, closing date, and conditions (e.g., financing, home inspection).
- Negotiate: The seller may accept, reject, or counter your offer. Be prepared to negotiate terms and price.
- Offer Accepted: Once accepted, you’ll provide the deposit and move on to fulfilling conditions.
Deposit:
A deposit is part of your down payment that is usually paid upon acceptance, meaning you have 24 hours to transfer the deposit amount to the seller’s real estate agent’s brokerage trust account.
Typically 1-5% of the purchase price but this can vary with each transaction.
Here is a full example of how the deposit, down payment, and mortgage are broken down:
- Deposit: $10,000
- Purchase amount: $500,000
- Down payment minimum 5%: $25,000
- Mortgage required: $475,000
- The $10,000 deposit comes off the down payment so you owe $15,000 for the remaining down payment and the bank takes care of the remaining balance through the mortgage of $475,000.
Closing Date
What It Is: The day ownership of the home transfers to you, and you officially take possession.
- Home Insurance: You must have homeowner’s insurance in place before closing. Your lawyer will require proof to finalize the sale.
- Utilities: Set up accounts for electricity, water, gas, and internet in your name, effective on the closing date.
- Final Payment: Pay the remaining down payment and closing costs.
Example: If the closing date is March 1st:
- You’ll need home insurance active as of March 1st.
- You’ll contact utility providers to ensure accounts are transferred to you starting March 1st.
Closing Costs
Expect to budget 1.5%-4% of the purchase price for:
- Legal fees: In Sault Ste. Marie the price for the real estate process is usually between $1,000 and $1,500 depending on the situation.
- Land transfer tax (LTT): First-time home buyers receive up to a $4,000 credit for the LTT so it usually covers the entire tax and you don’t have to pay if this is your first home.
- Home inspections: Between $300 to $500 for a home inspection
- Title insurance: Between $200 to $500 for title inspection
- Adjustments for property taxes and utilities:
- The buyer reimburses the seller for any taxes the seller has prepaid for the period after the closing date.
- If the seller hasn’t paid the taxes yet, the buyer might receive a credit and be responsible for the covering the amount when due.
- Utilities are adjusted based on actual usage up to the closing date.
- Sellers provide their final readings, and buyers start responsibility for bills from the closing date onward.
Documents You’ll Need to Sign
Agreement of Purchase and Sale (APS)
The APS is the main document outlining the terms of your offer.
- What’s Included:
- Offer price.
- Deposit amount and payment terms.
- Conditions (e.g., financing or inspection).
- Important dates and inclusions (e.g., appliances).
Example: If you’re offering $400,000 on a home in Sault Ste. Marie, your APS might include a $10,000 deposit, a closing date of February 7, 2025, and a condition for a home inspection and financing.
Confirmation of Co-operation and Representation
This document confirms who represents the buyer and seller in the transaction.
It ensures transparency about agency relationships.
FINTRAC Form
This form is required by Canadian law to verify your identity as part of anti-money laundering regulations.
- Why It’s Important:
It protects everyone involved by ensuring the transaction complies with federal laws.
Schedule B
This is an addendum added by the seller’s brokerage. It may outline terms for deposits, legal requirements, or additional clauses. A Schedule B is not always needed in an offer but the seller agent will provide direction if a Schedule B is needed in the offer.
Tip: Your realtor will review this carefully to ensure it doesn’t conflict with your goals.
Amendments
If changes are needed after the offer is signed—such as a price adjustment after an inspection—these are documented in amendments.
Example: A buyer negotiated a $5,000 reduction in price after the inspection revealed a minor roof issue, which was documented as an amendment to the APS.
Notice of Fulfillment
This document confirms that all conditions (like financing or inspection) have been met. Once signed, the deal moves forward to the next steps.
How I Help Simplify the Paperwork
Paperwork might not be the most exciting part of selling your home, but I aim to make it as stress-free as possible. Here’s how:
- Clear Explanations: I’ll go over every document with you, explaining terms in plain language.
- Time to Review: You’ll have plenty of time to read and ask questions about anything you’re unsure of.
- Organization: I’ll keep track of all deadlines and ensure everything is submitted on time.
Negotiating Your Offer
Common Scenarios
- Counteroffer: The seller proposes changes to your offer, such as a higher price or different closing date.
- Multiple Offers: In a competitive market, you may need to present your best offer upfront.
How I Help: I’ll analyze comparable sales to guide you on when to negotiate further or walk away.
Example: A buyer I worked with initially offered $370,000 on a $390,000 listing. After a counteroffer, they settled at $380,000, which was within their budget and fair for the market.
After Your Offer Is Accepted
Submit Your Deposit
The deposit is typically due within 24 hours of offer acceptance and is held in trust by the seller’s brokerage.
The seller brokerage will provide details on how to pay the deposit such as e-transfer or certified cheque.
Start immediately on the financing and any other condition you have in the offer.
You will only have a certain amount of time to fulfill the conditions and the financing condition can take some time.
Make sure to start right away so this will give you time in case a problem arises and have to solve it with your agent and mortgage provider.
Work Through Conditions
- Financing Condition: Submit all required documents to your lender for final approval.
- Inspection Condition: Schedule a professional home inspection to identify any potential issues.
Each condition has a specific timeframe (usually 5-10 days) for fulfillment. These are referred to as condition dates.
Example: A buyer discovered during the inspection that a furnace needed replacing.
They negotiated with the seller to cover the cost before finalizing the deal.
Decline, Waive or Fulfill Conditions
- Fulfilling: If the condition is met, the offer becomes firm. Example: Your lender approves your mortgage during the financing condition period.
- Waiving: You can choose to waive the condition if you’re confident it won’t be an issue. Example: Waiving the inspection condition if the home is newly built.
- Declining: If a condition isn’t met, you can walk away from the deal, and your deposit is refunded. Example: The home inspection reveals major issues, and you decide not to proceed.
Once conditions are met, you’ll sign a Notice of Fulfillment to move forward.
If conditions aren’t met, you can walk away, and your deposit will be returned.
Waiving a condition is when the condition is not fulfilled but you want to go complete the offer and buy the home.
Example: A home inspector found a small leak in the basement in the cold room.
Even though this is a concern to you, you decide to waive the inspection condition to proceed with the deal.
By waiving the inspection condition despite discovering a potential issue (e.g., a small leak in the basement), the buyer is choosing to proceed with the purchase without requiring the seller to address the issue or renegotiate terms based on the findings.
Key Considerations for Buyers
- Risk: Waiving conditions means you’re accepting the property “as-is,” including any unresolved issues.
- Cost: You may need to handle the repair yourself after closing.
- Urgency: Buyers sometimes waive conditions in competitive markets to strengthen their offer, but this should be done with caution.
If you’re unsure about whether to waive a condition, consult your realtor for guidance on the potential risks and benefits based on the specifics of the property and market.
What If Your Offer Isn’t Accepted?
Understand Why
The seller may have received higher offers, preferred terms, or fewer conditions.
Reassess and Try Again
Adjust your strategy for the next opportunity. This might mean increasing your deposit, offering a shorter closing date, or simplifying your conditions.
Tip: I’ll help you evaluate why the offer didn’t work and craft a stronger one next time.
Tips for First-Time Buyers
- Ask Questions: Don’t be afraid to ask about any document or term you don’t understand.
- Trust the Process: Making an offer can feel stressful, but I’ll guide you through every step.
- Stay Flexible: Prioritize what matters most but be open to compromise.
Home Buying Scenario
Let’s say you’re buying a home for $350,000:
1. Offer Components:
- Price: $350,000
- Deposit: $7,000 (2% of the purchase price)
- Conditions: Financing and home inspection (7 days)
- Closing Date: April 15th
2. Condition Management:
- Day 4: Your mortgage is approved, fulfilling the financing condition.
- Day 5: The home inspection reveals no major issues, so you fulfill the condition.
After the conditions are fulfilled your real estate agent’s brokerage will send all of the information to your lawyer and you will contact them to set up a date to sign the paperwork and go over the legal aspects of the transaction.
3. Closing Day Responsibilities:
- Pay down payment and other fees: $17,500 (5% of purchase price minus deposit) and pay the legal fees and land transfer tax for the transaction.
- Set up utilities: PUC (Algoma Power if living outside the Sault), Enbridge Gas, and internet providers for Sault Ste. Marie. You will set all of these services up right after you fulfill all of your conditions, same for home insurance.
- Date: The buyer is responsible for the closing date so coverage for your utilities, gas, and home insurance starts on April 15th.
4. Outcome:
You receive the keys to your new home and begin moving in!
Conclusion
Making an offer on your first home doesn’t have to be overwhelming. With the right guidance, clear understanding of the documents, and a strong strategy, you’ll feel confident every step of the way.
Ready to make your home-buying journey simple and stress-free?
Download your free buyer checklist to guide you through every step—from getting ready to buy to closing day. It’s easy to follow and helps you stay on track so you can feel confident and excited about your journey.
Get your checklist now and take the first step toward your new home!
Hi, I’m Ben, Your Local Sault Ste. Marie Realtor and I’ve Been Where You Are.
Buying your first home is more than just a transaction—it’s an exciting milestone filled with big decisions and dreams for the future.
As someone with deep knowledge of the Sault Ste. Marie market, I’ll help you find the best homes that fit your needs and guide you through every step of the buying process
Ready to take the next step? Let’s find your dream home today!
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Click the message icon in the bottom right corner to talk to me directly or book a free consultation with me below to discuss your home-buying needs.
I’ll use your checklist to find homes that fit your needs and lifestyle. Together, we’ll view top options and find your perfect home—saving you time and effort.
From offer to closing, I’ll guide you every step of the way so you can feel confident and excited as you step into your new home.
Ready to Get Started?
If you’re ready to take the next step and buy your home in Sault Ste. Marie, book a free buyer consultation today.
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