(Continued from Part 1)

6)     Considering Offers in Real Estate Transactions

When engaging in real estate transactions, it is essential to comprehend the intricacies of the offers being made. While your real estate licensees are there to assist you through this process, having a solid understanding of the different facets of offers can be immensely beneficial. Here are some key aspects to consider:

         I.         Terms: Terms refer to specific details outlined in the purchase contract that both the buyer and seller agree upon. These terms can encompass various elements, including:

    1. Possession Date: This signifies the day when the buyer will officially take ownership of the property.
    2. Inclusions and Exclusions: Inclusions are items the buyer wants to be included with the property, such as appliances, while exclusions are things the seller intends to take, like curtain rods or TV mounts.
    3. Time for Acceptance/Expiry of Offer: If the buyer sets an expiration time on their offer, it is crucial to respond or counter-offer before this deadline. Otherwise, the offer lapses, and the buyer might not extend or create a new one.
    4. Pre-Possession Inspection: This term grants the buyer the opportunity to inspect the property with their real estate representative before finalizing the purchase. It ensures the property's condition aligns with what was initially offered. 

       II.        Conditions: Buyers often include conditions in their offers to safeguard their interests. Common conditions involve financing and home inspections. All conditions must have expiry dates, allowing the buyer adequate time to fulfill them. If conditions aren’t waived in writing by the specified date, the contract becomes void.

     III.         Deposits: Buyers usually provide a deposit along with their offer, indicating their commitment to the purchase. The deposit's amount can reflect the seriousness of the buyer. Details about the deposit’s custodian, whether it's the seller, buyer’s brokerage, or a third party like a lawyer, are outlined in the Offer to Purchase.

    IV.         Communication for Acceptance: Clarity regarding communication channels between the involved parties is crucial. The buyer's offer must specify how communication should occur, whether in person, via fax, or email, ensuring seamless interaction.

      V.         Holdbacks: A holdback occurs when a buyer retains a portion of the purchase price until specific seller responsibilities are fulfilled. Reasons for proposing a holdback can range from unfinished renovations to unresolved property boundary issues. However, holdbacks must be formally agreed upon between buyer and seller and cannot be unilaterally decided upon at closing.

Understanding these elements empowers both buyers and sellers, facilitating a smoother and more transparent real estate transaction process. By being well-informed, you can actively engage with your real estate licensees, making informed decisions and ensuring a successful property transaction.

7)     Negotiation

Negotiations play a pivotal role in the process of selling your property. After a buyer submits an Offer to Purchase, several scenarios can unfold, each requiring careful consideration.

Acceptance, Rejection, Counteroffer, or Ignoring the Offer: Upon receiving an offer, you have the option to accept, reject, counter, or ignore it. If you accept an unconditional offer, congratulations, your property is sold. If the offer contains conditions, the buyer's real estate professional will work to fulfill these conditions by the specified expiry date. Rejecting an offer prompts the buyers to decide their next steps, either submitting a new offer or looking elsewhere. Making a counteroffer involves discussing unsatisfactory terms with your real estate professional and proposing revised terms that align with your preferences. Ignoring an offer is akin to rejection unless the buyer included no expiry date, leaving the offer open until formally withdrawn.

In every situation, your real estate licensee will guide you through the options, outlining the advantages and disadvantages of each. Ultimately, the decision rests with you.

Multiple Offers: When multiple buyers present offers simultaneously, you, as the seller, have the authority to determine the process. This includes deciding whether to disclose the multiple offer situation and the terms and conditions of offers to other potential buyers.

Your real estate licensee's role is crucial. They must promptly inform you of the multiple offer situation, explain the available options and strategies, and recommend careful evaluation of each offer. Buyers may choose to modify, maintain, withdraw, or reconsider their offers based on this information. It's imperative to respect buyers' requests for confidentiality in their offers, and your licensee must follow your lawful instructions throughout the process.

Navigating negotiations and multiple offers demands strategic decision-making and adherence to ethical guidelines. Your real estate professional plays a key role in ensuring a smooth negotiation process, offering expert advice tailored to your specific situation.

8)     Finalizing a Purchase and Preparing for Possession

Congratulations on the successful sale of your home! With the buyer's conditions waived, your focus now shifts to the final steps before possession day.

The first crucial step is to engage the services of a qualified real estate lawyer. It is advisable to initiate this process well in advance of the possession date to allow ample time for the lawyer to review and prepare all necessary documentation. Both your real estate agent and mortgage broker will require the lawyer's details as they will be directly providing essential documents to facilitate the transaction.

A pivotal moment in this process occurs a few days prior to possession day when you will meet with your lawyer. During this meeting, your lawyer will meticulously go through all legal documents with you. This includes discussions about title transfers, closing costs, disbursements, and, if applicable, settling your mortgage. At this juncture, you'll be required to sign documents that effectuate the transfer of property title to the buyer upon the receipt of their purchase funds. To ensure a smooth process, remember to carry valid photo identification to this meeting. Some lawyers may require two forms of ID, such as a passport, driver’s license, or credit card, so it’s prudent to confirm their specific requirements.

Following this meeting, your role primarily involves waiting for the possession day. During this waiting period, you can take several preparatory steps:

                     I.        Forward your mail: Make arrangements with Canada Post to have your mail redirected to your new address.

                   II.       Disconnect utilities: Notify utility providers to disconnect services such as electricity, gas, and cable.

                 III.       Hire a moving company: If you're using a moving service, finalize the arrangements with them for a smooth transition.

Despite the imminent possession day, your responsibilities as a homeowner persist. Maintain the property by ensuring the lawn is cut, sidewalks are shoveled, and crucially, do not lapse on your home insurance coverage. It’s important to note that as the seller, you remain responsible for insuring the property until possession day, even if you have vacated the premises before the buyer takes over. If your situation involves a period where you won’t be residing in the home, consult your insurance company to address any specific concerns regarding coverage.

While it's rare, there exists a slight possibility that buyers, having initially waived their conditions, might back out close to the possession date due to unforeseen circumstances such as sudden financial crises, critical illness, or mortgage funding issues. In such an unfortunate event, it becomes a legal matter necessitating professional legal advice, beyond the scope of what your real estate agent can provide. Therefore, it's essential to consult your legal counsel to navigate the complexities of such a situation effectively.

9)     On the possession day

On the day of possession, which usually occurs around noon, the buyer officially acquires the property and receives the keys. If a pre-possession inspection was agreed upon in the Offer to Purchase, the real estate agents of both parties will coordinate this inspection. During this inspection, it is expected that all attached goods and inclusions specified in the agreement are in place. Additionally, appliances should be in the same working condition as when the buyer made their offer. 

The property is also expected to be in a similar state of cleanliness as when the buyer first viewed it before making their offer. While there isn't a strict standard for cleanliness, it is advisable for the seller to make reasonable efforts to ensure the property is clean and presentable. 

If, during the pre-possession inspection, the buyer discovers that the property is not in the agreed condition, or if something has been removed, the buyer’s real estate agent will contact the seller’s agent to discuss possible solutions. Ideally, any issues should be resolved before the mortgage funds are transferred, and the keys are handed over. Failure to resolve these issues at this stage might require legal intervention, potentially causing delays in the possession process.

After taking possession, if the buyer finds that the property is significantly different from what was agreed upon or if items have been removed, the buyer’s real estate agent will likely initiate communication with the seller’s agent to seek resolution. If a satisfactory resolution cannot be reached through negotiation, it may escalate into a legal matter between the buyer and the seller.

Since the buyer has already advanced the purchase funds by the time they receive the keys, any unresolved issues could necessitate legal action. In such cases, the involvement of lawyers becomes essential to resolve the dispute between the parties.