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Remax West Realty Inc,, 1678 Bloor St W., Toronto, ONM6P 1A9
Remax West Realty Inc,, 1678 Bloor St W., Toronto, ONM6P 1A9
make an offer

Whether you’re a seasoned real estate investor or a first-time buyer, making an offer on a property is a big step in home buying. You’ve gotten pre-approved for a mortgage, you’ve narrowed the search to a property you love and now you’re ready to bite the proverbial bullet and make an offer. Here’s everything you need to know when you make an offer on a property in Toronto and the GTA.

Before you make an offer you should already be well aware of the market conditions, and craft a plan for handling the negotiations. Do as much of your due diligence as possible before making the offer. Things such as pricing out any major renos, checking for any outstanding permits, school district, etc. Try to find out why the seller is selling and their motivation.

What’s an offer?

An offer is a formal proposal from the buyer to purchase a property from a seller. Importantly, if the seller accepts the offer it forms a binding agreement, regardless of whether or not a deposit has been delivered yet. All contracts in Ontario are bound by the principle of good faith by all parties. This includes an obligation by all parties to perform the contract honestly. Even if your offer is conditional on inspection or financing you as the buyer must fulfill those conditions in good faith.

What happens when a buyer makes an offer?

When you make an offer to a seller, the seller has 3 options. They can accept, decline, or counter (also called a sign back in the industry). Any changes to the original offer by the seller means that the original offer you made is no longer valid.

Read the pre-printed parts of the agreement before you sign.

Signing an offer to purchase a property is a BIG deal. Read the pre-printed parts of a standard Agreement of Purchase and Sale (APS) with your Realtor and/or lawyer and make sure you understand what you’re signing. Too many times I hear clients saying “I trust you”. While I appreciate the confidence in me I prefer that we go over it together so that you understand the contract.

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    Caveat Emptor

    An important factor when you make an offer on a property in the GTA is understanding that the principle of Caveat Emptor applies. Caveat Emptor is the principle that the buyer is responsible for the due diligence of a property before a purchase is made. Sellers must disclose latent (i.e. hidden) defects that may render the property uninhabitable. A latent defect is not apparent to someone who is exercising reasonable care in doing an inspection. Having said that, there is plenty of gray area in this domain so ensure that the clauses in your contract reflect what is important to you. For example, if you are worried about stigma – and you should be – you need to ensure your Realtor is writing in the appropriate clauses to protect you.

    Key parts of an offer

    Irrevocable time

    The irrevocable time in an APS is the period during which the buyer CANNOT revoke the offer. As a buyer, you want to give the seller sufficient time to review the offer. If you give them too much time you are risking that another buyer may come forward and create an unfavourable situation for yourself. The strategy behind how long the irrevocable time should be is best decided on a case-by-case basis with your Realtor.


    A deposit must be made to the listing brokerage, who will then place the deposit into a trust account pending the closing of the transaction. You can provide the deposit along with the offer. This is preferred by sellers as it indicates a higher level of commitment on your part. It is a strategy mostly used in a multiple offer situation. Alternatively, you can provide the deposit within 24 hours of acceptance of the offer. A deposit in the GTA is typically 5% to 20% of the purchase price. An article I recently wrote explains everything you need to know about deposits.


    Fixtures are any items that are permanently attached to the property. For example, a bathtub, sink, or toilet permanently plumbed in would be a fixture. Technically, anything bolted to the building is a fixture while some items screwed in can be deemed as chattels. For example, a TV wall mount may be considered a chattel if a dispute arose between buyer and seller. As this can often be an area of contention at the time of closing, it is always best to write all inclusions in the offer.


    Chattels, unlike fixtures, are not deemed to be part of the property and must be specified in the offer if you want them included in the sale. The following are some items you may wish to include in the offer: light fixtures, draperies, fridges/freezers, stoves and ovens, washers & dryers, storage sheds, central vacuums, etc. Items that are rented (typically hot water tanks) are to be assumed by the buyer if they’re listed as rental items in the Agreement of Purchase and Sale. If rental items include a/c units, furnaces, etc. it’s important to review the rental agreement before making an offer.


    There are many options when it comes to conditions. In more complicated transactions such as multi-family homes, vacant lots, commercial properties or assignment sales there are a lot of potential conditions that would be in the offer. In this case, we will only focus on resale single-family residential properties, such as a condo or a detached house.

    You can make a firm offer (no conditions) to purchase a home. This is preferable to the seller but does present many risks to the buyer. If the firm offer is accepted, the buyer is expected to close as per the agreement. If you choose to make a firm offer on a property ensure that your financing is certain and do your due diligence before making an offer to mitigate risk. Two common examples of this are doing an inspection before making the offer or in the case of a condo – have your lawyer review the status certificate before the offer. That way you are not taking on additional risk while putting yourself in the best position to secure the property. This strategy is typical in strong seller’s markets where you are competing with other buyers for the same property.

    You can also make a conditional offer to purchase a house or a condo. Common conditions are a home inspection, financing approval, or subject to lawyer approval of the status certificate (condos only). Once you have fulfilled the conditions, you remove the conditions from the agreement and it is considered firm.

    In a buyer’s market you can see a conditional offer on the sale of the buyer’s home. This is especially the case in move-up properties. This condition protects you, in the case that you are not able to sell your own property. The length of this condition is usually much longer than other common conditions. It can range anywhere from 30 to 60 days depending on what you negotiate.

    Often, the seller will insist on having an escape clause in this scenario. What is an escape clause? An escape clause is for the benefit of the seller. With an escape clause in the APS, another buyer can make an offer. If the seller wishes to accept the new offer, they have to give the original buyer the opportunity to waive or fulfill their condition (usually within 24 to 48 hours). Should the original buyer remove the condition, the property is theirs. If they don’t, the seller is open to “escape” from the first offer and accept the second one.


    There are many clauses that can be included in an Offer to Purchase. This is best discussed with your Realtor and/or Lawyer on a case-by-case basis. Some common clauses that I see in Toronto are:

    • Warranty that the home was never a grow op.
    • Warranty that the home doesn’t have certain stigmas. Examples are – suicide, major crime.
    • How many visits you get before closing.
    • Appliances and other chattels are in good working order on closing.
    • Warranty that there are no special assessments.

    In closing, you have to remember that there is a balance between protecting yourself and making an appealing offer to the seller. The more conditions and clauses you have, the less appealing it may be to the seller. It’s important to work with a Realtor that understands how to present some of these and create as much leverage as possible to negotiate a favourable price and terms for you. Your offer also has to reflect the market conditions that you are in.

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