Some great basics for first-time homebuyers from our friends at Zoocasa
1. Buyer views the home
With your real estate agent, you’ll be looking at all sorts of homes on the market. Your agent will be able to guide you, finding things you might have missed—fixtures, space, closets, etc. Also, be sure not to reveal too much on open houses; yelling out “I’ll pay anything for this place!” won’t help you when you get to the negotiation stage.
2. Buyer submits offer
Once you’ve chosen the home you want, you’ll make an offer in writing to the listing agent. This includes all the typical components of a buyer’s offer. This is also when you submit your proposed purchase price for the sellers to review.
Your offer has an irrevocability period, where the seller has to consider the offer in a certain period of time—typically by midnight that night or within 24 hours. In that time, the seller has to respond to the offer, either declining it or providing the buyer with a counter-offer, (and this counter-offer would have its own irrevocability period).
3. Both parties negotiate the offer
The buying and selling agents will then negotiate the offer. Once the seller has received your offer, they can choose to return a counter-offer at a higher price. This can go back and forth until the two parties arrive at a mutually agreed-upon price, closing date, and terms. The negotiations can switch to verbal between agents, if there’s going to be a lot of back-and-forth, but only changes in writing will be legally binding.
4. Seller accepts the offer
Once the buyer has offered the seller terms they’re willing to accept, the acceptance in finalized via both parties’ signature, and the deal is complete.
5. Buyer gives deposit
Your deposit is given to the seller’s agent to secure the offer.
The buyer has two choices when submitting a deposit: they can either give the deposit with their initial offer, called “herewith,” or “upon acceptance,” when the seller has accepted the offer. The second option is more common, especially in a buyer’s market, but herewith deposits are common in a seller’s market, where bidding wars are more frequent.
The amount of the deposit varies based on regional trends. Deposits in the Greater Toronto Area, for example, are typically up to 5%, whereas some small communities across the country only require a few thousand dollars. Your agent will know what’s expected to secure your offer.
6. Buyer completes due diligence conditions
Most offers will come with several conditions that need to be met before the sale can be finalized, or go “firm.” These include a getting home inspection, and confirming mortgage financing for the property. Conditions must be met within a set period—typically between two and five days.
A common condition in a condominium purchase is a satisfactory status certificate. These status certificates can take a couple weeks to arrive once ordered, followed by a 2–5-day period for the lawyer to approve it. Ask your agent about any other exceptions you may encounter.
7. Brokers and lawyers prepare for the completion date
Once conditions are met, the buyer and sellers begin to plan their move while the mortgage broker and real estate lawyer work on everything else. The lawyer will confirm the title is clean and ensure they’ve received all mortgage documents and insurance documents at least two weeks before closing. A few days before closing, the buyer and seller sign all paperwork with their lawyers.
8. Buyer receives keys on closing date
Your closing date is set in the agreement of purchase and sale. Typically, this is 30 to 90 days from the acceptance of the offer, but it can vary depending on the agreed-upon needs of the seller or buyer.
Closing transactions can take all day for the lawyers to finalize money and title transfers. It’s advised that the buyers arrange to move in after the closing date, as you may not get your keys until after 4pm on closing day.