#VerityAnswers – Offer Process Explained
When you submit an offer (not multiple offers or where you are competing against another buyer for a property) the process typically follows a series of logical steps.
Before we begin, let’s outline the players involved.
There is a Buyer and their realtor, the Buying Realtor.
There is the Seller and their realtor, the Selling Realtor.
The Buyer signs an offer and the Buying Realtor ‘registers’ it with the Selling brokerage. “Registering” is important because the brokerage now has a record of the offer and can inform any other buyers who call to ask about this property and if there are any offers.
The offer is now in the hands of the Selling Realtor. Before we proceed, we should explain how long an offer is ‘valid’. In the GTA, we call this the ‘irrevocable’ time and date. The offer is valid or open to be accepted by one party (meaning the buyer or seller) until X o’clock on X day. After that time and day, the offer becomes null and void and the process has to be started again.
Returning to the offer we submit, generally, one of three things can happen:
#1 – The offer is accepted (meaning, no changes. Seller likes what they see and accepts the offer ‘as is’).
#2 – The seller rejects the offer. The buyer may have to re-evaluate their strategy and find out why the Seller didn’t counter offer (did you offend them?).
#3 – There is a counter offer.
This counter offering could go on for hours or days and once there is mutual agreement on price and terms, there is one final important step called “Confirming acceptance’.
We want to highlight this final step and who signs the ‘confirmation of acceptance’. If we’re negotiating back and forth and the Seller says ‘I like everything about this offer, but I want $5000 more dollars’, they counter offer to the Buyer and the buyer says ‘I’m good with the extra $5000’ The BUYER then accepts the terms that the SELLER submit to them. The BUYER ‘confirms acceptance’ from the Seller. The person who makes a change to the offer can’t have final say. They have to counter offer to the other party and say, ‘here’s my change, do you accept’. If they do accept the change, they sign the confirmation of acceptance.
Once the offer is accepted, there are a number of other steps that happen, depending if there are conditions in the offer or not. But this overview was meant to give buyers and sellers a behind the scenes look at what happens when you submit your offer and bring transparency to a process that has been mired in smoke and mirrors in the past.