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Contract of Purchase & Sale Explanation for First Time Vancouver Home Buyers
Updated June 26, 2019 by Mike Stewart PREC
Episode 7 of the First Time Home Buyers Guide was an overview of the Contract of Purchase and Sale.
Now let’s go through the offer in detail starting with Price!
Price in a Real Estate Offer – Section 1
The widely held perception is that an offer has how much the Buyer is willing to pay and if the Seller accepts the Buyers price its a done deal.
Many first time home buyers think a real estate offer to buy property in Vancouver is a simple document that only is about price.
Not quite, as I will explain.
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In Section 1 on Page 1 of the Contract of Purchase and Sale below, you will see the Buyers proposed purchase price is $500,000.
In most cases, this amount is how much the Buyer is initially offering to pay.
In some cases this price is accepted by the seller and there is an accepted offer on the property. (But this does not mean the sale will go through! More on this later!)
In most negotiations on properties in Vancouver, this section of the Contract changes several during negotiations, but we’ll get to that later.
Price in a Real Estate Offer is Written Numerically & Alphabetically?
Yes! In Section 1 of the Contract of Purchase and Sale, the price is written numerically and alphabetically so there is absolutely no confusion as to the exact amount the Buyer is willing to pay the Seller.
The Seller Accepts the Price, How do I Pay?
When you buy a product in a store you usually pay with cash or a card on the spot at the cashier and you’re on your way.
Property purchases tend to be the largest purchase most people make over the span of their lives. Not too many people have several hundred thousand dollars in cash in their bank account to pay for such purchases.
For most first time home buyers, loans and mortgages need to be arranged and the money for the purchase needs to be turned over to the Sellers in a reliable, safe, lawful, and efficient manner.
(Duffel bags full of cash don’t quite fit the bill here See FINTRAC)
Do I have to Pay as Soon as the Seller Accepts?
NO, but the Buyer will have to pay a deposit (See Section 1 of the sample Contract of Purchase & Sale above & the next episode for details) in the form of a bank draft or wire transfer (Cash & certified cheques are not acceptable) within 7-14 days of an accepted offer that is generally 5% of the purchase price in Vancouver (More on deposits in the next Episode).
When the Buyer pays the purchase price (The Completion Date) is negotiable can happen any date the Buyer and Seller agree on. (More on this later as well.)
Looking for Advice on Selling a Condo in Vancouver? Watch these Videos on How to Sell a Vancouver Condo!
Be Sure to Check out First Time Home Buyer Vancouver Episode 9 – The Deposit on a Real Estate Offer!