Real Estate Talk:
Any offer must be written since a verbal agreement is only valid if there is a credible witness
By Joseph Marovitch
Previously published August 29, 2019, in WestmountMag.ca
It is a fact if you can prove it. Proof is in written and signed documents or verbal agreements where one or more credible witnesses are present. There is nothing more annoying to a good broker than when the seller tells them that Joe the neighbour offered an amazing price to purchase their property. The offer being verbal with no conditions or deadlines is not a valid offer. This verbal inference has no deadlines, conditions or commitment and the buyer can change their mind anytime they choose. In today’s world, a handshake is not enough.
A good broker will insure two things occur at the very least. One is that when the buyer asks “How much will the property sell for”, the broker will answer: “As much as possible”. The second thing is the broker will never present an offer to the seller unless it is written, specifying conditions and deadlines of acquiring financing, inspection and any other required issues.
The offer being verbal with no conditions or deadlines is not a valid offer… In today’s world, a handshake is not enough.
Imagine your broker or a buyer verbally indicating to you that the buyer will purchase the property for an excellent price, then a week later telling you, the buyer must get a loan. Oh yes, by the way, the buyer has arranged an inspection. One week later the buyer tells you, “Sorry, but we found a better property at a lower price”. Weeks have passed. Other buyers have passed. Time has been wasted and you’re back at square one. A good broker will avoid this issue by qualifying the buyer and only accepting written offers that commit the buyer to inspection and financing conditions and deadlines.
In real estate, time is money and cannot be wasted.
OACIQ promise to purchase forms are very specific. They indicate but are not limited to the following:
- Who the buyer is
- Who the seller is
- The property that is for sale, with a description
- What is included in the sale
- What is excluded from the sale
- The price being offered
- The deposit being offered
- The amount of the mortgage the buyer is attempting to borrow from a financial institution, at what interest rate and for what period of time
- How long it will take to acquire the mortgage
- What will occur if the mortgage is not acquired by the deadline
- When the inspection will take place and in how many days the buyer must respond to the inspection report
- The number of days the seller has to provide documents such as certificate of location, deed of sale, taxes, electrical bills, oil bills and so on
- The number of days the buyer has, to review the documents and provide feedback
- The date of signing
- The date of adjustments and signing
- The date that the offer is valid until
‘A property is considered legally sold when all conditions have been satisfied, which is before signing.’
Note that any condition that the buyer does not respond to, in written form, by the deadline, is considered a satisfied condition.
A property is considered legally sold when all conditions have been satisfied, which is before signing. Should all conditions be satisfied, and the buyer does not show up at the notary, the implications can be costly to the buyer. However, it should also be noted that should all conditions be satisfied, and the seller does not show at the notary, the seller can also incur serious costs.
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Have a great week!
State of the market
I passed by a duplex for sale in NDG the other night as I was walking my dog. I saw the FOR SALE sign and a man was standing outside smoking a cigarette. I asked him if the duplex for sale was his?
It was. I asked how the sales campaign was going so far? He told me it was crazy in his opinion. The house duplex has been on the market for less than a week asking $800,000 and he has received several offers and is in the midst of a bidding war. I told him that sounds great. He told me it was not great. Surprised, I asked why?
He told me he thought the price of homes is insane. Even if he received his asking price, he was concerned he could not afford another home. He told me these real estate prices are being manipulated by corporate and government interests. I told him I was sorry to hear the bad news and then continued walking my dog as I scratched my head.
‘Prices are rising in Montreal and they will continue to rise as long as interest rates are low, inventory is low, and demand is high.’
I have had clients tell me the price is too low in an offer and we have countered higher. I have never, in my life, heard a seller complain that the price was too high, especially a situation where the offer is above asking.
The Canadian Real Estate Association (CREA) states that new mortgage rules initiated in 2018 are helping to improve the market along with lower unemployment, rising household income and a healthier population. Prices are rising in Montreal and they will continue to rise as long as interest rates are low, inventory is low, and demand is high. If you are going to sell in order to buy bigger, buy where property is less expensive. Move away from the core of the city. If you do not want to move further away, stay where you are and invest in the property you have or make sure you have the funds to buy up.
There is a famous saying, “They do not grow land”. Land is a finite commodity and an island like Montreal, surrounded by water, is definitely finite. Also, count your blessings. The man could have had no offers and sold for less. We are evolving as a city. Prices will rise, the city will expand beyond the St Lawrence River and life will go on.
Image: rawpixel.com from Pexels
Read also: Other articles by Joseph Marovitch
Joseph Marovitch has worked in the service industry for over 30 years. His first career was working with families from Westmount and surrounding areas, hosting children between the ages of 6 to 16 as the owner and director of Camp Maromac, a sports and arts sleep away summer camp established in 1968. Using the same strengths caring for the families, such as reliability, integrity, honesty and a deep sense of protecting the interests of those he is responsible to, Joseph applies this to his present real estate broker career. Should you have questions please feel free to contact Joseph Marovitch at 514 825-8771, or email@example.com