The Complete Guide to Making an Offer on a Home in BC

The contract you will sign

Offers in BC are written on the standard Contract of Purchase and Sale, the form used across the province for residential resale. It covers the price, the deposit, the completion date (when the money and title change hands), the possession date (when you get the keys), the adjustment date for taxes and strata fees, what is included (appliances, window coverings, that hot tub), and your subject conditions. Your agent fills it in from your instructions, but you should understand every line, because every line is enforceable once the seller signs.

One thing many buyers do not know: in BC you have a Home Buyer Rescission Period on most residential purchases. After the contract is accepted you have three business days to walk away for any reason, for a fee of 0.25 percent of the price. On a $1,000,000 home that is $2,500. It is a safety net, not a strategy, and it does not replace proper subjects.

Subject clauses: your protection

Subjects are conditions the offer depends on. Until they are removed in writing, you are not firmly bound. The ones I almost always recommend:

• Subject to financing. Even with a pre-approval, the lender has to approve this specific property. Appraisals come in low more often than people expect in a shifting market.
• Subject to inspection. A proper inspection in the Fraser Valley runs a few hundred dollars and takes about three hours. It has saved my clients from a buried oil tank, a failing roof and a basement that only leaks in November.
• Subject to reviewing documents. On a strata property this means the Form B, two years of minutes, the depreciation report, bylaws, the budget and insurance summary. On a detached home it means title, the Property Disclosure Statement and any permits.
• Subject to sale of your current home, if you need the proceeds. Sellers like it least, so pair it with strong terms elsewhere.

In a buyer's market you can usually take seven to ten business days to satisfy subjects. In a competitive situation you may be asked to shorten them. Shorten them, but do not drop the ones that protect you from a mistake you cannot afford.

Deciding the number

The asking price is a marketing decision. Your offer should be based on what comparable homes have actually sold for in the last two or three months, adjusted for condition, lot, exposure and the things that only show up when you stand in the house. I prepare a comparative market analysis for every offer my buyers write, and I show them the sales, not just the conclusion.

Then we read the situation. How many days has it been listed? Has the price been reduced? Is there a competing offer, and is the listing agent telling us that in writing? Has the seller already bought? Each answer moves the number. In the softer market we have had across South Surrey and White Rock lately, I have negotiated meaningful reductions on homes that sat for sixty days, and I have also told clients to pay the asking price on a well-priced home that had three parties circling. The skill is knowing which one you are looking at.

Deposit, dates and closing costs

The deposit shows the seller you are serious. In the Fraser Valley it is typically around 5 percent of the price, paid by bank draft or wire within a day or two of subject removal, and held in trust by the listing brokerage until completion. It counts toward your down payment. Larger deposits are a negotiating tool in a competitive offer, but understand that once subjects are removed the deposit is at risk if you fail to complete.

Completion is usually 30 to 90 days after acceptance, and possession is often a day or two after completion. Match these to your mortgage rate hold, your lease end and the seller's own move. Flexibility on dates has won offers for my clients that a higher price would not have.

Budget for closing costs separately: property transfer tax (use the calculator to check your exemption), legal or notary fees, title insurance, adjustments for prepaid taxes and strata fees, home insurance in place before completion, and GST if the home is new. The closing cost estimator puts it all on one page.

What I tell buyers before we write

• Know your walk-away number before the negotiation starts, not during it.
• Shorten subjects if you must. Do not remove the ones that protect you from a mistake you cannot afford.
• Dates and deposit are negotiating tools. Use them before you reach for more money.
• Read the Property Disclosure Statement yourself. Ask about anything that is blank.
• Your lawyer or notary should be lined up before subject removal, not after.

If you are getting ready to write an offer on the Peninsula and want a second set of eyes on the comparables and the terms, that is the part of the job I enjoy most. Call or text me and we will go through it together.