How to Make an Offer on a House in Ottawa
Written By Liam Swords
I know the Ottawa home market can be a challenging landscape to navigate if you don’t have the right team behind you. At Liam Swords TEAM, we often work with clients who are a bit confused and intimidated by the home-buying process.
Most people only put an offer on a house a couple of times during their lifetime, so that is where we step in to help. Keep reading as I go over everything you need to know before you make an offer on a house in Ottawa.
How to Make an Offer on a House in Canada
The moment a buyer finds their dream home the first thing they ask is how to put in an offer on a house. Before getting into the details of making an offer, let’s quickly go over how buying a house in Ottawa actually works.
This will help you understand some basic terms in the home buying process. Keep in mind that every home purchase is a little different, but this is what you can generally expect.
Step 1: Set Your Price
After you’ve toured a couple of houses and found one you really like, it is time to put in an offer. The first step is to choose a price to offer the seller.
Whether you are an Ottawa first time home buyer, or this is your tenth property, you probably already have a budget in mind. However, you don’t necessarily want to hit the max, and a good real estate agent will help decide on a fair offer.
Typically an offer contains a request to purchase the home at a lower price than it is listed at, but that’s not always the case. Buyers in high-demand areas can choose to put in an offer that is equal to or higher than the list price to help ward off competition. Additionally, you can also make other requests in your offer, like asking for a repair or for the owner to leave furnishings.
Step 2: Discuss Conditions
When making an offer on a house in Canada, you are entering into a contract with the seller. There are critical details within these documents that ensure you are protected in case something goes wrong during the process.
House offer conditions like financing and inspections are nearly always included in the contract, to ensure you can back out in the event your mortgage doesn’t get approved or an inspector finds a major problem. However, your agent may recommend adding other contingencies, like the length of time the offer is valid.
Step 3: Secure Deposit
In Canada, buyers are expected to submit a deposit with their proposal. The amount of the deposit does vary, but 5% is pretty average. The deposit is given to your Ottawa real estate agent when putting an offer on a house, rather than at the time of closing. The deposit is essentially a sign of good faith. Some buyers do choose to put down a larger deposit to help show they are serious.
Step 4: Prepare to Negotiate
Once you’ve put money on the table and signed the offer, you are stuck playing the waiting game. Sometimes buyers take a while to respond as they wait to see if any other offers come in. In a best-case scenario, your offer will be accepted, but don’t expect that right off the bat.
Most of the time you will have to do some back-and-forth negotiations. I always tell buyers to think about how they will counter when putting in an offer. If you haven’t thought about it yet, now is a good time to consider how you will respond to various possibilities before getting a counteroffer.
Pre-planning your response will help keep emotion out of the equation. If all goes well, you and the buyer will settle on a price that works for both parties and you will go to closing on your new home.
How Much to Offer on a House in Canada
I am often asked how much I should offer for a home, and there is no one-size-fits-all answer. Every house is different with unique circumstances.
Sellers often have the same challenge when listing a home on the market. The truth is that a home is worth what someone is willing to pay for it (and what an appraiser says it’s worth).
To determine how much you should offer, you need to start by figuring out what the home is worth to you. Typically, home buyers offer less than what they actually think the home is worth.
From there, the buyer and seller will usually meet somewhere in the middle. Your real estate agent should also pull comparable sold listings in the area to help guide your decision.
5 Considerations Before Making an Offer for a House in Ottawa
Okay, now that you know the answer to “how do you make an offer on a house,” I want to go over five things that create some confusion for buyers.
1. Understanding the Deposit When Making an Offer on a House
To start, the average deposit on a house offer in Ottawa is $10,000. If you’ve previously bought a home in another part of Canada that may sound cheap, and it is.
The cost of living in Ottawa is much lower than in other parts of the province, like Toronto. However, you really don’t need more than $10,000 in most cases.
Keep in mind that the deposit must be made within 24 hours of submitting an offer. Now, you don’t need to go get $10,000 in cash from the bank to hand your agent.
However, you should have the money in your account and ready to go before you begin looking at houses.
Your deposit is held in a trust until closing. If you back out of the sale for a reason not listed in your contract, you forfeit the deposit. At the closing, your deposit is applied to the purchase price of the home.
2. Choosing a Closing Date When Putting an Offer in on a House
Another common question I get asked is how soon does a house go to closing in Ottawa? The short answer is that homes typically take 60 days from the time you agree on a price to go to closing.
That may sound like a long time, and it is something to consider if you have a lease that is expiring soon. However, you really don’t want to rush into buying a house or buying a condo in Ottawa and end up with something that is filled with problems.
If you want to speed things up or slow it down, it’s a good idea to discuss the closing date when making an offer.
3. How to Write an Offer on a House and Personalize It
One thing that is really growing in popularity in our area is sending a family letter with your offer. The idea of the letter is that you are appealing to the seller’s emotional side.
When you buy a home, you probably won’t see the seller until the day of closing as all negotiation is done through the real estate agents. A letter simply puts a face to go with the numbers.
A family letter doesn’t have to be very complicated, but it can really help your offer stand out. In the letter, you could include a couple of things you like about the home. For instance, you can mention the location, the backyard, or just the vibe you get.
You may also want to mention that you want your children in the school district or that you’ve always dreamed of living in Ottawa. To really pull at the heartstrings, consider adding a family photo to your letter.
4. What Conditions Should I Put on a House Offer
I previously mentioned that it usually takes 60 days to close on a house in Ottawa. The long period leaves a lot of potential for buyer’s remorse.
However, you only have about seven days to back out of the deal, and only for very specific reasons. Meaning, you can’t simply walk away from it because you found another house you like better.
You can, however, get out of the deal if a contingency allows for it. For example, it is normal to include contingencies for inspections and financing.
Therefore, if your financing falls through you can get out of the contract. Similarly, if an inspection report comes back with a major problem you don’t want to deal with or the seller isn’t willing to address, you can also walk away.
It is also common to have a contingency for legal review, so you can have an attorney look over the contract. Some people choose to shorten the conditional period to five days to make their offers more attractive. However, you need to have ample time to get a proper inspection and work with your lender.
That is a lot to accomplish in just a few days, especially if you work full-time. Fortunately, a good real estate agent will be able to walk you through the process and make it as stress-free as possible.
5. Completing the Final Walkthrough
Between making a deal and preparing to go to closing there isn’t a whole lot you need to do. However, there is a lot of time for something to happen to the house, which is why a final walkthrough the day before closing is critical.
At Liam Swords TEAM, we write the final walkthrough into the contract when putting in an offer, so there is no funny business.
The purpose of the final walkthrough is to ensure the home is in the same condition and that any last-minute tasks are complete.
If something is wrong, like the movers putting a hole in the wall, you have time to consult with your real estate agent and attorney to negotiate a remedy before the closing.
Making an Offer on a House in Ontario: Closing Thoughts
Buying a house can feel like a rollercoaster ride with plenty of ups and downs. But it is all worth it when you get the keys on closing day.
We’ve talked a lot about buying a home and moving to Ottawa, but Liam Swords can help you put in an offer to purchase real estate throughout Ontario.
Liam Swords is an accomplished real estate agent in Ottawa, having sold over 1,000 homes. As the team leader of Liam Swords Team, he combines extensive market knowledge with a commitment to client satisfaction.
