Real Estate Blog

A profusion of purchase offers

Happy is the home seller who is inundated by promises to purchase, each one more attractive than the last! She can already envision herself running to the bank with a smile on her face.

But wait! There is a furrow in the brow of our seller, a slight indication of stress that is casting a shadow over the picture... Should she accept the first offer? How can she avoid disappointing the children whose photos accompany the promise to purchase? And how much time does she have to unravel all of this?

In today's market, where there is a significant shortage of properties for sale, the phenomenon of multiple offers is widespread, and can indeed become confusing. Fortunately, you can count on your broker's experience and sound advice to help you sort it all out!

Your broker's job

First of all, it is important to know that the terms "offer to purchase" and "promise to purchase" refer to one and the same thing. The official form of the Organisme d'autoréglementation du courtage immobilier du Québec (Québec's self-regulatory organization for real estate brokerage, better known by its French initials OACIQ) is called the promise to purchase, hence its familiar nickname in the industry: the PP.

Your broker receives the promises to purchase. He or she has a duty to show you all of them, no matter how absurd they may seem. He or she must do so without regard to the order in which they were received —there is no such thing as priority— or the circumstances surrounding them. Because the decisions are yours to make.

Your broker is also obliged to disclose to collaborating brokers or to prospective buyers that there are other bids on the table, but without revealing their content.

This last obligation, dictated by the Real Estate Brokerage Act, is often in the news these days. Some insist that blind bidding drive up prices. They argue for transparency and point to Norway as an example, where properties are auctioned, just like works of art. Bids are even transmitted by text message! This is a political issue that we would prefer to avoid, but it is known that the government has no intention of legislating to this effect.

So, you have three options faced with the promises to purchase presented to you:
• Accept one of them;
• Make a counter-offer to one of the buyers;
• And even reject them all!

It should also be noted that as long as the offer is neither accepted nor rejected, a buyer may wish to increase it. To do this, they should use the Enhancements Prior to Acceptance form.

When and how to choose?

Every offer has a time limit, normally between 24 and 72 hours, but this is at the discretion of the parties. This is the time you have to consider each offer. Because price is not only the only thing that counts; the conditions are just as important. In addition, make sure that the prospective buyer is serious and has the necessary funds to proceed with the purchase. In most cases, a serious buyer will have accompanied their promise to purchase with a deposit on the selling price.

If the acceptance deadline expires or if you do not respond, an offer becomes void. But you can always make a counter-offer. As this is the equivalent of a new promise to contract, it can be made even after the promise to purchase has expired.

And beware of verbal agreements; they are equivalent to a contract! The signed paper will then only formalize the agreement.

They say the devil is in the details... Especially in the details of a PP. That's why, now more than ever, it's important to enlist the services of an experienced broker. I am at your side to assess the impact of the conditions of each of the PPs, to help you analyze the information they contain and to manage the various deadlines associated with them. 

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