Making an Offer
Making an Offer on a Home in Edmonton
You’ve done the work, explored communities, and after countless viewings, you’ve finally found it: the perfect home. But finding the home is only half the battle—winning the negotiation is the other half. An offer is much more than just a price; it’s a strategic document that communicates your seriousness as a buyer. Here’s how to structure an offer that puts you in the strongest possible position.
The 4 Key Elements of a Strong Offer
In Alberta, your offer will be written on a formal Real Estate Purchase Contract. It has many clauses, but it boils down to four key strategic elements.
- The Price: A strategic price is based on a Comparative Market Analysis (CMA), which analyzes what similar homes in the same neighbourhood have recently sold for. A strong offer is one that is justified by the data.
- The Conditions: These are your safety nets. The most common are the Financing Condition and the Home Inspection Condition. An offer with fewer conditions is stronger, but removing them carries significant risk.
- The Deposit: A sum of money you provide to show you are a serious buyer. It is part of your down payment, not an extra cost, and a larger deposit can signal financial strength.
- The Possession Date: This is the day you take ownership. An offer that aligns with the seller’s preferred timeline can be a powerful negotiating tool, sometimes even more so than price.
Pre-Offer Due Diligence: 6 Key Questions to Ask
Before deciding on the details of your offer, gathering more information can give you a significant negotiating edge. Here are six questions to ask the seller that can offer additional insight.
1. Why are you selling the house?
The seller’s motivation can help you evaluate the “real value.” Are they relocating for a job and need a quick sale? Or are they just testing the market? The answer can help you adjust your offer strategy accordingly.
2. How much did you pay for the home?
While the original purchase price doesn’t determine the current market value, it can sometimes provide context, especially if the home was purchased recently. However, the current value is always dictated by recent comparable sales.
3. What do you like most and least about the property?
This can reveal interesting information. What a seller likes most (e.g., a “happening community”) might be a negative for a buyer seeking quiet. What they like least might highlight a minor issue you can live with or a major one you can’t.
4. Have you had any major problems with the home in the past?
Sellers in Alberta are obligated to disclose major hidden defects, but asking directly about past issues is always a good idea. Has there been a past leak? Even if repaired, it’s worth noting for your home inspection.
5. Are there any nuisances or problem neighbours?
Find out about any persistent neighbourhood issues like barking dogs, heavy traffic, or even planned changes to the community, such as a new development nearby. This gives you insight into the daily life of the area.
6. How are the public schools in the area?
Even if you don’t have children, the quality of local schools has a major impact on a neighbourhood’s value and desirability. Asking the seller for their perception is a good way to gauge this.
For a complete overview of the buying journey, return to the Ultimate Guide to Buying a Home in Edmonton.
Ready to Start Looking?
Each step in the home-buying journey is an important one. To see how this topic fits into the complete process, review our Ultimate Guide to Buying a Home in Edmonton.
Financial FAQs
Have more financial questions? Contact us for a free consultation.
How much income do I need to afford a home in Edmonton?
As a general guideline, lenders often use a Gross Debt Service (GDS) ratio of 32%. This means your total monthly housing costs (mortgage principal and interest, property taxes, heating) should not exceed 32% of your gross monthly income. For example, to afford a $1,800 monthly housing payment, you’d need a gross monthly income of around $5,625.
How much down payment do I need in Canada?
The minimum down payment depends on the home’s purchase price. For homes under $500,000, the minimum is 5%. For homes between $500,000 and $999,999, it is 5% on the first $500,000 and 10% on the remaining portion. For homes of $1 million or more, the minimum down payment is 20%.
What government programs can help me buy my first home?
First-time homebuyers in Canada can take advantage of several programs. The Home Buyers’ Plan (HBP) allows you to withdraw from your RRSPs tax-free for a down payment. There is also the First-Time Home Buyer Incentive, which is a shared-equity program that can lower your monthly mortgage payments.
Should I use a mortgage broker or go directly to my bank?
While your bank can only offer you their own products, a mortgage broker works with dozens of different lenders. They can shop the market on your behalf to find the best possible interest rate and mortgage terms for your specific situation, often saving you a significant amount of money over the life of your loan.
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