Mark: Hi this is Mark Bossert from Top Local Lead Generation. We're here with Paul Toffoli, an award-winning realtor in Vancouver. How are you doing today, Paul?
Paul: I'm great, thank you very much. Yourself?
Mark: I'm good. So we're getting into the nitty-gritty. We're making deals — making and negotiating an offer. How does a realtor help me with that?
Paul: Sure, I think this is where we're — like you said — 'getting into the nitty-gritty'. We've looked at properties — we've sorted the gems out from the chaff, to mix some metaphors. Finally we've narrowed it down to one and my client is like, 'You know what? This is a property that I would like to own.'
Now it comes down to the contract work. This is a legal, binding contract — it's a big deal. It's not something you can do lightly.
What I do with my clients is the following: I always like to be prepared. I make sure that, as we're going through the process, I give them a blank copy of the contract along with some suggest subjects and terms. This is just to make sure they're familiar with it before we get to that stage of drafting an offer — it may have to be done in the heat of the moment, it may be hurried. It's always better for a buyer if they're comfortable with that contract, and have seen it ahead of time.
The contract form that we use is created by the Real Estate Board and by the Law Society of BC. This contract has been in use, in different forms, for 30+ years. It's always updated annually, as to new quirks and definitions and so forth. It's something that we can be comfortable with — 90%+ of all residential purchases are done using this contract.
What it stipulates is very straight-forward: Buyers' name, sellers' name; Property address, property legal description; Identification number or PID; and then the terms.
Some of the terms that we know are negotiable: Purchase price; amount of the deposit (which, in our marketplace, is typically about 5% of the purchase price), typically payable upon subject removal (though it is negotiable: sometimes it's payable upfront, fully refundable, or a portion of it is payable upfront). The standard practice for deposits right now is about 5% of the purchase price upon removal of all conditions.
Then, completion dates, which is when you pay your money and the title transfers.
Next, possession date, which is usually the day after, or a few days after (depending on the seller and whether they're buying another property and so forth), the completion date.
Then the adjustment date, which is when you adjust property taxes, if there's strata fees, utilities, when do they get adjusted.
Then, what's included. In our marketplace and in the standard contract, anything attached to the walls is included in the purchase of the property. Well, that includes blinds, but does it include drapes? What about appliances? All those things, we just have to make sure that we cross the t's and dot the i's. Another one that's sometimes forgotten — maybe that shed or play palace in the back yard. These are things that you don't want to forget. Those are considered included items.
We also talk about subjects, or conditions prior to purchase. It's typically going to be 'subject to financing', 'subject to inspection', 'subject to the strata documents' if it's a strata, 'subject to title search', and 'subject to property disclosure statement'. All of these things are going to be put in. Then we negotiate not only one of those subjects, but how long does the buyer have to pull through. Is it a week? Is it two weeks? The more complicated the subject, the longer time period to complete it.
Those are all things that we have to put into the offer, and those are all negotiable items. The seller will want those dates shorter, and the buyer will want those dates longer.
So we have to go through all of those items when we're drafting an offer. As I said earlier, it goes much smoother if my clients have a copy of all that information in the contract in front of them prior to us making an offer. They've already seen everything so all that we have to deal with is what have to put in and what items are negotiable. It just simplifies the process and makes the experience less stressful.
Mark: So it sounds like it's a fairly convoluted, complex situation with a lot of information that you need to be aware of. That's where an experienced hand can really help guide you and make sure that you don't miss anything. Is that right?
Paul: It's absolutely true. You want to make sure that you're dealing with somebody who's been through this before, because it's easy to make a little mistake that can end up costing thousands of dollars — or end up losing the property depending on what the situation is.
Mark: Right. So we've been talking with Mr. Paul Toffoli, he's an award-winning realtor in Vancouver. You can reach him at his website toffoli.ca or give him a call at (604) 787-6963. He'll look after you. Thanks, Paul.
Paul: Thank you, Mark.