An offer to purchase must be in writing and will be made in a contract of purchase and sale. If the seller accepts and signs your offer, it becomes a binding and enforceable contract by either party. In other words, if either party breaks any of their promises (breaches the contract), the other party may sue for damages or sue for specific performance (a court order to carry out the terms of the contract).

The contract of purchase and sale will identify the parties to the contract, identify the property, establish the price and terms of the purchase and sale, amount of the deposit items such as appliances included in the price and specific dates when “condition precedents” are to be removed and the sale is to be completed.

Conditions precedent (commonly called “subject to’s”) are those things that must be done or arranged before the buyer can buy or, perhaps in some instances, the seller can sell. Typically most buyers need to arrange a mortgage in order to buy a home. Their offer would, therefore, be subject to them being approved for such a mortgage by a certain date.

Also, a prudent buyer will want to have the building inspected by a professional building inspector. In such a case the offer would be subject to them obtaining a satisfactory building inspection, again by a specific date.

In the event that the buyer isn’t approved for a mortgage, or the building inspection is not satisfactory, the buyer will, on or before the dates specified, inform the seller that they cannot complete their purchase and ask that their deposit be returned to them.