The offer to purchase is the foundation of any real-estate transaction in Quebec.
It sets out not only the purchase price, but all of the terms that the buyer and sellers agree to. Once this document has agreed on, it becomes legally binding for both sides. Therefore it is very important that you understand what exactly is the offer to purchase and how to make an offer to purchase in Quebec.
In this article we cover how to make an offer to purchase in Quebec. More specifically we will cover.
- What is an offer to purchase?
- How to make an offer to purchase in Quebec
- How to make your offer stand out as a buyer
- How to make an offer to buy without a broker
- Final remarks
What is an offer to purchase?
An offer to purchase (officially called a promise to purchase in Quebec) is a written, legally binding offer made by a buyer that sets out the terms and conditions under which they are willing to buy a property.
It typically includes:
- The purchase price and payment terms
- Any conditions (such as financing or inspection)
- Deadlines for acceptance and for fulfilling conditions
- Inclusions and exclusions (appliances, fixtures, etc.)
- The proposed date of sale and possession
Once the seller accepts the offer in writing within the stated deadline, the offer becomes a binding contract. From that point on, both the buyer and the seller must act in good faith and take the necessary steps to complete the transaction, subject to the conditions set out in the agreement.
In Quebec, real estate brokers must use standard OACIQ forms, and the offer to purchase is the foundation of the entire real estate transaction.
How to make an offer to purchase in Quebec
Once you have decided to make an offer to purchase, you need to take the following steps.
- Choose the correct offer to purchase template
- Read and complete the promise to purchase
- Sign and send the promise to purchase
- Wait for the seller to review your offer
- Complete your undertakings
1. Choose the correct offer to purchase template
First, you must choose the correct template form. The OACIQ provides several promise to purchase templates that you must use to make your offer. The form that you need to use will depend on the type of property that you are planning to buy. We list the most common types of property and their associated forms in the table below.
| Property type | Includes | Offer to Purchase Form |
| Residential property with fewer than five units (not a condo) | Single family homes e.g. detached house, semi-detached, townhouses etc. | Download PDF |
| Condo (divided co-ownership) | Condos e.g. low-rise, mid-rise, high-rise etc. | Download PDF |
2. Read and complete the promise to purchase
Next, the buyer should carefully read and complete the promise to purchase. This document is how the buyer formally communicates their offer to the seller. It sets out several key terms that must be considered, including the purchase price and payment terms, the conditions of the sale, applicable deadlines, inclusions and exclusions, and any other conditions the buyer wishes to impose.
3. Sign and send the offer to purchase
Once you have filled out the promise to purchase, the next step is to sign the document and send it to the listing agent or the seller directly. At this point, it is best practice to submit other documents such as a cover letter, that will make your offer stand out to the seller. We will cover these in more detail in a later section of this article.
It is important to note, as soon as the seller receives the offer to purchase, it is not possible to get out of the promise to purchase unless you have included a cancelation clause, the seller fails to meet a condition of the contract or you obtain mutual consent from the seller.
4. Wait for the seller to review your offer
Once the seller receives your offer, they will review and consider it with their listing agent. In most cases, the seller will indicate when you can expect a response. This may be immediate, or, if the property is new to the market or the seller anticipates multiple offers, they may choose to wait until a specified deadline before responding.
At this point, the seller can reject the offer, submit a counteroffer, or accept your offer. In each scenario, the seller must respond in writing before the offer expires. If they do not, your offer will expire by the date that you included in the promise to purchase.
5. Complete your undertakings
If the seller accepts your offer, then the seller and buyer enter what is commonly called the “conditions period”. During this period, the deal is conditional on both parties actually completing the undertakings they agreed to in the promise to purchase. From the buyer’s side, this typically includes ordering a pre-purchase inspection and obtaining financing approval from a mortgage lender, if required.
Once all conditions are fulfilled or waived, the buyer will then proceed with steps such as selecting a notary, arranging property insurance, and transferring the down payment to the notary in preparation for the signing of the deed of sale. The notary will then update the Quebec Land Register with the information about the transaction and ownership change and the buyer takes ownership over the property.
How to make your offer stand out as a buyer
In some cases a seller will receive multiple offers at once. In this case, even if you submit your offer to purchase first, it does not take priority over other offers. It is the seller who decides which offer they either prefer or refuse.
There are many reasons why a seller may prefer one offer over another and it is not just because of the purchase price. Each situation is unique however, in this section we take a look at four ways to make your offer stand out. These include:
1. Use time
Deadlines can create pressure in a real-estate negotiation but, they can also be seen as a concession. To understand this, you need to understand why your seller is looking to sell.
Normally sellers are in one of two camps. They are either selling their home and planning to use the capital from the sale to buy a new home or, they have already bought a new home. In the former case, the seller may value having more time to look for a new home once they have sold their existing home. Whereas, in the later case, the seller most likely wants a buyer that will take possession of the property immediately. This could help them save money on monthly expenses for an empty home.
In each case, you can tailor Clause 11, “Declaration and obligation common to the buyer and the seller”, to communicate the closing date, occupancy and any adjustments (i.e. how any taxes, utilities, or other property costs will be split between the buyer and seller up to the day the sale or occupancy happens). However, to use this clause to make your promise to purchase stand out you need to know what your seller wants. For example, a seller that needs a quick close, may be willing to accept a lower price if you offer a shorter closing period, but a quick closing might turn off another seller.
2. Use a deposit
Another way to make your offer stand out is to use a deposit. This signals to the seller that you are both serious and confident about your ability to fulfil the conditions on your offer to purchase.
Experienced sellers know that just because someone submits an offer to purchase a home, it does not necessarily mean that all of the conditions of the offer will be met. For example, if someone has a very low down payment, an interest rate increase could prevent the bank from approving the mortgage. This happens because the higher rates may push the buyer’s gross debt service (GDS) or total debt service (TDS) ratios beyond the lender’s acceptable limits.
As such, if you have enough money to offer a deposit, you may want to do this. It shows to the seller that you are confident that if they choose you, the deal will go through. You can do this using Clause 4, Price and deposit (plus taxes if applicable), in the promise to purchase. Note, a deposit is normally only refundable if a condition in the promise to purchase is not met. Once all conditions are satisfied, the deposit typically becomes non-refundable, even if the buyer later decides not to proceed.
3. Use other conditions
During the covid-19 pandemic in 2019, the bank of Canada announced very low interest rates. This caused a surge in property prices across Canada as home ownership was suddenly made very affordable. In this sellers dominated market, upward price pressure was enormous and people started waiving their rights to pre-purchase inspections, to make their offer to purchase stand out. This is one example of how you can use other conditions within the promise to purchase to make your offer stand out. However, we would not advise waiving your right to an inspection except for in exceptional circumstances.
4. Write a cover letter
Selling your home can be a very emotional thing. For example, imagine that you have lived somewhere for 25 years, and now it is time to sell. Many people who live somewhere for a long period of time want their home to go to the best possible owner. They do not want it to go to a property investor who wants to gut the property and turn it into multiple short term Airbnb rentals.
Buyers often get a strong response from cover letters. In fact, we’ve seen multiple cases where a thoughtful letter that includes photos of the family hoping to move in has helped secure the property and, in some cases, even got a purchase price lower than competing offers. A personal touch can make your offer stand out in a crowded market.
How to make an offer to buy without a broker
In Quebec, the seller pays the listing agent a commission to help them sell their home. The buyer also has the right to hire an agent who is generally compensated by the money paid to the listing agent once the deal closes. This means that it will often not cost the buyer anything extra to have a professional help them in the transaction.
That said, a buyer is not required to work with a broker. If you wish to make an offer on a property without a broker, you should first contact the listing broker to confirm that the property is still available and to ask whether any offers have already been submitted. You may also want to check other statistics like days-on-market. If the property has been sitting on the market for longer than equivalent units, this may be a clue that the property is incorrectly priced and could indicate an opportunity to enter an offer below the sellers asking price.
You can also look for other clues as to the sellers needs. For instance, if a seller is behind on their property taxes they might be under pressure to accept an offer that will close in a short amount of time. The listing broker will not openly provide this information, but you can sometimes infer it by consulting public records, such as municipal tax rolls, the Quebec land registry, court records, and publicly available market data. Finding this information can help you craft a unique offer to the seller.
Once you know what kind of offer you want to make, follow the steps in section 2 of this article to make the offer to the listing agent.
** IMPORTANT **
Final remarks
In Quebec, the offer to purchase (officially called the promise to purchase) forms the foundation of any real estate deal, setting out the terms of the sale. Once submitted, the buyer is legally bound to act in good faith and satisfy all conditions in the contract. For this reason, it’s crucial that buyers fully understand the terms and are prepared to meet their obligations before making an offer.
In this article we have covered key terms that you must consider when making the offer to purchase, as well as how to make your offer stand out in a crowded market. If this is your first time making a promise to purchase, we would recommend using a professional realtor to help. Although it is simple to fill in the promise to purchase form, an experienced realtor could help you create a promise to purchase that saves you a significant amount of money. One example is that the broker could use Clause 11.5, “Inclusions”, to request that the seller leaves all appliances to you e.g. cooker, fridge, washer and dryer. Depending on the quality of the appliances this could be worth $3,000 – $6,000.
They will also be able to help you understand the sellers situation and, if you can offer below asking, how much lower you can go without losing the deal.
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