Ask David...
“Real life answers to your Real Estate questions”
Dear David: We want to put in an offer to buy a home and there’s a 48-hour irrevocable. What does that mean?
Dear Impatient: Like a hockey game, a real estate negotiation plays out against the clock. When an Agreement of Purchase and Sale is signed, it remains valid for a set amount of time. This window is called the “irrevocable period”. It represents the amount of time that the Seller has to respond to the offer before it expires, and it’s specifically outlined in the agreement. Before the irrevocable period runs out, a seller can either accept the offer or do nothing. If they do nothing, the offer evaporates. It’s like it never existed and neither side is committed to it any more. Irrevocable periods can last anywhere from a few hours to a few days. Understandably, a long irrevocable can be nerve wracking for buyers who are waiting to hear if they’ve landed their dream home. Yet in some cases, this extra time is necessary. Sellers may need enough time to accommodate complicated schedules or long distances. They may need to get signatures from multiple parties. The listing agent may also be using the time to try and generate multiple offers, which in this market is a strong possibility.
Dear David: We want to buy our first investment property. How can we make sure we get good tenants?
Dear New Landlord: While no screening method is foolproof, there are steps you can take to help ensure that prospective tenants are good match. Imagine your ideal tenant and advertise where they’ll be looking, keeping in mind that you are obligated to treat all applicants equally. Under the Canadian Human Rights Code, applicants are protected from discrimination or harassment based on race, religion, ancestry, citizenship, sex or orientation, family or marital status, disability, age or receipt of public assistance. To increase the likelihood of finding a good match, you can take measures to ensure that a prospective tenant is financially responsible. Ask for their rental history. Verify income by calling their employer to verify the length of their employment and monthly earnings (all you need to know is that they make enough to cover their rent). Companies like Equifax provide a credit check to landlords for about $25, which in my opinion is well worth the investment. If a prospective tenant pays their bills on time, it’s reasonable to expect they’ll pay their rent on time as well. As you gather this information, consider each element as part of the “big picture”, keeping in mind that a lack of credit or rental history should not be viewed as a negative.