C2 M18 Completing Residential Agreement Purchase Sale Countering Offer Working Competing Offers Print V1

Module 18: Completing a Residential Agreement of Purchase and Sale,
Countering an Offer, and Working with Competing Offers
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Module 18: Completing a Residential Agreement of Purchase and Sale,
This module continues with drafting an offer and begins by completing an agreement of purchase and sale that
includes conditions. The module then advances the offer process to situations where a buyer’s offer is not accepted
by the seller, but rather the seller makes an offer back to the buyer. This situation is called a counter offer and
sometimes referred to as a sign back. Many real estate negotiations will include one or more counter offers before
an agreement is reached between the seller and buyer. The module will also identify the typical changes made
during counter offer situations.
In a seller’s market, the supply of available properties is less than the demand. Therefore several buyers can be
competing for the same property, which is referred to as a competing offer scenario. There are requirements under
REBBA relating to these situations. To ensure ethical practices when dealing with competing offers, you will need to
be familiar with and follow the requirements specified by the Code of Ethics. As with any negotiation, there can be
risks associated with submitting or accepting an offer. Under typical market conditions, both sellers and buyers will
include terms and conditions to help mitigate these risks. However, in a competing offer scenario, there can be
additional risks when terms and conditions are not included in an attempt to make an offer more desirable. The
module will also detail these risks, strategies for handling competing offers, and leading practices when working
with sellers and buyers in a competing offer situation.
By the end of the module, you will have a foundation for completing counter offers and competing offers.

This module covers the following tasks and related information:
• Complete an Agreement of Purchase and Sale with Conditions
• Complete a Counter Offer
• Work with Competing Offers
This module also provides opportunities for you to review scenarios that highlight how to discuss and act
accordingly when faced with the previously listed topics.
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Menu: Completing a Residential Agreement of Purchase and Sale,
Number of Lessons 5 Lessons
Lesson Number Lesson Name

Lesson 1 Complete an Agreement of Purchase and Sale with Conditions
Lesson 2 Complete a Counter Offer
Lesson 3 Work with Competing Offers
Lesson 4 Summary Practice
Module Summary

Lesson 1 | Page 1 of 40
Lesson 1: Complete an Agreement of Purchase and Sale with Conditions
This lesson covers drafting an offer with conditions using a scenario. You will gain practice using clauses and learn
how to stack conditions.

This lesson gives you practice working with a scenario to identify and draft clauses to include on an offer’s schedule.
Upon completion of this lesson, you will be able to

• Identify the steps required to draft an offer that includes conditions
• Draft an offer that includes conditions and other clauses
• Consolidate, or “stack” conditions to simplify the clause wording on an offer
Throughout this lesson, you will participate in decision points to test your knowledge on the topics presented.

Information to Identify in an Offer Plan Related to Conditions
Recall the four-step offer plan you learned in a previous module. When you have an offer that includes conditions,
you will need to identify the following additional information:
• Required Dates (Step 2 of the offer plan)
To ensure dates align, you will need to identify key dates when drafting an offer. The offer plan should itemize these
five dates in the following chronological order:
• Offer date
• Irrevocable
• Expiry of conditions – conditional date
• Requisition – title search date
• Completion or closing date

Note: The order of these dates does not follow the order on the agreement of purchase and sale. Using this
chronological order will help you to determine when different activities must occur for the transaction to be
successful.
• Required Clauses (Step 3 of the offer plan)
For Schedule A, which is part of every offer, you will need to itemize the required clauses for the offer. A clause
identifying the balance due on completion must be included in every offer. Other clauses and conditions, such as
obtaining financing or a property inspection, are also added to Schedule A.
To organize the clauses, use these steps as a guideline:

1. List the conditions with short timeframes, for example obtain A) financing, B) inspection, and C) insurance.
These conditions can usually be fulfilled in a week.
2. For a condition with a longer period, such as D) the sale of a buyer’s property, the conditional period will be
longer, for example 30 days.
3. Use one condition with the same timeframe for A, B, and C.
4. A separate condition should be used for D as the conditional period will be longer and the condition may
include an escape clause.
Using one date for conditions A, B, and C will simplify the process and allow you to keep better track of the dates. It
will also be less cumbersome for the buyer and seller when understanding their responsibilities.

Guidelines for Writing Multiple Clauses
For some offers, you might need to include many clauses which can require several schedules. To help you reduce
the wordiness and make the terms clear and easy to understand, follow these guidelines.
The following five tabs contain information on each guideline. You must review all the tabs before moving
forward
Review Clauses To assess the impact on pre-printed clauses and wording, carefully review the clauses you
add to a schedule.
Be Precise Avoid vague wording and be as specific and precise as possible.
Group Clauses Where possible simplify by grouping similar requirements. For example, the buyer of a
rental property might want to include a review or confirmation of the following items:
• Tenant records
• Rental amounts
• Fire safety issues
• Building code compliance
You might group these items under one condition that states the property meets all these
requirements.
Be Concise Reduce wordiness and avoid vague clauses.
Redraft Offer If necessary, redraft an offer to clarify clauses and present them in a logical sequence.

Stacking
Many salespersons find it efficient to consolidate, or “stack” conditions in offers. Stacking refers to a way of grouping
and writing conditions that are required to be fulfilled by the same date. For example, you might stack financing,
insurance, and lawyer’s approval clauses that require the same 5 to 7 days. When you include these conditions
separately, they can clutter the offer making it overly long and more difficult to understand. When stacking these
conditions, you use bullets to group the conditions into a block and remove wordiness to avoid repetitive language.
With stacking, the party responsible for completing the conditions is clear. There’s a single fulfillment or waiver date
for multiple conditions. Stacking conditions avoids repetitive language for several different clauses.
Example
Consider an offer that requires two conditions: a property inspection and the sale of the buyer’s property. To
include these two conditions, you could write two separate clauses as follows:

This Offer is conditional upon the inspection of the subject property by a home inspector at the Buyer’s own
expense, and the obtaining of a report satisfactory to the Buyer in the Buyer’s sole and absolute discretion. Unless
the Buyer gives notice in writing delivered to the Seller personally or in accordance with any other provisions for the
delivery of notice in this Agreement of Purchase and Sale or any Schedule thereto not later than _____ p.m. on the
_____ day of _____________, 20_____, that this condition is fulfilled, this Offer shall be null and void and the deposit shall
be returned to the Buyer in full without deduction. The Seller agrees to co-operate in providing access to the
property for the purpose of this inspection. This condition is included for the benefit of the Buyer and may be
waived at the Buyer’s sole option by notice in writing to the Seller as aforesaid within the time period stated herein.
From INSP 1 – Inspection of Property by a Home Inspector—General Inspection ©2019 Ontario Real Estate
Association.
All rights reserved. Used under license
This Offer is conditional upon the sale of the Buyer’s property known as ________________. Unless the Buyer gives
notice in writing delivered to the Seller personally or in accordance with any other provisions for the delivery of
notice in this Agreement of Purchase and Sale or any Schedule thereto not later than _____ p.m. on the _____ day of
__________, 20_____, that this condition is fulfilled, this Offer shall be null and void and the deposit shall be returned to
the Buyer in full without deduction. This condition is included for the benefit of the Buyer and maybe waived at the
Buyer’s sole option by notice in writing to the Seller as aforesaid within the time period stated herein.
From SBP/SA-1 – Condition—Buyer’s Property

©2019 Ontario Real Estate Association.
All rights reserved. Used under license
As an example using stacking, you can combine the two clauses already discussed and revise them.
This offer is conditional upon:
• The inspection of the subject property by a home inspector at the Buyer’s own expense, and the obtaining of a
report satisfactory to the Buyer in the Buyer’s sole and absolute discretion.
• The sale of the Buyer’s property known as 32 Cedar Crescent in City of Anycity.

Unless the Buyer gives notice in writing delivered to the Seller personally or in accordance with any other
provisions for the delivery of notice in this Agreement of Purchase and Sale or any Schedule thereto not later
than _____ p.m. on the _____ day of _____________, 20_____, that these conditions are fulfilled, this Offer shall be null
and void and the deposit shall be returned to the Buyer in full without deduction. These conditions are included
for the benefit of the Buyer and may be waived at the Buyer’s sole option by notice in writing to the Seller as
aforesaid within the time period stated herein.
Stacking clauses works in this scenario, as both conditions are for the benefit of the buyer, and both will be
completed by the same date.

When creating an offer plan, step two requires you to identify several key dates. These
dates often create a deadline on which a certain action must be completed, or the
requirement for that action waived.
In chronological order, offer date is the first date for an action to be waived.
Identify whether the given statement is true or false.

There are two options. There is only one correct answer.
True False
In chronological order, irrevocable date is the third date on which an action will be waived.

True False

In chronological order, date of expiry of conditions is the second date on which an action will
be waived.

True False
In chronological order, requisition date is the fourth date on which an action will be
completed.

True False

In chronological order, completion date is the last date on which an action will be finalised.

True False
Following several leading practices will help you when you are adding multiple clauses to
an agreement of purchase and sale.
Identify which of the given statements are correct.
There are five options. There are multiple correct answers.
1 Review all clauses that you plan to add to a schedule.

2 Keep the wording of the clauses slightly vague to allow some open interpretation.
3 Group similar clauses.
Ensure your clauses are long and complex so the seller and buyer realize the value you bring when you
4
interpret those clauses for them.
5 If necessary, redraft the offer.

Multiple Conditions
You represent buyers who are looking for their dream home. The buyers want to be
careful about this purchase and have a list of conditions, including a home inspection,
financing, insurance, and lawyer’s review. You decide to consolidate, or stack the
applicable conditions.
What are the advantages of stacking multiple conditions?
There are four options. There are multiple correct answers.
1 The offer is easy to read.

2 The party responsible for completing the condition is clear.
3 There’s a single fulfillment or waiver date for multiple conditions.
4 Saves space in the agreement of purchase and sale.

Multiple Conditions
Often, buyers want to be careful about a home purchase and have a list of conditions,
including a home inspection, financing, insurance, a lawyer’s review, and more. In such
cases, it often makes sense to consolidate or ‘stack’ the applicable conditions.
What should you be aware of when stacking multiple conditions?
1 Include all conditions that can be completed in more or less the same timeframes as one condition.
2 Waiving one condition in a stack results in all conditions being waived.
3 Set the completion date to that of the condition with the shortest timeframe.
Do not include a condition in a stacked clause that requires an escape clause because the escape clause
4
will apply to the entire stack.

Ella Jane Billingsworth wants you to draft an offer for 95 Wentworth Drive owned by Kristen Ellen Chartwell.
Offer Details
The property, 95 Wentworth Drive is located on the east side of Wentworth Drive, has a frontage of 52.37 feet and a
depth of 138.45 feet and is legally described as Lot 73, Registered Plan 92M-4296, City of Anycity, Regional
Municipality of Anyregion.
The offered price is $468,900 with a deposit of $15,000 provided upon acceptance of the offer. The deposit is
payable to the listing brokerage, ABC Real Estate Inc. The balance of the purchase price will be paid upon completion
of the transaction. In addition to the deposit, Ella expects to have up to $110,000 available to put towards a down
payment.

Ella requires a $350,000 mortgage. Recently, when talking with her bank, she learned that she could reasonably
expect to be approved for a mortgage of that size at no more than 3.5%, with a 5 year term, and amortization of 25
years. The monthly payment would amount to $1,747.45. However, since the mortgage is not confirmed, she wants
to make her offer conditional on obtaining such a mortgage.
Ella is requesting a property inspection by a qualified home inspector. As well, she wants to make the offer
conditional upon being able to obtain insurance on the property. Ella wants the offer to be conditional on the sale of
her home at 32 Cedar Crescent in City of Anycity within 60 days, as this is expected to provide sufficient cash for her
down payment. Other conditions should be fulfilled within one week of the date of acceptance of the offer. Ella
understands she may have to waive the condition on the sale of her home if a competing offer is submitted
pursuant to an escape clause.
The offer will contain a warranty from the seller that the chattels and fixtures included in the agreement will be in
good working order on completion. Ella would like assurance from the seller that the garage door will be fixed and
in good working order on closing.
The chattels included in the offer are the Cooksmart stove, Model 3288, the SuperiorChef refrigerator, Model 7465,
and the KitchenChef microwave, Model 2000. All existing light fixtures will be included except for the dining room
chandelier. The hot water tank is rented from Anycity Energy at $38.25 (plus HST) per month, and is assumable.
The offer is being drafted and signed on May 15, 20xx and is irrevocable until 9:00 p.m. on May 17, 20xx. The
completion date is 120 days from the offer date, on September 12. The title search date is 30 days prior to the
completion date –August 13. The completion and title search dates are both business days. The HST is deemed to be
included in the purchase price and the present use is single family residential.
Olivia Johansson is the listing salesperson with ABC Real Estate Inc. and is representing the seller Kristen Ellen
Chartwell. You are a salesperson with XYZ Realty Ltd. and are representing the buyer. Notices can be delivered to
the brokerages. The listing brokerage’s fax number is 555-433-9976 and the email is abcre@email.com. The co-
operating brokerage’s fax number is 555-233-2989 and the email is xyzre@email.com.

payment.
expect to be approved for a mortgage of that size at no more than 3.5%, with a 5-year term, and amortization of 25
Ella is requesting the offer be conditional on a property inspection performed by a qualified home inspector. As well,
she wants to make the offer conditional upon being able to obtain insurance on the property. Ella wants the offer to
be conditional on the sale of her home at 32 Cedar Crescent in City of Anycity within 60 days, as this is expected to
provide sufficient cash for her down payment. Other conditions should be fulfilled within one week of the date of
acceptance of the offer. Ella understands she may have to waive the condition on the sale of her home if a
competing offer is submitted pursuant to an escape clause.

Click the Reference button to access the scenario for the 95 Wentworth property. Ella
Jane Billingsworth is the buyer.
On what date does the last condition expire?
There are four options. There is only one correct answer.
1 May 17, 20xx

2 July 14, 20xx
3 July 16, 20xx
4 August 13, 20xx

payment.

Key Dates
Jane Billingsworth is the buyer. The scenario states several key dates.
September 12 is the completion date.
True False

payment.

Key Dates
The date for the expiry of the last condition is July 14.

True False

payment.

Key Dates
May 15 is the requisition date.

True False

payment.

Key Dates
August 13 is the requisition date.

True False

payment.

Key Dates
Expiry date for most conditions is May 17.

True False

payment.

Key Dates
May 22 is the irrevocable date.

True False

payment.

Which of the following clauses would you add to Schedule A of the buyer’s offer?
True False

payment.

You should not add mortgage approval to Schedule A of the buyer’s offer.

True False

payment.

You should not add warranty to Schedule A of the buyer’s offer.

True False

payment.

You should add insurance condition to Schedule A of the buyer’s offer.

True False

payment.

You should add acknowledgment to Schedule A of the buyer’s offer.

Click the Reference button to access materials or information to assist with your learning.
True False

payment.

You should not add condition on Environmental Site Assessment to Schedule A of the buyer’s
offer.

True False

payment.

You should add condition of sale of buyers’ property to Schedule A of the buyer’s offer.

True False

payment.

You should not add the clause of right to revisit property prior to completion to Schedule A of
the buyer’s offer.
True False

payment.

Click the Reference button to access the scenario for the 95 Wentworth property used for filling the offer plan. Ella
For the offer Ella Jane Billingsworth wishes to make on the property at 95 Wentworth, the following information is
entered in the initial section of the offer plan and the section 1.
Under the initial section: Offer Plan – Residential Real Property – Single Family:
• Address is 95 Wentworth Drive, Any City, Anyregion. The address of the property is required.
• Buyer is Ella Jane Billingsworth. The name of the buyer is required.
• Seller is Kristen Ellen Chartwell. The name of the seller is required.
Under the section 1: Summarize offer mathematics:

• Offer price is $468,900. The offer price is required
• Deposit is $15,000. The deposit amount is required.
• To be paid upon acceptance. Identify whether the deposit is to be paid herewith, upon acceptance, or as
otherwise described.
• Additional deposit(s) is not applicable as there is only one deposit.
• Details: payable to the listing brokerage, ABC Real Estate Inc. Identify payment details for the deposit.
• Balance due is $453,900 since offer price is $468,900 and total deposit is $15,000. Insert all relevant amounts
into the SAD formula to identify the balance due.

payment.

Click the Reference button to access the scenario for the 95 Wentworth property used for filling the offer plan. Ella
entered in the section 2 of the offer plan.
Under the section 2: Identify dates:

• Offer date is May 15, 20xx.
• Irrevocable date is 9:00 pm on May 17, 20xx.
• Requisition date is August 13, 20xx.
• Completion date is September 12, 20xx.

payment.

Jane Billingsworth is the buyer. You want to identify the conditions and warranties to
enter into the Schedule A.
Identify whether each of the following items is a condition or warranty.
1 Requirement for a new first mortgage is a condition.

2 Requirement for chattels and fixtures to be in good working order is a condition.
3 Property insurance requirement is a warranty.
4 Sale of buyer’s property with escape clause is a right.
5 Property inspection by qualified home inspector is a condition.

payment.

Jane Billingsworth is the buyer. The purchase is dependent upon the sale of the buyer’s
current property. It contains an escape clause in case someone else offers on the
Wentworth property.
Which combination of OREA’s clauses would you use to fulfil these requirements?
Conditional upon the sale of the buyer’s property and an escape clause allowing the seller to continue to
1
offer the property for sale until the buyer’s property sells, or the buyer waives that condition of sale.
Conditional upon the buyer receiving notification of the removal of all conditions in an existing
agreement of purchase and sale for the buyer’s property and an escape clause allowing the seller to
2
continue to offer the property for sale until the buyer’s property sells, or the buyer waives that condition
of sale.
Conditional upon the sale of the buyer’s property and an escape clause that requires removal of all
3
conditions, not just the sale of the buyer’s property.
Conditional upon the seller obtaining a release from a prior agreement of purchase and sale and an
4 escape clause that allows the buyer to continue to look for other properties until the buyer’s property
sells.

payment.

Click the Reference button to access the scenario for the 95 Wentworth property. Ella Jane Billingsworth is the
buyer.
Under the section 3: List required information to be included on a schedule:

• A. Balance due clause: amount due on closing is $453,900. Note: Of which, $350,000 will be paid by the new
mortgage and the remaining $103,900 by the buyer as the remainder of the down payment.
• B. Conditions:
1. New first mortgage
2. Property inspection by qualified home inspector: OREA INSP–1
3. Property insurance: OREA INSUR–1
4. Sale of buyer’s property with escape clause: OREA SBA/SA–1 and SBA/SA–4
• Time period for condition:

1. Due 7 days. This is the time period for condition 1 .
• C. Any additional clause:

1. Warranty on chattels and fixtures in good working order: OREA CHATT–2
2. Right to visit property once before closing: OREA INSP–15

payment.

Click the Reference button to access the scenario for the 95 Wentworth property. Ella Jane Billingsworth is the
buyer.
Under the section 4: Identify any additional information required for the offer:
• Chattels: Cooksmart stove, Model 3288; SuperiorChef refrigerator, Model 7465; and KitchenChef microwave,
Model 2000. This is the information about chattels included.
• Fixtures: All existing light fixtures will be included with the exclusion of the dining room chandelier. This is the
information about fixtures excluded.
• Rental items: Hot water heater rented from Anycity Energy at $38.25 (plus HST) per month, and is assumable.
• Other: The HST is deemed to be included in the purchase price and the present use is single family residential.
This is other pertinent information.

payment.

current property. It contains an escape clause to permit the seller to continue to offer the
property for sale.
Make an attempt to draft the condition contingent upon the sale of the buyer's property, with an
appropriate escape clause.
Click the Reference button to access materials or information to assist with your learning.
WHILE NAVIGATING THROUGH THE ONLINE MODULE, CLICK THE EXPERT RESPONSE BUTTON TO VIEW THEIR
ANSWER.

Here is an example:
This Offer is conditional upon the sale of the Buyer’s property known as 32 Cedar Crescent, in the City of
Anycity. Unless the Buyer gives notice in writing delivered to the Seller personally or in accordance with any other
provisions for the delivery of notice in this Agreement of Purchase and Sale or any Schedule thereto not later than
5:00 p.m. on the 14th day of July, 20xx, that this condition is fulfilled, this Offer shall be null and void and the
deposit shall be returned to the Buyer in full without deduction. This condition is included for the benefit of the
Buyer and may be waived at the Buyer’s sole option by notice in writing to the Seller as aforesaid within the time
period stated herein.
Provided further that the Seller may continue to offer the property for sale and, in the event the Seller receives
another Offer satisfactory to the Seller, the Seller may so notify the Buyer in writing by delivery to the Buyer
personally or in accordance with any other provisions for the delivery of notice in this Agreement of Purchase and
Sale or any Schedule thereto. The Buyer shall have seventy-two (72) hours from the giving of such notice to waive
this condition by notice in writing delivered to the Seller personally or in accordance with any other provisions for
the delivery of notice in this Agreement of Purchase and Sale or any Schedule thereto, failing which this Offer shall
be null and void, and the Buyer’s deposit shall be returned in full without deduction.
NOTE: You will get an opportunity to learn how to draft a clause in the later courses.

payment.

current property. It contains an escape clause to permit the seller to continue to offer
the property for sale.
Assuming the seller accepted Ella, the buyer’s offer, what happens if the seller informs the
buyer after ten days that they have received another satisfactory offer?
1 The seller can accept both offers and see which buyer fulfils their conditions first.
The seller can accept the other offer and use the escape clause to inform Ella that her offer is no longer
2
valid.
3 The buyer can counter the other offer by bidding up the purchase price of the property.
The buyer has a pre-determined amount of time to either successfully sell their home and waive the
4
condition, or walk away from the purchase.

payment.

Jane Billingsworth is the buyer. You have decided to stack some of the conditions.
Which of the given conditions would you stack?
There are six options. There are multiple correct answers.
1 Right to visit property once before closing

2 Property insurance
3 Sale of buyer’s property with escape clause
4 New first mortgage
5 Property inspection by qualified home inspector
6 Warranty on chattels and fixtures in good working order

payment.

Jane Billingsworth is the buyer. The purchase is dependent upon an inspection, and on
the buyer, Ella, arranging a new mortgage and insurance on the property.
Identify a condition that comprises the stacked clauses for the mortgage, the home
inspection, and the proof of insurance.
ANSWER.

Stack OREA clauses INSP–1, MORT–2, and INSUR–1.
This offer is conditional upon:

• The inspection of the subject property by a home inspector at the Buyer’s own expense, and the obtaining of
a report satisfactory to the Buyer in the Buyer’s sole and absolute discretion
• The Buyer arranging, at the Buyer’s own expense, a new first Charge/Mortgage for not less than three
hundred and fifty thousand dollars ($350,000), bearing interest at a rate of not more than 3.5% per
annum, calculated semi-annually not in advance, repayable in blended monthly payments of about one
thousand seven hundred and forty seven dollars and forty-five cents ($1,747.45 ), including principal
and interest, and to run for a term of not less than five years from the date of completion of this transaction
• The Buyer arranging insurance for the property satisfactory to the Buyer in the Buyer’s sole and absolute
discretion
Unless the Buyer gives notice in writing delivered to the Seller personally or in accordance with any other
provisions for the delivery of notice in this Agreement of Purchase and Sale or any Schedule thereto not later than
5:00 p.m. on the 22nd day of May, 20xx, that this condition is fulfilled, this offer shall be null and void and the
deposit shall be returned to the Buyer in full without deduction. The Seller agrees to co-operate in providing
access to the property, if necessary, for any inspection of the property required for the fulfillment of this
condition. This condition is included for the benefit of the Buyer and may be waived at the Buyer’s sole option by
notice in writing to the Seller as aforesaid within the time period stated herein.

Congratulations, you have completed the lesson!
There are two tabs on this page with a summary of the key topics that were covered in this lesson.
Identify the stepsTo ensure dates align, you will need to identify key dates when drafting an offer. The offer
required to draft plan should itemize these five dates in the following chronological order: Offer date,
Irrevocable, Expiry of conditions – conditional date, Requisition – title search date, and
an offer that
Completion or closing date.
includes
For Schedule A, which is part of every offer, you will need to itemize the required clauses for
conditions the offer. A clause identifying the balance due on completion must be included in every
offer. Other clauses and conditions, such as obtaining financing or a property inspection,
are also added to Schedule A.
Stack conditions Stacking refers to a way of grouping and writing conditions that are required to be fulfilled
to simplify the by the same date. With stacking, the party responsible for completing the conditions is
clause wording on clear. There’s a single fulfillment or waiver date for multiple conditions. Stacking conditions
avoids repetitive language for several different clauses.
an offer

Lesson 2: Complete a Counter Offer
This lesson describes the requirements under REBBA when countering an offer rather than accepting an offer. The
lesson also explains options when an offer is to be countered, identifies the typical changes that can be made, and
includes drafting an offer and a counter offer.

Obtaining acceptance of an offer can be complex and lengthy as sellers and buyers negotiate the terms and
conditions of the agreement. Many real estate transactions will include one or more offers being made by the
parties. For example, if the buyer’s offer is not acceptable, the seller can make changes to the offer and submit the
new offer back to the buyer. This transaction is known as a counter offer – also referred to as a sign back – and once
a seller amends the buyer’s offer, the buyer is no longer obligated to their offer. The buyer may then choose to
accept the seller’s offer, reject the seller’s offer, or may further the negotiations by submitting another offer back to
the seller. Offers can be negotiated between the parties many times before reaching a final agreement.
REBBA has specific requirements when an offer is being countered rather than accepted. These requirements relate
to retaining copies of offers and ensuring the offer is legible. As a salesperson you will need to understand how a
counter offer is completed to ensure the necessary changes are made to achieve a fully accepted offer that complies
with REBBA.

Upon completion of this lesson, you will be able to
• Identify the requirements under REBBA when an offer will be countered rather than accepted
• Identify the steps when an offer will be countered rather than accepted
• Describe what changes are typically made when countering an offer
• Complete an agreement of purchase and sale that includes a counter offer

Requirements Under REBBA Related to Counter Offers: Retaining Copies of Offers
For a buyer's offer to purchase a property to be valid, it must be in writing and signed by all buyers who are party to
the agreement of purchase and sale. A verbal indication from a buyer that they are prepared to submit an offer on a
property is not considered a valid offer and this should not be portrayed as such by a salesperson.
REBBA requires brokerages to retain documents and records relating to a trade in real estate, which would include
any financial records and supporting documentation for at least six years from receipt by the brokerage. This onus of
responsibility falls to all brokerages involved in the trade. A salesperson should ensure that all agreements of
purchase and sale and other pertinent documents associated with the trade are submitted to their brokerage at the
earliest opportunity.

When an offer has been presented to a seller, the seller has three options — accept, reject, or counter the offer
back to the buyer. When an offer is not accepted or countered back to the buyer, the seller is at liberty to reject the
offer. The listing brokerage is required to retain all the documents pertaining to the rejected agreement of
purchase and sale and all related documents for a period of at least one year after the brokerage received the
written offer. For unsuccessful offers, the listing brokerage may retain a summary document instead of retaining
the offer in its entirety.
In addition, under REBBA, the listing brokerage is also required to retain all agreements of purchase and sale and
related documents that were presented but not acceptable to the seller or were unsuccessful for any reason.
When a seller counters an offer back to the buyer, otherwise known as a sign-back or the seller's offer to the buyer,
a copy of the buyer's offer, as submitted, must be retained by the listing brokerage for a period of at least one year
from when the offer was received by the brokerage. Again a summary document may be retained in lieu of
retaining the offer in its entirety.
For every written offer that is received on behalf of a seller, whether it is a buyer's original offer or an agreement of
purchase and sale with changes made during negotiations, the offer is considered a separate offer and the listing
brokerage is required to retain a copy of the agreement of purchase and sale and all related documents and
records.
Once an agreement of purchase and sale has been agreed upon and accepted by all parties, the offer and related
documents are retained in its entirety for at least six years by the all brokerages involved in the transaction.


Sections 35.1(2) and 19.1 of the Act cover changes related to records that must be kept
for real estate transactions.
Which of the following statements related to records for offers are true?
Click the Reference button to access "Bill 55: Changes for handling of offers" to assist with your learning.
Reference: Conservation Authorities Act
1 A brokerage can choose to retain a summary document or the original offer of a successful transaction.
2 A successful offer must be kept in its entirety (the agreement of purchase and sale) for six years.
A brokerage acting on behalf of a seller shall retain copies of all written offers not accepted or a
3 summary document.
A brokerage can create its own summary document or use the Offer Summary Document, OREA
4
Form 801 when drafting an offer for a buyer.

Requirements Under REBBA Related to Counter Offers: Summary Document
A summary document may be used rather than the seller’s brokerage retaining the offer in its entirety. You can use
a summary document under the following conditions:
• The seller’s brokerage receives the offer on behalf of the seller
• The offer is made through a brokerage on behalf of the buyer
• The offer did not result in a transaction, that is, the offer was not accepted
• The summary contains all the required information

When using a summary document in lieu of retaining the offer, REBBA requires specific information to be included
in the document:
1. Buyer’s name and signature
2. Seller’s name and contact information
3. Name of the buyer’s brokerage and their representative
4. Name of the seller’s brokerage and their representative
5. Address, legal description or other identifier of the property
6. Date and time the offer was made
7. Date and time the offer was received by the brokerage and how the offer was received, such as in person or by
fax
8. Date of presentation, if the brokerage presented the offer to the seller
9. Date and time, if any, until which the offer was irrevocable
Although a summary document can be used rather than retaining an unaccepted offer in its entirety, it is important
to understand that the summary document cannot be used as a substitute for the Agreement of Purchase and Sale
form during negotiations.

A salesperson’s listing has just sold as a result of multiple offers. The salesperson is
required to keep records for all the offers.
Which of the given statements related to the retention of offers are true?
There are six options. There are multiple correct answers.
1 The salesperson can retain a summary document for offers that were received but not accepted.
The salesperson can retain a summary document because she is working for a brokerage that received
2
offers on behalf of the seller.
3 The salesperson must retain a summary document for all offers that failed.
The listing brokerage must keep either the summary document or the complete offer for each failed
4
offer for one year from the date of the offer.
A salesperson working for a buyer in the transaction for the property can create a summary document
5
as a record.
6 The brokerage must use the appropriate OREA form for the summary document

Requirements Under REBBA Related to Counter Offers: Legibility Requirements

for Offers
An agreement of purchase and sale being used during negotiations must remain legible at all times. In instances
where an offer is being negotiated, the same agreement of purchase and sale can be used with changes made
multiple times before it is accepted. The delivery of an offer can occur in various ways, personally delivered or
electronically by email or facsimile. Over time, an offer can become difficult to read, and when sent by facsimile, the
offer can become illegible after only a few transmissions.
The Code of Ethics requires all offers to be legible. This is to ensure the terms agreed to by the parties are clearly
displayed and readable.
Example: A buyer receives a counter offer from a seller which is becoming difficult to read due to the number of
times the offer is revised by the parties. The buyer is not willing to accept the seller’s offer and would like to submit
an offer back to the seller for their consideration. The salesperson, rather than using the same agreement of
purchase and sale to counter the seller’s offer, drafts a new offer based on the buyer’s new terms. The salesperson
has the buyer sign the new offer and presents this to the seller. The salesperson also keeps the original offer with
all the changes so it can be referred to if questions arise about the previous negotiations.

You’re involved in a counter offer situation as the salesperson for a seller. The buyer has
countered the offer twice but it has not been acceptable by the seller. However, the
seller would like to keep negotiating to reach an agreement. The offer document
contains numerous changes and is getting hard to read.
You can create a new offer for the next counter offer to avoid legibility issues.

True False
You should not create a summary document to avoid legibility issues.

True False

You can continue to amend the original offer to avoid legibility issues.
True False
You should make sure each amendment to the offer is written and legible to avoid legibility
issues.
True False

You should copy the counter offer so you have a legible record then amend it with the next
round of requested changes to avoid legibility issues.

True False

Countering an Offer
Acceptance of an offer does not necessarily occur when a seller receives a buyer’s initial offer. The offer may contain
terms that are not acceptable to the seller, and rather than reject the offer, the seller can make an offer back to the
buyer. This situation is referred to as a counter offer, where the seller and buyer roles are reversed, and the seller is
now the offeror. Counter offers can be made by either party. Typically, a buyer places an offer and if the original
offer is not acceptable, the seller can make a counter offer with changes. However, if the seller’s offer is not
acceptable, the buyer can make a counter offer back again to the seller.
Negotiating an offer requires skill and a clear understanding of the party’s goals for acceptance. Perhaps the price
is not acceptable, the completion date is too soon, the seller does not agree to leave the chattels being asked for,
or a condition or other term of the offer is not agreed to. These terms can be changed in a counter offer. However,
as a salesperson, you should ensure the seller or the buyer fully understands that any change they make to the
offer will release the other party from their obligations to the offer. Once an offer is changed, the offer cannot be
accepted by that party.
To counter an offer, you have three options:

1. Amend the original offer: This is done by inserting the required changes on the agreement of purchase and
sale. This would include deleting any term not acceptable and inserting any additional term. To confirm the
party agrees to and understands the change, the party is asked to place their initials at each change. This
method is the most common.
2. Draft a new offer: A new offer can be drafted when the offer requires significant changes and inserting these is
difficult to complete while still ensuring the offer is legible. Written changes can become confusing when
multiple counter offers are being made.
3. Prepare a counter offer form: A counter offer form can be used as an alternative to amending the original
offer. This would include itemizing each change in detail the seller wishes to make. Rather than the seller
signing the agreement of purchase and sale, the seller signs the counter offer form. If the buyer agrees to
these terms, the buyer signs the counter offer form to indicate acceptance of the seller’s offer.
As amending the original offer is the most common method of countering an offer, this module will explain the
steps in detail. The other methods will not be detailed.

You are working for the sellers of a property. The sellers receive an offer from a buyer,
which doesn’t meet their needs but they would like to make a counter offer.
Identify the options you have for creating a counter offer.
ANSWER.
You have these three options for creating a counter offer:
Option 1: Amend the original offer
You amend by inserting your changes on the agreement form and having the seller or buyer initial each change.
This method is the most common.
Options 2: Draft a new offer
You can draft a new offer when the seller or buyer amends the offer significantly and written changes are difficult
to insert. Written changes become confusing due to two or more counter offers. Have the seller or buyer sign the
new offer and use it. Keep the original offer with all the changes so you can go back and see what the parties were
doing if you are ever questioned.
Option 3: Prepare a counter offer form
You can use a counter offer form as an alternative to amend an original offer. To use the counter offer form,
itemize each change in detail the seller wishes to make. Have the seller sign the counter offer form, NOT the
original offer. If the buyer accepts the counter offer terms, the buyer signs the counter offer form.

Amending the Original Offer
Countering an offer by amending the original offer includes ruling out any term that is not acceptable and inserting
any term as part of the counter offer. The counter offer can also include insertions. All changes would be initialled
by the party to indicate agreement with the amended term.
Prior to any changes to a buyer’s offer, the seller’s brokerage should ensure a copy of the unsuccessful offer, as
received from the buyer, is retained.

To create a counter offer for a seller, you will need to complete specific steps to amend
the offer.
You will need to make a copy of the original offer in Step 1.

True False
the offer.
You will need to change the irrevocable in Step 2.

True False

the offer.
You will need to amend the offer by crossing out the original text and inserting the change in
Step 3.

True False
the offer.
You will need to make the initial changes in Step 4.

True False

the offer.
You will need to complete confirmation of acceptance and acknowledgement in Step 5.

True False
the offer.
You will need to present the counter offer to the buyer in Step 6.

True False

Typical Changes in a Counter Offer
Although any term of an agreement of purchase can be changed by a seller or a buyer when completing a counter
offer, there are some common terms which are the crux of the negotiations. These include the purchase price,
completion date, chattels included, and fixtures excluded from the sale of the property. Other typical changes
include the amount of deposit or modification to conditions or other terms included on Schedule A, as you learned
in an earlier module.
The following five tabs contain information on each type of change made in a counter offer. You must review all
the tabs before moving forward.
Purchase Price The purchase price is the most commonly negotiated term.
The seller might offer a price somewhere between the buyer’s offer and the original asking
price. Or, the seller might counter the offer with the original asking price, which indicates
the seller is not willing to negotiate on this term.
On a counter offer, the buyer can choose to accept the seller's proposal or make another
counter offer back to the seller.
Completion Date The completion date can financially impact a seller or a buyer, and therefore, this term
might become part of the negotiations.
For a seller, they may need more time to arrange moving, or they have a firm date for
occupancy of their new home. A completion date that is too early could cause the seller
expenses to store furniture and find interim accommodations. A completion date too late
could require the seller to obtain financing to purchase the new property while awaiting for
this transaction to be completed.
Conditions or The seller can make a counter offer that modifies or rejects one or more conditions set by
Other Terms in the buyer on Schedule A of the agreement. A seller may also want to insert a condition or
other term on their behalf. For example, a seller may want to add a clause identifying there
the Offer
is no warranty on any chattels included in the purchase.

When an offer contains a condition, such as a home inspection or approval of the buyer’s
financing, the wording of the condition should be carefully reviewed. In some instances, the
buyer might ask for too much time to complete their due diligence. A counter offer would
shorten the number of days allowing for the condition to be fulfilled.
One condition which is less appealing to a seller, is the sale of the buyer’s home. In a fast-
paced market, sellers are reluctant to accept offers with this condition as it can deter others
from viewing the property. In a slow real estate market this condition is more acceptable to
a seller as they can continue to offer the property for sale and provide notice to the buyer if
they receive another acceptable offer.
Chattels Included When viewing a property, a buyer might show interest in retaining some of the personal
and Fixtures items belonging to the seller. A discussion of the legal requirements regarding chattels and
fixtures should be held with all sellers and buyers.
Excluded
When working with buyers, ensure they understand the seller is under no obligation to
leave any chattel. Chattels can ultimately interfere with the negotiations between the seller
and the buyer. If the buyer is aware of the seller’s obligations, misunderstandings over what
will remain and what will be removed can be reduced.
To avoid fixture negotiation, it is best to advise sellers to remove and replace any fixtures
that the seller wishes to take with them, prior to showing their property to potential buyers.
For example, a dining room chandelier is considered a fixture which would remain with the
property but a seller wishes to keep it. The seller could be advised to replace the chandelier
before putting the property on the market.
Deposit The amount of the deposit is an indication of the buyer acting in good faith. A deposit that
is lower than typical offers in the trading area may give the seller concerns regarding how
serious the buyer is about purchasing the property.
If the deposit is too low, a seller might counter with an increase in the amount, when the
deposit will be made, and/or add a supplemental deposit request as a clause to the
schedule. Or the seller might be wary of the buyer’s intent and consider other offers.
A deposit made with a certified cheque submitted with the offer can also enhance a buyer’s
offer.

A couple has listed their home for sale at $495,000. They are relocating and need some
time to find a new place to buy so have set a closing date of September 30. They are
planning to take the oriental rug and crystal chandelier in the dining room with them.
A buyer has made an offer of $440,000 with a $5,000 deposit payable on acceptance of
the offer. The buyer wants to take possession as soon as possible so sets the completion
date for June 1. The buyer’s offer is conditional upon arranging a first mortgage. The
offer also includes a condition for a home inspection.
The sellers have decided to counter this offer.
Which of the following items are the sellers likely to change on the counter offer?
There are seven options. There are multiple correct answers.
1 $440,000 purchase price

2 $5,000 deposit
3 Fixtures Excluded: [blank]
4 Chattels Included: [blank]
5 Home inspection condition
6 Closing date
7 Financing condition for approval of first mortgage

Changing the Balance Due on Closing in a Counter Offer
When a counter offer contains a change to the purchase price and/or deposit, that change impacts the balance due
on closing. Depending on the wording of the clause on Schedule A under the Buyer agrees to pay the balance
statement, you will need to amend the amount. In an earlier module you learned how to calculate the balance due
on closing. In a prior module, you learned that the formula to calculate the balance due is:
Purchase price less:
• S (Seller take back mortgage)

• A (Assumed mortgage)
• D (Deposit(s))

Example 1:
A buyer is offering $300,000 for a property and will provide a $10,000 deposit upon acceptance of the offer. The
buyer is arranging a new mortgage.
For this offer, the buyer’s balance due is $290,000 as calculated:

Purchase price: 300,000
- S: 0
- A: 0
- D: - 10,000
290,000
The seller makes a counter offer of $315,000 with no other changes.

- S: 0
- A:
- D: - 10,000
305,000
Example 2:
A buyer is offering $350,000 for a property and will provide a $20,000 deposit upon acceptance of the offer. The
buyer will arrange a new first mortgage.

- S: 0
- A: 0
- D: - 20,000
330,000
On the counter offer from the seller, the purchase price is increased by $25,000 and the deposit is increased by
$5,000.

For this counter offer, the buyer’s balance due becomes $350,000 as calculated:
- S: 0
- A: 0
- D: - 25,000
350,000

From Clause DEP/PAY-1 and Form 100: Agreement of Purchase and Sale, Schedule A
All rights reserved. Used under license.
Changing the Balance Due on Closing in a Counter Offer
The example uses OREA Form 100: Agreement of Purchase and Sale, Schedule A to show changes required in the
balance due on closing clause for a counter offer. You will notice the initials of the seller and buyer positioned
against the changes made.

A buyer has offered to buy a property from a couple. Her offer is for $186,000 with a
$10,000 deposit upon acceptance of the offer. She will arrange a new first mortgage for
approximately $130,000. She will provide an additional deposit of $5,000 once her
financing condition is removed.
The couple makes a counter offer that increases the purchase price by $2,500. They also
change the additional deposit from $5,000 to $10,000.
Assuming the buyer accepts the couple’s counter offer, what is the balance due on
completion of the transaction for this scenario?
There are three options. There is only one correct answer.
1 $168500
2 $168600
3 $168400

Changing the Irrevocable in a Counter Offer
In a counter offer, you will also need to change the irrevocable. The irrevocable specifies who the offer is coming
from as well as the deadline for making the decision about the offer. Typically the buyer initiates the offer. On a
counter offer, the buyer is changed to seller by placing a line through the word buyer and inserting the word seller.
If the party making the counter offer is changing the time or date, the change is made in the same way by placing a
line through the time and/or date and inserting the new deadline. The party making the counter offer must initial
each change to identify consent to the change.

From Form 100: Agreement of Purchase and Sale, Clause 1: Irrevocability

Changing the Irrevocable in a Counter Offer
The example shows changes required in the irrevocability clause for a counter offer. It is critically important to note
any changes to this, as the timeline for responding to the counter offer has changed and any response to the
counter offer must be taken by the time indicated.

Example: Counter Offer
Simon T. Chan and his wife Valerie have made an offer to purchase a property from the Sandersons for $390,000.
The Chans’ offer includes a deposit of $20,000 upon acceptance of the offer. The Chans would like the oriental rug in
the dining room and the bar stools in the kitchen included. The offer, dated at Anycity on July 10, 2019 will be
irrevocable for two days and expires at 6 p.m. on that day. The offer has a closing date of September 6, 2019.
Counter Offer
The sellers, Eric P. Sanderson and his wife Lauren R. Sanderson, counter the Chans’ offer on July 12, for $415,000.
They amend the closing date to October 1, 2019 and extend the irrevocable period until 11:59 on July 13. The
Sandersons remove the chattels included in the buyer’s offer when countering the offer.
The following five tabs contain information on how to amend each section of the offer for the Sandersons’ counter
offer. You must review all the tabs before moving forward.
Purchase Price
The purchase price for the counter offer is amended

from $390,000 to $415,000. The sellers, Eric and
Lauren Sanderson, both initial the change.
From Form 100: Agreement of Purchase and Sale, Purchase
Price

Irrevocability
The irrevocable is changed from Buyer to Seller, the

date changes from July 12 to July 13, 2019, and the
time changes from 6 p.m. to 11:59 p.m. The sellers
initial all three changes.
From Form 100: Agreement of Purchase and Sale, Clause 1:
Irrevocability
Completion Date
The completion is extended to October 1, 2019, and

both sellers initial the change.
Completion Date

Chattels Included
The oriental rug and the bar stools are deleted and the
sellers place their initials beside the change.
Chattels Included
Balance Due on Closing
The balance due on closing increases to $395,000

based on the increase to the purchase price. Both
sellers initial each change, words and numbers.
From Form 100: Agreement of Purchase and Sale, Schedule A


Accepting a Counter Offer
To accept a counter offer from the seller, the buyer must do the following:
• Initial all changes made by the seller
• Complete and sign the Confirmation of Acceptance on the agreement of purchase and sale
• Complete and sign the Acknowledgement portion of the agreement of purchase and sale
As the salesperson for the buyer, when accepting the offer, you are required to complete the following:
• Provide a copy of the accepted offer to each buyer
• Sign the Commission Trust Agreement on the agreement of purchase and sale and obtain the listing
brokerage’s signature when providing documents to the listing salesperson
• Provide copies of the accepted offer to the listing salesperson
• Retain a copy of the accepted offer for the brokerage’s records
As the listing salesperson, provide a copy of the accepted offer to each seller and obtain their information and
signature in the Acknowledgement portion. A copy of the accepted offer is also retained for the brokerage’s records.

A buyer has made an offer to purchase a home, which the sellers countered. The buyer
has decided to accept their counter offer. The buyer works with a salesperson from a co-
operating brokerage. The sellers work with the listing salesperson.
Identify the correct statements about the steps the buyer and his salesperson take to accept
the counter offer and complete the transaction.
The buyer accepts the counter offer and initials all changes, and dates and signs the Acknowledgement
1
on the agreement.
The salesperson, after signing the Confirmation of Acceptance on the agreement, completes and signs
2
the Acknowledgement portion of the agreement providing information about his lawyer.
The buyer’s salesperson signs the Confirmation of Acceptance after signing the Acknowledgement
3
portion of the agreement.
The buyer’s salesperson after signing the Confirmation of Acceptance, distributes copies of the
4
agreement to the buyer.

Example: Counter Offer Accepted by the Buyer
The Chans have met with their salesperson, Ed Morley, to review the Sandersons’ counter offer. They decide to
accept the counter offer and Simon Chan signs the Confirmation of Acceptance at 5:00 p.m. on July 13, 2019.
This example shows the requirements of the buyers when accepting the offer.
The following seven tabs contain information on each requirement. You must review all the tabs before moving
forward.
Purchase Price
Simon and Valerie Chan, initial the changes to the

purchase price on the counter offer. This indicates their
acceptance of the terms.
From Form 100: Agreement of Purchase and Sale, Purchase Price
Irrevocability
The Chans initial the three changes the sellers made to

the irrevocable.
Irrevocability

Completion Date
The Chans initial the revised completion date.

Completion Date
Chattels Included
The Chans agree to the removal of the chattels

included by placing their initials where these were
deleted.
Chattels Included

Balance Due on Closing
The Chans initial the change to the balance due on

closing on Schedule A of the offer.
From Form 100: Agreement of Purchase and Sale, Schedule A

Confirmation of Acceptance
Simon Chan dates and signs the Confirmation of

Acceptance.
From Form 100: Agreement of Purchase and Sale,
Acknowledgement

Acknowledgment
Simon and Valarie complete the Acknowledgment

portion of the offer.
From Form 100: Agreement of Purchase and Sale,
Acknowledgement

Buyers, a couple, are offering $420,000 for a property and will provide a $30,000 deposit
upon acceptance of the offer. They will assume the existing first mortgage with an
approximate balance owing today of $300,000. The couple has the necessary funds
required to complete the transaction. The counter offer from the sellers increases the
purchase price by $30,000. The sellers would like a month more for the closing to find
another place to live. The irrevocable period is sufficient for the sellers counter offer so
the time and date remain the same. They are satisfied with the conditions in the offer.
You should change the irrevocable time and date on the counter offer.

True False

You should change the balance due on closing on the counter offer.

True False

You should change the home inspection clause on the counter offer.

True False

You should not change the deposit on the counter offer.

True False

You should not change the completion date on the counter offer.

True False

There are six tabs on this page with a summary of the key topics that were covered in this lesson.
Record keeping All offers must be in writing and signed for the offer to be valid. Retaining copies of the
offer is regulated under REBBA. An accepted offer must be kept in its entirety for six years.
Additional requirements apply to the seller’s brokerage only if an offer is unsuccessful. For
every written offer that you receive on behalf of a seller, whether it is a buyer’s first offer or
an offer with changes made during negotiations, the offer is considered a separate offer
and the seller’s brokerage is required to retain a copy. If the offer is not accepted, that is the
offer is either rejected or countered, the seller’s brokerage must retain a copy of the offer in
its entirety for one year from the date the offer is signed by the buyer. Under certain
conditions, the seller’s brokerage may keep a summary document rather than the
unaccepted offer.
Legibility The Code of Ethics requires all offers to be legible. This is to ensure the terms agreed to by
requirements the parties are clearly displayed and readable.
Countering an A counter offer is completed in one of three ways: amend the original offer, draft a new
offer offer, or prepare a counter offer form. Countering an offer by amending the original offer
includes ruling out any term that is not acceptable and inserting any term as part of the
counter offer. All changes are initialled by the party to indicate agreement with the
amended term.
Typical changes in Although any term of an agreement of purchase and sale can be changed by a seller or a
a counter offer buyer when completing a counter offer, there are some terms which typically become part
of the negotiations. These terms include the purchase price, a change of completion date,
chattels included or fixtures excluded from the sale of the property. Other typical changes
include the amount of the deposit or revisions, inclusions or deletions to a condition, or
other term included on Schedule A.

Changes required When a counter offer is being made, specific changes to the offer must be completed. The
in a counter offer irrevocability clause will require a change to the term Seller/Buyer as this indicates who the
offer is coming from. Also, confirm the time and date for the offer’s irrevocability is valid. If
a counter offer includes a change to the purchase price and/or the deposit, that change will
impact the amount identified on Schedule A for the balance due on completion. The party
making the counter offer must initial each change to identify consent to the change.
Accepting a To accept a counter offer, the party must place their initials by every change made by the
counter offer other party. This initialing indicates acceptance of those revised terms. Once an offer is
accepted, additional signing is completed by the party accepting the offer, including
Confirmation of Acceptance and Acknowledgement. The Commission Trust Agreement is
signed by the salespersons representing their brokerage when there is both a listing
brokerage and a co-operating brokerage. A copy of the accepted offer must be provided to
each seller and each buyer as soon as possible. A copy is also retained by each brokerage.

Lesson 3: Work with Competing Offers
This lesson describes the requirements under REBBA when working with competing offers and the risks associated
with multiple offer scenarios. As a salesperson, you will be relied upon to provide advice and guidance to sellers and
buyers, so the lesson includes strategies and leading practices when working with competing offer situations.

In certain market conditions; for example, in a seller’s market, sellers can be faced with multiple buyers interested in
purchasing their property. When more than one buyer is placing an offer on a property at the same time, this
situation is known as competing offers. The situation is also referred to as multiple offers. Competing offers
represent a new challenge for sellers and buyers, and place additional obligations on a brokerage.
The Code of Ethics includes specific requirements for the seller’s brokerage in a competing offer situation.
Compliance with these requirements is important to ensure all parties are treated with fairness and honesty.
Competing offers can also tempt buyers to place an offer without the same level of due diligence. As a salesperson,
you will need to advise a seller or a buyer about the different strategies and potential risks when working with
multiple offers.
Upon completion of this lesson, you will be able to:

• Identify the requirements under REBBA regarding competing offers
• Identify the risks associated with multiple offers for sellers and buyers
• Identify strategies for sellers and buyers when working with multiple offers
• Identify leading practices for the salesperson when working with multiple offers

Requirements Under the Code of Ethics – Number of Competing Offers
In certain market conditions, a seller’s property may appeal to several buyers resulting in multiple offers being
received at the same time. This competing offer situation creates unique conditions in a real estate transaction. Both
sellers and buyers need to consider how to respond when an offer is being submitted or received in a competing offer
scenario.
As the seller’s salesperson, the Code requires you to disclose the number of competing offers to all buyers who have
submitted a written offer. If there are two buyers from a cooperating brokerage, the listing brokerage should advise
each salesperson from the co-operating brokerage when there are registered competing offers, so they can make

the required disclosures if they are in multiple representation. However, the substance (terms and conditions) of
each offer are confidential to the seller and their salesperson and may not be disclosed to any other brokerage or
buyer. When there are competing offers, all buyers must be treated ethically and fairly to ensure no buyer is placed
in a better position than any of the other buyers.
If a buyer’s offer has not been presented to the seller or the seller’s salesperson, a buyer can withdraw their offer
should they choose not to participate in a multiple offer scenario. As a salesperson, a pro-active approach to
confirm the number of offers prior to submitting a buyer’s offer will result in a more informed decision by the buyer
regarding the terms of an offer, or whether to participate in a multiple offer scenario.

Requirements under the Code of Ethics – Disclosure of Agreements Relating to

Commission
When a brokerage offers a commission reduction, it is essential to create an appropriate agreement to ensure
compliance with REBBA. All commission reduction agreements negotiated by a salesperson are binding on the
brokerage. As a salesperson, ensure you are aware of any brokerage policies regarding commission prior to making
any agreement with a seller or a buyer.
In a commission reduction agreement, the listing brokerage agrees with the seller to reduce commission. This could
occur when a brokerage and seller are signing a representation agreement, or when the seller is being presented
one or more offers.
The Code requires the disclosure whenever a commission agreement could impact whether an offer to buy is
accepted by the seller. In any commission reduction situation, the listing salesperson must disclose the details and
terms of the commission reduction agreement in writing to all buyers who have made a written offer. The disclosure
must occur before the seller accepts any offer. The listing brokerage must keep a record of the disclosure. If the
commission agreement results from an offer being negotiated, a written amendment to the documented seller
representation agreement is to be provided to the seller in the event the offer is accepted. If the commission
agreement forms part of the original seller representation agreement, the listing may indicate this as a collateral
agreement. This allows all salespersons working with buyers to identify the existence of the agreement, and when in
a competing offer scenario, ensure a disclosure has been provided.
An agreement to reduce the gross commission by a brokerage may be effective only under specified conditions –
these details are documented on the seller representation agreement and may include

• When one salesperson is working with both the seller and the buyer in a transaction, the commission will be
reduced.
• When two salespersons from the listing brokerage are working with both the seller and the buyer in a
transaction, the commission will be reduced.
• When a competing offer situation exists, the brokerage may exclude any commission reduction identified on
the collateral agreement.
A commission reduction agreement is most common in these two situations:
1. One brokerage – The same brokerage is working with both the seller and the buyer. In this situation, the listing
brokerage’s offer to reduce commission could be part of the original representation agreement, or the result
of the seller receiving an offer.
2. Two brokerages – The co-operating brokerage offers to reduce the commission being paid to that brokerage.
In this situation, the buyer’s brokerage offers to reduce the commission as part of the offer negotiations, and
the listing brokerage and seller agree to reduce the total commission payable under the seller representation
agreement.
In either of the two situations, a commission reduction could result in a buyer’s offer being accepted by the seller
because the seller will receive a higher “net” value for the property than they would receive if they paid the
commission that they originally agreed to.
Example – One Brokerage:
ABC Real Estate Inc. lists a property for sale and the seller agrees to pay commission of five percent of the sale price.
The representation agreement includes a collateral agreement that indicates a one percent reduction in commission
if the buyer who purchases the property is also working with ABC Real Estate. In a competing offer situation, if ABC
Real Estate is working with one of the buyers, a disclosure of the one percent reduction must be provided to all
other buyers. If ABC Real Estate is not working with one of the buyers, the collateral agreement would not be in
effect and no disclosure is required.
Example – Two Brokerages: A salesperson representing a buyer offers to reduce the amount of commission being
paid to the co-operating brokerage by 0.5%. The buyer’s offer is for $500,000 however, with the commission
reduction, the seller will save $2,500 in commission. This results in this buyer’s offer netting more to the seller than
another offer for the same amount, but with no commission reduction. Prior to the seller accepting the offer, full
written disclosure of the commission reduction of 0.5% is made to all buyers who have currently submitted a written
offer.
Disclosure of multiple representation in competing offers is another requirement of the Code.

Requirements under the Code of Ethics – Disclosure of Multiple Representation
Multiple representation can occur whether the seller has one offer to consider or competing offers. The disclosure
requirements remain the same, however there are unique considerations relating to disclosure of multiple
representation when working in a multiple offer scenario.

There are various requirements relating to multiple representation under REBBA. A brokerage may not operate
under multiple representation unless:
• Disclosure of the proposal to represent more than one client in the same trade is made – this disclosure must
be done at the earliest opportunity and before entering into a representation agreement. This disclosure also
requires the differences in the obligations of the brokerage when operating under multiple representation be
explained.
• All clients represented by the brokerage consent in writing to the brokerage operating under multiple
representation.
In a competing offer situation, multiple representation could occur when:

• The brokerage represents the seller and the buyer in a transaction. This applies whether it is the same
salesperson or different salespersons employed by the brokerage.
• The brokerage represents multiple prospective buyers making an offer in a single transaction. This can apply
when the seller is represented by the same brokerage or a different brokerage.
The Code also requires a brokerage, when representing or providing services to more than one seller or buyer for
the same trade, to disclose in writing, at the earliest opportunity and before an offer is made, the nature of the
brokerage’s relationship to each seller and buyer.
In instances where the brokerage is representing the seller and the buyer, it should be evident the brokerage is
operating under multiple representation and disclosures and consent are required. In other instances where a
brokerage is representing multiple prospective buyers making an offer in a single transaction, it may not be evident
to the buyer’s brokerage that a single brokerage is representing multiple buyers until one or more buyers have
expressed an interest in the same property.
This knowledge may come through the listing brokerage or the listing salesperson as they are in a position to know
the source of all buyers. The listing brokerage is then expected to pass on this information to the buyer’s brokerage.
In such situations, consent to the multiple representation is required as soon as the brokerage becomes aware that
it is operating in a multiple representation situation.
While navigating through the online module, click the KMS button in the Module Resources for tools and information
on this topic.

Two or more competing offers for the same property creates a multiple offer situation.
Usually multiple offers occur when demand for properties is high and supply is low,
which is a seller’s market.
REBBA has rules that govern multiple offer situations.
Which of the given multiple offer practices comply with REBBA?
1 A competing offer must be made in writing and signed by the buyer.

2 The listing salesperson can disclose the substance of offers already made to other potential buyers.
3 The seller’s salesperson must retain a copy of only the accepted offer.
A listing brokerage that represents both the seller and a buyer must make this disclosure to all other
4
competing buyers.
A listing salesperson can offer to reduce their commission if they have a competing offer provided
5
proper disclosure is made.

Multiple representation occurs when the same brokerage represents the seller and
buyer or the same salesperson or brokerage represents multiple buyers making offers
on the same property. In either situation, certain rules apply.
Identify the three rules that apply to multiple representation in competing offer situations.
ANSWER.
The rules that apply to multiple representation in competing offer situations:

• You must have written consent from both the seller and the buyer.
• You need to disclose to anyone with a written offer if you are representing both the seller and the buyer.
• If you are the listing salesperson and receive two offers from the same co-operating brokerage, you are
responsible for informing their salespersons of the multiple representation situation.

Buyer’s Risks in a Multiple Offer Situation
In a multiple offer situation, buyers competing for a property might be tempted to increase their offer price or
remove conditions from their offers. Increasing the offer price and/or removing a condition included to protect the
buyer, such as a condition allowing for a property inspection, exposes the buyer to risk.
As a salesperson, a buyer should be made aware of certain factors when considering placing an offer in a multiple
offer situation:
• Offer Price: A high offer price can increase a buyer’s chance of success in a competing offer situation.
However, the buyer needs to consider whether or not the offer is affordable. Can the buyer finance the
amount without hardship? What will the buyer pay in interest to finance the mortgage over the long term? Is
the property worth the higher offer price?
As a salesperson, question how much the buyer can afford and research how much a property is worth. Also,
advise the buyer that an offer meeting, or exceeding the asking price, will not guarantee the seller will accept
the offer.
• Financing: If buyers are pre-qualified for a mortgage, they might consider removing a financing condition as a
tactic to improve their offer’s success. Pre-qualification for a mortgage does not guarantee approval of
financing. Most lenders require a professional appraisal of a property before approving a mortgage. An
appraiser could estimate the value of the property to be less than the amount the buyer offers. In this case,
the buyer’s mortgage might not be sufficient for the purchase price and the buyer would need to fund the
difference somehow.

In terms of financing, remind the buyer that once an offer without any conditions is accepted, it becomes a
binding contract. The buyer needs to consider the pre-approved mortgage versus the appraisal of the
property, and the potential for having to finance the difference.
• Property Inspection: Removing the condition for a property inspection in a competing offer situation might
also appear as an option to improve the buyer’s offer. However, not including a property inspection can place
the buyer in a risky situation. On viewing the home, it might appear to be in good repair. However, once
ownership takes place, the buyer might discover defects, which can lead to costly repairs and potential
upgrades.
A qualified and reputable property inspector can highlight potential problems and improvement for a property
and their associated costs. Advise the buyer of the risk in omitting a home inspection condition.
When working with buyers in a competing offer situation, caution them around the risks involved. Remind them of
the legal obligation incurred once an unconditional offer is accepted.
Certain strategies can be used by a buyer to increase the appeal of their offer while not being exposed to the same
level of risk.

Strategies for Buyers When Working with Multiple Offers I
As a salesperson representing a buyer in a competing offer situation, you are required to promote and protect their
best interests. You want to provide conscientious and competent service and negotiate a transaction which results
in an accepted offer for your buyer. At the same time, you want to treat the seller with fairness.
To assist a buyer, it is important to understand what could occur in a competing offer situation. Small details within
an offer can impact a seller’s decision. Being aware of these small details is the first step to assisting the buyer in
their purchase. No single strategy is guaranteed to work; however, you need to understand some typical options to
give buyers a possible advantage.
The following four tabs contain information on each strategy when working with buyers in a multiple offer
situation. You must review all the tabs before moving forward.
Best Offer First When demand for housing is high, the seller has the advantage. In a seller’s market, the
strategy of making the buyer’s first offer their best offer is common.
A buyer may hesitate with this strategy, as it provides little or no room for negotiations.
However, leading with a strong offer might be the only opportunity for the buyer’s offer to
be considered by the seller.
To assist a buyer, you should know what a strong offer looks like in your local market. Each
market can be different, however analyzing past sales to see the sale to listing price ratio
would be important information.
Example: Four recent sales have occurred where the transaction was negotiated in a
competing offer scenario. The information obtained include

Listing Price Sale Price Sale to List Ratio
$300,000 $315,000 105%
$309,000 $322,000 104%
$295,000 $310,000 105%
$299,000 $319,000 107%
A buyer would want to consider this type of information when determining an appropriate
offer price.
Ensure you have researched all recent comparable sales in the neighbourhood and use this
historical data to assist in current negotiations.
Pre-approved Buyers are well advised to get mortgage pre-approval and discuss their financial situation in
Mortgage depth with their lender. A buyer should know in advance what the maximum amount a
lender will provide in financing. This amount, together with the buyer’s down payment, will
provide guidance on the maximum purchase price. Remember though, a pre-approval does
not guarantee the funds will be advanced. As a salesperson, view the property in terms of
factors that may impact a lender’s decisions, such as deferred maintenance, neighbouring
property conditions, or the age and condition of the structure and major components, such
as the heating and electrical systems. By completing this due diligence in advance of an
offer, the buyer can be more confident in their buying power.
Deposit A large deposit can give a seller more confidence about the seriousness of a buyer’s offer
and the buyer’s ability to finance the property.
If the offer is conditional on financing, a large deposit can also provide the seller some re-
assurance of the buyer’s financial status. Having a large deposit typically indicates financing
approval is more likely to occur.
Making the deposit with the offer by way of a certified cheque can also provide assurance
to sellers

Proof of Funds A buyer’s offer, whether it includes a financing condition or not, can be more desirable to a
seller if there is an assurance the buyer has funds available to complete the transaction.
Suggest the buyer speak with their lender and obtain a letter indicating the buyer’s financial
ability. Although an appraisal may indicate the property’s value is less than the purchase
price, a buyer could have sufficient funds to make up the difference. In other instances, it is
the property and not the buyer’s ability to pay that reduces the amount of financing a
lender will provide. Showing financial strength to a seller can increase confidence in the
buyer’s offer.

Strategies for Buyers When Working with Multiple Offers II
The following four tabs contain information on more strategies when working with buyers in a multiple offer
Completion Date Sellers can be influenced by the completion date chosen. When drafting an offer for the
buyer, pay attention to the listing data sheet to see what the seller’s preference is. Timing
can have an impact.
For example, a seller might need time to find another home, or prefer to finish the season
at a vacation property before the sale is completed. A buyer who is flexible on the
completion date might be one reason why a seller chooses their offer.
Conditions The strength of an offer is not based solely on price, it is the cumulative effect of every term
that ultimately impacts acceptance of a buyer’s offer.
In a multiple offer situation, the buyer needs to consider the value of having conditions in
the offer versus making an unconditional offer which becomes firm and binding once
accepted.
An unconditional or firm offer might be more desirable than one with conditions and a
higher price. However, sellers will also consider the firm offer and the ability of the buyer to
complete the sale. A firm offer does not guarantee a completed transaction.
When including conditions in an offer, ensure the time period to complete the due diligence
is reasonable and the condition shows an honest attempt by the buyer to have it fulfilled.
For example, a financing condition that identifies specific terms may appear as a more
honest attempt than a financing condition that allows the buyer a lot of latitude in
determining whether it is fulfilled. This is also true with a property inspection condition. In
some instances, a property inspection condition which allows a specified dollar figure in

repairs to be reached before being able to cancel an offer might be more desirable than a
condition that states “in the buyer’s sole and absolute discretion”.
A buyer needs to be cautious about the risks associated with not including any conditions,
and should be aware that some conditions can be included which are more favourable to a
seller than others.
Inclusions In a multiple offer situation, buyers might want to leave out the chattels they were hoping
the seller would agree to include in the sale.
An item that might seem insignificant to the buyer might be important to the seller.
Including that item can have an impact on the seller’s view of the offer. Advise buyers it
might be best to not complicate their offers with too many inclusions.
Irrevocable Period The time the seller has to accept the offer (the irrevocable period) can be another factor in
a multiple offer situation.
The right price combined with a shortened irrevocable time period can help put the buyer
in a better negotiation position. On the other hand, pressuring the seller to make a decision
before they are ready, can result in the offer being rejected.
A long irrevocable can give the seller more time to make the choice between offers or allow
the seller to find more offers, but this puts the buyer at a disadvantage. The irrevocable
time period should be discussed with the buyer to ensure they understand their obligations
related to this.

Seller’s Risks in a Multiple Offer Situation
When sellers receive multiple offers on their property, they have a decisive advantage. While price can influence
their decision, they need to consider other factors to ensure a successful sale that meets or exceeds their
expectations.
Once the offers are presented, the seller can accept one, make a counter offer, send offers back for improvement,
or reject them all.
Here are three factors sellers should consider in offers and their associated risks:
1. Conditions: If a seller accepts an offer with conditions, the risk is the potential loss of the transaction if
conditions are not met. Along with that loss is the potential loss of offers from other interested buyers.
A buyer not including conditions in an offer also presents a risk. For example, a buyer who has financing pre-
approval does not include a financing condition in their offer, however the pre-approval does not guarantee
the lender will approve the buyer’s mortgage. If the buyer cannot arrange the required financing, the sale
might not be completed. This could result in the seller needing to re-list the property for sale several weeks or
months later.
2. Countering Offers: The seller can counter an offer for one of the buyers. That buyer, however, may decide
against the counter offer. Other buyers who made offers may have placed an offer on a different property,
resulting in the seller losing the opportunity to accept or negotiate other offers.
3. Rejecting Offers: The seller can reject all offers and advise buyers to bring back their best offer at a specific
time. This strategy might result in buyers deciding not to participate. Once an offer is rejected, a buyer is no
longer obligated to the offer.
Certain strategies can be used by a seller when assessing the strength of various offers being received at the same
time.

Strategies for Sellers When Working with Multiple Offers

Sellers receiving multiple written offers for their property is an exciting and desirable situation. At the same time,
the seller has to consider how to handle the offers. Your role as a salesperson is to help the seller remain focused
and make the best decisions. To do this, you need to understand some typical options to consider when working
with multiple offers.
The following three tabs contain information on each strategy when working with sellers in a multiple offer
Irrevocable Period All offers will identify the irrevocable period. A seller must address the buyer’s offer within
this time period, otherwise the offer becomes null and void. It is your responsibility, as the
seller’s salesperson, to ensure every offer’s irrevocability is identified and the time period
monitored.
If there are several offers which appear similar, a seller may be able to negotiate one of the
offers during the irrevocable time period of the other offers. This would allow a seller to still
consider one of the other offers should the offer they choose to negotiate not result in
acceptance.
Offer The seller may request that the listing salesperson withhold any offer presentations until a
Presentation Time specific day and time. Offers can be registered, but no offers will be presented to the seller
until this time.
An offer presentation time allows a seller the opportunity to have as many buyers view the
property and consider placing an offer before addressing any offer. The intent would be to
generate interest, build competition, and produce more offers for the seller to consider.
Property In some circumstances, a seller could obtain a property inspection report and make this
Inspection Report report available to any buyer during the property viewing. This would indicate the seller is
providing as much information as possible about the property. The result could be an offer
that is higher priced with fewer conditions as the buyer is more aware of the structure’s
condition. This might be an acceptable approach in several circumstances, such as when
the home is older or the seller has not lived in the property (e.g., the property is inherited or
being sold by the estate).

You are working for a couple who want to make an offer on a property listed at $450,000.
The property is in a highly desirable area of the city although it is listed as needs repairs
and sold “as is”. Your market research shows homes in the area have sold for $500,000
and up. The couple has a pre-approved mortgage for $450,000 and $50,000 in the bank
for a down payment. They also have a certain tolerance for risk and have family available
to guarantee any mortgage up to a certain amount. You learn from the listing
salesperson the property has three offers registered. The sellers want a closing date of
August 31.
You should advise the couple to make an offer of not more than $500,000.

True False

August 31.
You should advise the couple to waive a home inspection.

True False

August 31.
You should advise the couple to make the completion date on the offer August 31.

True False

August 31.
You should advise the couple to make a deposit of $25,000 upon acceptance with an
additional deposit of up to $25,000 on a certain date or condition.
True False

August 31.
You should advise the couple to waive a financing condition.

True False

You work for a seller of a property listed at $295,000. The property is in good condition in
a desired neighbourhood. The seller is considering four offers. The sellers cannot move
for at least three months.
Which one of the offers provides the least risk to the seller? Choose the best offer.
A $290,000 offer with a $15,000 deposit on acceptance. The offer is conditional on the buyers selling
1
their home.
A $292,000 offer with a $10,000 deposit on acceptance. The offer has financing and home inspection
2
conditions and a short closing date, only four weeks from now.
An offer of $289,000 with a $25,000 deposit on acceptance of the offer. The only condition is a home
3
inspection.
An offer of $291,000 with a $5,000 deposit upon acceptance. The offer has no conditions and has a long
4
list of chattels included.

You work for a seller of a property listed at $335,000. The property is in good condition
in a desired neighbourhood. Based on the aggressive pricing and current market
conditions, you are expecting to receive multiple offers on the property.
What strategies can you use to help the seller obtain and work with multiple offers?
If several offers appear similar, the seller may be able to negotiate one of the offers during the
1
irrevocable time period of the other offers.
The seller could obtain a property inspection report and make this report available to any buyer during
2
the property viewing.
With the seller’s agreement, provide an offer presentation time. Offers can be registered, but no offers
3
will be presented to the seller until the stated time.
4 Advise the seller to be firm with the completion date.

Leading Practices When Working for Buyers in Multiple Offer Situations
At all times, a salesperson must ensure a buyer is making well-informed decisions and a transaction is being
negotiated ethically and fairly. As a salesperson, your actions can impact the results of a buyer’s offer. Consider the
following leading practices when working with a buyer in a competing offer situation.

• Research the market to know what comparable properties have sold for recently.
• Know what price the buyer is qualified to pay. You can suggest the buyer discuss mortgage options with a
lender in advance to understand their financing position. Discourage buyers from overextending their offer
beyond what they can afford.
• Encourage the buyer to make the largest deposit they can to demonstrate their interest and commitment to
the purchase.
• Ensure the buyer understands and is comfortable with the risks associated with not including conditions in
their offer.
• Be pro-active and suggest the buyer bring along someone when viewing a property who can capably assess
the condition of the structure or identify any environmental concerns.
• Consider the time period for the irrevocable period. Allowing an extended time period for a buyer’s offer
places them at a disadvantage as this allows the seller to address other offers in the interim.
• Be prepared to act quickly. Ensure the buyer understands how events can unfold and prepare them for the
necessary paperwork in advance.
• Remind buyers that in a multiple offer situation, the highest priced offer is not always accepted and it might
take several offers on different properties before their offer is accepted.
• Advise buyers to be readily available during the time period when offers are being presented. This will allow
for any counter offer to the buyer to be addressed quickly.
• Before presenting an offer, contact the listing salesperson to confirm the current number of offers. Ensure the
buyer is prepared to enter a competing offer scenario and may be required to make their first offer their best
offer.
• Register the offer, which means get it signed and let the listing salesperson and brokerage know you have an
offer.
• Consider presenting the offer in person. Having face-to-face contact can give you the opportunity to position
the buyer and explain their offer to the seller.

Leading Practices When Working for Sellers in Multiple Offer Situations
Communication with all parties involved in a multiple offer situation is vital. Consider the following practices to help
you manage a competing offer situation with a seller.

• Before presenting offers, meet with the seller and review the standard clauses contained in the agreement of
purchase and sale to ensure they understand the legal obligations if an offer were to be accepted.
• Ensure the seller understands the required disclosures to buyers submitting written offers. You will be
required to disclose the number of offers, multiple representation, and commission agreements.
• Do not disclose any information to other brokerages or buyers regarding the details of any competing offer.
• Educate the seller on the process and what to expect. If using a presentation date, choose a date and time for
reviewing offers that are convenient to the seller. Discuss the options the seller has once all offers have been
presented.
• Unless instructed by the seller otherwise, convey each offer to the seller as soon as possible. Only counter one
offer at a time. Consider whether an offer that is substantially lower than others is worth countering. If you
send back a buyer’s offer for improvement, ensure the seller understands that the buyer can walk away.
• As soon as an offer is registered, notify the other salespersons who have shown the property in an attempt to
generate additional offers for the seller.
• When a second offer is registered, contact the salespersons who registered the first offer and advise them
they are in a multiple offer situation. Keep people informed as other offers get registered. Keep track of all
contact information.
• Consider communicating to the salesperson what the seller wants along with any special instructions. Also let
them know of any changes to the process. Ensure the same information is provided to all brokerages and
salespersons to ensure no buyer has an advantage.
• Prior to presenting offers to the seller, notify all salespersons who have registered offers, to inform them of
the total number of offers. If an offer arrives while you are presenting offers (a late offer), notify all
salespersons with registered offers that the number of offers has changed.
• Once the seller has accepted an offer, inform the other salespersons of the offer status.
• Ensure you submit to the brokerage copies of all unsuccessful offers, including original offers and any counter
offers (or a summary document when applicable).
While navigating through the online module, click the KMS button in the Module Resources for tools and information
on this topic.

As a salesperson you can find yourself dealing with multiple offers. Whether you are
working for the seller or the buyer, some leading practices are the same for both parties.
Identify at least three leading practices that apply to working with both sellers and buyers.
ANSWER.
Leading practices that apply to working with both sellers and buyer:
• Research the market to know what comparable properties have sold for recently.
• Meet with the seller or buyer to review the standard clauses contained in the agreement of purchase and
sale.
• Ensure sellers and buyers understand and are comfortable with the risks associated with removing
conditions from offers.
• Consider the time period for the irrevocable clause.

There are five tabs on this page with a summary of the key topics that were covered in this lesson.
Required disclosures When a seller receives competing offers, the following disclosures are required by the
seller’s salesperson to every buyer who has submitted an offer:
• The number of offers received, but not the contents of any offer
• Any commission agreement with the seller that might impact whether a buyer’s
offer is accepted
• The representation status when a brokerage is operating under multiple
representation
• The nature of the relationship to each seller and buyer when the brokerage is
representing or providing services to more than one seller or buyer for the same
trade
Risks and strategies Risks for a buyer include: offering a price for a property that cannot be financed or is
for buyers when above appraised value; relying on a pre-approval for a purchase but finding out before
closing that circumstances have impacted the approval; not including conditions meant
working with
to protect the buyer, such as a property inspection.
multiple offers
Certain strategies can be used by a buyer to increase the appeal of their offer while not
being exposed to the same level of risk. Strategies to consider for a buyer include:
making their first offer their best offer; ensuring the market place has been analyzed to
ensure the offer reflects the current conditions; obtaining a pre-approved mortgage;
making a large deposit with a certified cheque; providing the seller with proof of funds
along with any offer; being flexible for the completion date; ensuring conditions are
appropriately worded and the time period for due diligence is reasonable; minimizing
the chattels included; ensuring the irrevocable time period is reasonable and
appropriate based on market conditions.

Risks and strategies Risks for a seller include: accepting offers with conditions if the buyer cannot fulfill the
for sellers when condition; countering an offer which could result in the buyer not accepting the offer;
rejecting the offers which could result in buyers deciding to no longer participate in the
working with
offer process.
multiple offers
Certain strategies can be used by a seller when assessing the strength of various offers
being received at the same time. Strategies to consider for a seller include: using the
irrevocable period to the best advantage of the seller while ensuring the irrevocability of
other offers is monitored; set an offer presentation time to allow for more offers to be
obtained; providing as much information about the property as possible to allow buyers
to make fully-informed decisions about the property.
Leading practices for Prepare the buyer for making an offer by educating the buyer on the process, the terms
a salesperson of the agreement of purchase and sale, and the best strategies for their offer and the
associated risks.
working with buyers
Communicate with the listing salesperson to stay informed on the process, register and
present your buyer’s offer, and be available for quick revision of an offer.
Leading practices for Prepare the seller for reviewing offers by ensuring the seller understands their
salespersons obligations related to accepting an offer, discussing the offer process and how multiple
working with sellers offers will be addressed, and educating the seller on the strategies for dealing with
offers, and the associated risks.

Summary Practice
This lesson provides a series of activities that will test your knowledge on the entire module.

This lesson provides a scenario for which the possible errors, omissions, details to be filled in the form and other
concerns on each page of the Agreement of Purchase and Sale have been discussed.


Mr. Wayne Chisolm and Mrs. Sylvia Chisolm are negotiating the purchase of a property. Their salesperson drafted
and presented an offer on their behalf, which the sellers countered.
The possible errors, omissions, and other concerns on page one of the agreement of purchase and sale prepared
for Mr. and Mrs. Chisolm and countered by the sellers regarding 3291 Forest View Parkway in Anycity are as follows:
Under the Deposit section:

• Buyers’ initials are required for the change to the deposit.
• Deposits are typically held by listing broker only. They cannot be held jointly by two brokerages.
Under the Irrevocable section:

• The offer should have been irrevocable by the buyer initially and then amended to read as seller.
Under the Initials section:

• Initials are reversed at the bottom of the page: the sellers initialed the buyers’ initials location, and the buyers
initialed the seller’s initials location.


The possible errors, omissions, and other concerns on page two of the agreement of purchase and sale prepared
Under the Chattels Included section:

• The description of the security system and the lower family room furnishings is incomplete.
Under the Fixtures Excluded section:

• The Chattels Included clause shows all drapes included. The Fixtures Excluded clause excludes the living room
drapes as fixtures.
Under the Initials section:

initialed the sellers’ initials location.

The possible problem on page three and four of the agreement of purchase and sale prepared for Mr. and Mrs.
Chisolm and countered by the sellers regarding 3291 Forest View Parkway in Anycity is that the initials are reversed
at the bottom of the page: the sellers initialed the buyers’ initials location, and the buyers initialed the sellers’ initials
location.


The possible errors, omissions, and other concerns on page five of the agreement of purchase and sale prepared
Under the Spousal Consent section:

• Marilyn Mostofi’s signature is in the wrong location. She should sign as a seller, not under spousal consent.
Under the Confirmation of Acceptance section:

• The co-operating salesperson signed the Confirmation of Acceptance. It should be signed by the last person
signing the counter offer. In this instance, one of the buyers, Silvia or Wayne Chisolm, should sign.
Under the Acknowledgment section:

• Wayne Chisolm’s signature and required date are missing from the Acknowledgment.


The possible errors, omissions, and other concerns on Schedule A (Page 6) of the agreement of purchase and sale
prepared for Mr. and Mrs. Chisolm and countered by the sellers regarding 3291 Forest View Parkway in Anycity are
as follows:
Under the Pay Further Sum section:
• The additional amount to pay should be $225,000 ($250,000 purchase price – $10,000 deposit – $15,000 seller
take back mortgage).
Under the Mortgage condition fulfilment date section:
• The mortgage condition fulfilment date should be before the title search date stated on page three. Note:
While this is difficult to see here, it highlights the importance of comparing information from different pages.
Under the First Mortgage section:
• The wording should be changed to “not more than” and the waiver provision should be deleted to prevent a
possible fraudulent offer. As an alternative, a standard mortgage clause could be added to the agreement.
Under the Seller Take Back section:
• This should be conditional on a credit check of the buyers.
Under the Leakage section:
• The clause does not adequately protect the buyer.

Under the Easement section:
• The easement description poses problems, as it is indefinite regarding location. Further, no reference to
easement appears in the legal description. The issue should have been addressed prior to drafting the
agreement, by attaching a survey showing the easement, or inserting an appropriate condition to investigate
further if it was not possible to clearly establish its location. Legal advice should be sought.
Under the initials section:
initialed the sellers’ initials location.
Under the Agreement of purchase and sale and the Schedule A section:
• The agreement of purchase and sale have the sellers’ and buyers’ names written one way and an initial added
on the Schedule A.


Module Summary | Page 1 of 4
Module Summary
This lesson contains a summary of the entire module and a list of helpful resources available in the Knowledge
Management System.

Congratulations, you have completed this module!
This lesson will present a summary of Learning Objectives and a list of helpful resources that you can search for in
the Knowledge Management System.

There are three tabs on this page with a summary of the key topics that were covered in this module.
Complete an A fundamental part of working as a salesperson involves completing an agreement of

agreement of purchase and sale. When doing so, you will need to ensure dates within the agreement
align. To do so, you will need to identify key dates when drafting an offer. The offer plan
purchase and sale
should itemize these five dates in the following chronological order: Offer date,
with conditions
Irrevocable, Expiry of conditions – conditional date, Requisition – title search date, and
Completion or closing date.
For Schedule A, which is part of every offer, you will need to itemize the required clauses
for the offer. A clause identifying the balance due on completion must be included in
every offer. Other clauses and conditions, such as obtaining financing or a property
inspection, are also added to Schedule A.
Stacking refers to a way of grouping and writing conditions that are required to be
fulfilled by the same date. With stacking, the party responsible for completing the
conditions is clear. There’s a single fulfillment or waiver date for multiple conditions.
Stacking conditions avoids repetitive language for several different clauses.
Complete a counter As a salesperson, you will need to understand and complete counter offers.
offer
All offers must be in writing and signed for the offer to be valid. Retaining copies of offer
is regulated under REBBA. The Code of Ethics requires all offers to be legible.
A counter offer is completed in one of three ways: amend the original offer, draft a new
offer, or prepare a counter offer form.
Terms which typically become part of the counter offer negotiations include the
purchase price, a change of completion date, chattels included or fixtures excluded from
the sale of the property. Other typical changes include the amount of the deposit or
revisions, inclusions or deletions to a condition, or other term included on Schedule A.

When a counter offer is being made, specific changes to the offer must be completed,
such as the irrevocability clause. The party making the counter offer must initial each
change to identify consent to the change. To accept a counter offer, the party must place
their initials by every change made by the other party.
Completion of this lesson has enabled you to:

• Identify the requirements under REBBA when an offer will be countered rather
than accepted
• Identify the steps when an offer will be countered rather than accepted
• Describe what changes are typically made when countering an offer
• Complete an agreement of purchase and sale that includes a counter offer
Work with A competing offer is when more than one buyer places an offer on a property at the
competing offers same time. These situations represent a new challenge for buyers and sellers, and places
additional obligations on a brokerage.
The Code of Ethics includes specific requirements for the seller’s brokerage in a
competing offer situation. Compliance with these requirements is important to ensure all
parties are treated with fairness and honesty. Competing offers can also tempt buyers to
place an offer without the same level of due diligence. As a salesperson, you need to
advise a seller or a buyer about the different strategies and potential risks when working
with multiple offers.
Completion of this lesson has enabled you to:

• Identify the requirements under REBBA regarding competing offers
• Identify the risks associated with multiple offers for sellers and buyers
• Identify strategies for sellers and buyers when working with multiple offers
• Identify leading practices for the salesperson when working with multiple offers

Module Resources
There are two helpful resources related to this module that you can search for in the Knowledge Management
System.
1. Multiple Representation: This bulletin describes the disclosure obligations of a brokerage before it enters into
a multiple representation situation. This includes representing a seller and buyer or multiple prospective
buyers in the same transaction.
2. Written Direction for Multiple Offers: This bulletin explains the requirements of a salesperson to convey an
offer to clients and customers as soon as it is reasonably possible. It also focuses on the conduct of seller
representatives in multiple offers and delayed offer circumstances.
While navigating through the online module, click the KMS button for tools and information on this topic.

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Module 18: Completing a Residential Agreement of Purchase and Sale,

Countering an Offer, and Working with Competing Offers

©2019 Real Estate Council of Ontario

©2019 Real Estate Council of Ontario

©2019 Real Estate Council of Ontario

Number of Lessons 5 Lessons

Lesson Number Lesson Name

©2019 Real Estate Council of Ontario

Lesson 1: Complete an Agreement of Purchase and Sale with Conditions

©2019 Real Estate Council of Ontario

Upon completion of this lesson, you will be able to

©2019 Real Estate Council of Ontario

Information to Identify in an Offer Plan Related to Conditions

• Required Dates (Step 2 of the offer plan)

©2019 Real Estate Council of Ontario

• Required Clauses (Step 3 of the offer plan)

To organize the clauses, use these steps as a guideline:

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Guidelines for Writing Multiple Clauses

©2019 Real Estate Council of Ontario

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From SBP/SA-1 – Condition—Buyer’s Property

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©2019 Real Estate Council of Ontario

Identify whether the given statement is true or false.

Identify whether the given statement is true or false.

©2019 Real Estate Council of Ontario

Identify whether the given statement is true or false.

Identify whether the given statement is true or false.

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Identify whether the given statement is true or false.

1 Review all clauses that you plan to add to a schedule.

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1 The offer is easy to read.

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1 May 17, 20xx

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©2019 Real Estate Council of Ontario

©2019 Real Estate Council of Ontario

Identify whether the given statement is true or false.

©2019 Real Estate Council of Ontario

©2019 Real Estate Council of Ontario

Identify whether the given statement is true or false.

©2019 Real Estate Council of Ontario

©2019 Real Estate Council of Ontario

Identify whether the given statement is true or false.

©2019 Real Estate Council of Ontario

©2019 Real Estate Council of Ontario

Identify whether the given statement is true or false.

©2019 Real Estate Council of Ontario

©2019 Real Estate Council of Ontario

Identify whether the given statement is true or false.

©2019 Real Estate Council of Ontario

©2019 Real Estate Council of Ontario

©2019 Real Estate Council of Ontario

©2019 Real Estate Council of Ontario

Identify whether the given statement is true or false.

©2019 Real Estate Council of Ontario