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The time allotted for you to address the clauses in your offer is your due diligence period. Unless you are writing a no-subject offer (there are many scenarios to writing offers and negotiating, so ensure that your agent has the knowledge and expertise to guide you through these waters) your offer will contain not only an offering price and dates for completion, possession and adjustment, but also “subject to” clauses.
Subject clauses are items that you want satisfied prior to waiving or removing them from the contract. For example: “Subject to the Buyer receiving and approving a copy of the title search results on or before (date)”. This clause is for your benefit. You want an opportunity to review a copy of the title prior to committing to purchase this home. Sounds fair and logical, right? Right. You may have a number of “subject to” clauses, such as a home inspection clause, financing clause or a clause to review the documents that are part of a strata-titled property purchase. Your agent will be advising you what important and appropriate subject clauses should be inserted into the contract of purchase and sale to protect you, with respect to the property.
Think of the buying process as a puzzle and the “subject to” clauses are pieces to the puzzle. Once we have all the pieces put together we have a complete picture of the property. With a complete picture we ask ourselves, “Okay, what is my element of risk on this home. Am I comfortable with this?” If yes, the next step is to waive, or remove the “subject to” clauses from the contract. This is done in writing and the listing agent is supplied a copy of same. If not, then you will not remove the clauses. But remember – the offer document is a legally enforceable contract and as such, there has to be validity in your reason for not moving forward.
> Go to Step 8
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