Multiple Offers on a House in Alberta: How the Process and Rules Work

When two or more buyers want the same house, everything moves quickly. Sellers have to compare offers that differ in price, conditions and timing. Buyers have to decide how much to put on the table without knowing what others have offered.

This article explains how competing offers generally work in Alberta, how deposits and conditions fit in, and what questions to put to your brokerage. It does not replace advice about your own offer, which is worth getting from a lawyer.

This article covers the law of Alberta.

How a multiple-offer situation generally works

In a multiple-offer situation the seller receives more than one offer, usually through the listing brokerage, and decides whether to accept one, counter one, or ask for improved offers. Buyers each work through their own brokerage.

Conditions, the deposit, financing terms and the completion date all affect how attractive an offer is.

What makes offers different from each other

A standard contract is used for residential purchases, and it sets out the buyer, seller, property details and financing terms, including the deposit amount. Those terms are where offers tend to differ.

• Price and deposit amount, which is set out in the contract.
• Financing terms, which are also set out in the contract.
• Conditions such as a home inspection, which is not unusual in a residential purchase.
• For a condominium, a condition to review condo documents, which should be timed so the request for the estoppel certificate fits inside the condition period, since the corporation has 10 days to provide it.

After an inspection, a buyer may withdraw the offer, adjust the price to cover repairs needed, or move forward. A buyer who gives up conditions to compete takes on more risk, so think about that before you do.

Deposits and trust money in a competing-offer situation

Money received in trust must be deposited within 3 business days of receipt, and for money received with an offer to purchase, the 3 business days run from acceptance of the offer. Trust money must be kept separate from the licensee's own money and on deposit in Alberta, with an exception for licensees with business premises in Lloydminster.

If an expected deposit is not received or a deposit cheque is not honoured, the brokerage must notify all parties in writing. An associate must tell the broker if an expected deposit has not been received.

Trust money may be paid out only under the Rules and the written terms of the trust agreed to by all parties. Anyone who has a waiver or release of these trust-account duties from a client should know that such a waiver is void.

Disclosure, ranking and fairness: questions to ask

People often ask what a brokerage may tell you about other offers, how offers are presented and ranked, and what fairness duties apply. The answers depend on the Real Estate Act Rules, the seller's instructions and the agreement between you and your brokerage. Before a brokerage receives money, a licensee must sign a service agreement that sets out how money will be received, held and disbursed.

• Ask your brokerage, ideally in writing, how offers will be presented and in what order.
• Ask what, if anything, will be shared about competing offers and with whom.
• Ask whether the seller has set a deadline for offers.
• Confirm how your deposit will be handled and when it will be deposited.
• If you are the seller, ask how the brokerage will help you compare conditions, not just price.

If you think you have been treated unfairly, a lawyer can review what happened and explain your options.

What to do next

Buyers may have a lawyer review the agreement before signing. In a fast-moving situation, it can help to arrange that in advance so you are not rushed.

• Decide your limit and your must-have conditions before offer day.
• Have your financing confirmed so you understand what you can offer.
• Have a lawyer review the contract before you sign.
• Keep copies of everything you sign and every message about the offers.
• Remember that claims arising from a contract generally must be brought within 2 years of when you knew or ought to have known of them, or 10 years after they arose, whichever expires first.

Frequently asked questions