Here are some tips a and tricks on how to win an offer of the house you’ve always wanted. As I have more than 25 years of experience as a Toronto real estate professional, I can imagine how confused a client might feel when they find out there are 15 or sometimes even more people who want to purchase the same property. Naturally this article is not enough for a greenhorn to become a successful buyer, but in any case it can bring you some useful tips and prevent you from spending more money than necessary.
How to get prequalified
Prospective clients who can get prequalified for a bank loan always have a better chance of getting the deal than applicants without a proper financial background. The house owner has to be sure that you are able to pay for the home – when your financing is not clear, all the other advice will not help.
Get to know what or who the seller wants
Try to find out about the owner’s requirements, as it would be a waste of time if there were some details that you were not able to meet. So we strongly recommend you to get all the detailed information before you present your offer. It is better to stop trying in case you find out you are not able to meet them. If the requirements are such that you can meet them, work with your agent on a brief summary that will go together with your proposal. This summary gives the vendor some knowledge about you and focuses on your proposal’s pluses.
Don’t underestimate the price
If you were the owner, of course you would be insulted if someone offered a too low price for your house, and then probably you would choose another applicant. So you want to be careful about this. Once you damage your reputation, it is not improved even after offering a higher offer later. What you want to do is to shoot about $1,800 to $4,800 higher over the highest expected bid. Let’s say the highest bid is thought to be $470,000. Throw in a bit and propose let’s say $473,164 – you don’t always have to bid an even numbered price!
Down payment
In any case it makes you look solid if you can pay from at least 10% to 20% of the home price in advance. Of course in most cases you can try to bargain the final amount of your down payment with the seller after the contract has been secured and usually with a success outcome. The most important thing is the money you pay when the deal is closed so that you look like a respectable buyer.
Earnest money deposit
The following trick might look a little too determined, but it may help you a lot. Pay the earnest money deposit as high as you can afford, as part of the down payment. The earnest money deposit would be lost if you change your mind later and decide not to go through with the deal. Since the good faith deposit money is a part of your down payment anyway, it makes no difference to you, but makes a great impression on the buyer. It tells the owner that you really want to go through with the deal. This means that the earnest money deposit serves as a measure of your real interest in buying the property, regarding the fact that after signing the contract, you can usually change the amount of the down payment.
Propose a short rent-free stay
In the summary accompanying your offer, offer a free-post occupancy agreement to the seller in case they need a some time in the property after it’s been sold to settle their affairs. This might be the final aspect that plays for you to win the deal, as in a different situation the seller would have to pay some rent, being no longer the owner of the house.
Tags: buyer, offer, Real Estate, toronto