Whether home ownership is a distant but definite dream of yours, or you’re already shopping the market and you think you’ve found “the one,” there are some things you should know about how to make an offer. If you’re working with a professional real estate agent, he or she will shoulder this burden on your behalf, but understanding the process will help you make the right decisions. Here’s what you can expect when making a purchase offer in this market.
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Once you’ve found your dream home, be prepared to act quickly. Current seller’s market conditions mean you won’t have the luxury of time. If you love the home, chances are that someone else does too. Have your mortgage pre-approval and your deposit (Yes, you’ll need access to the deposit funds when making your offer). A mortgage pre-approval tells you how much a lender is willing to finance, based on your income, employment, credit rating and other factors. When push comes to shove (which aptly describes the competition between buyers these days!) this gives you the added confidence of knowing how much you can spend.
Your offer should include a few standard items, including your legal name, the name of the seller, and the address of the property; the price you’re offering to pay and the deposit amount; any chattels that you’d like included as part of the sale, such as appliances or window coverings; the possession date; request for a land survey; the offer expiry date; and any other conditions such as a home inspection.
Buyer beware! In a strong seller’s market, your negotiating power will be limited. Having too many conditions attached to the offer will make it less appealing to the seller. If the goal is to have your offer accepted, minimize the conditions and maximize the price. With that said, a home is a huge investment, so do your due diligence and know what you’re getting yourself into.
Keep in mind that you can appeal to the seller in other ways, too, like agreeing to their desired closing date, increasing the deposit amount, or you can even try writing a personal letter. But in most cases, money talks.
Your agent will present your offer to the seller via their listing agent, if they are working with one. The seller can choose to accept your offer, reject your offer, invite you to submit another offer, or send you a counter-offer which you can then accept, reject or counter. If you have any negotiating room, here’s where you’ll need to put your skills to work. Once the seller accepts your offer, you’ll sign a pile of paperwork called a “purchase agreement, which” binds both the buyer and seller in a legal contract.
Whether this is your first offer to purchase or your tenth, and whether it is accepted or not, is just the beginning. Enjoy the home hunt. This seller’s market yes , is challenging, but it’s not insurmountable. And remember that a little professional help can go a long way. Reach out with all your real estate questions