Making an offer you can afford
This is where the rubber meets the road — and where I earn my stripes. After weeks or months of planning, preparing and searching, you’ve finally found a home on which you’re ready to make an offer.
It’s an exciting time, to be sure, but also one where emotions can easily come into play, particularly if you’ve found a home you love and really want.
I will help you keep your emotions in check, balancing against the realities of the market. Think of it as a game of poker — you don’t want to be so excited that you tip your hand to the seller. Nor do you want to be too conservative and bid so low that you lose out.
If you’ve taken the important step of getting pre-approved for a mortgage, you know exactly how much you can afford, and are less likely to get caught up in a bidding war that will carry you above your price point.
Keeping your emotions in check
If you’ve done your research, received mortgage pre-approval, and looked at a good selection of houses with me, you’re going to feel well prepared and in control. Sure, you may really love this one house and desperately want it, but you should also remember that there are likely others just like it, or better, out there. And if that voice of reason doesn’t pop into your head at negotiation time, I will help caution you against letting your emotions get carried away.
Of course, the interest and potential competition for a property depends on market conditions. If it’s a buyer’s market, you hold the cards and you’ll be confident in knowing there are other options out there. If, however, it’s a seller’s market, acting fast to make an offer that you can afford and is acceptable to the seller is a combination of instinct, preparation, and the experience of your RE/MAX agent.
Avoiding bidding wars
Several factors are at play come offer time: price, which speaks for itself; inclusions, which cover exactly what is included in the deal, such as appliances; and other conditions such as closing date. You want the best combination of those items that suit you, as does the seller.
Then there are human relations. If you make an offer the seller deems insultingly low, for example, there may be nothing you can do to bring them to the negotiating table. After all, this is their home you’re buying, and quite often sellers still have emotional attachments to their home, even though they’ve decided to sell. It’s my job — as well as the seller’s agent — to navigate these often complex issues for both parties.
One of the most important tools you have when it comes time to make an offer is the comparables I generate from the Multiple Listings Service, or MLS. These are excellent snapshot reports into the recent sales activity of similar — comparable — properties in the same neighbourhood. You can see important information such as original and adjusted asking prices, number of days properties were on the market, listing agent history, and actual selling prices.
Once you have this information, weighed against the details of the home you’re making an offer for, you will feel tremendously empowered to make an informed decision, and less likely to enter into a bidding war.