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 house. Naturally this summary 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 cash than necessary.
Get prequalified
If you don’t get prequalified, you will be in much worse position as compared to someone who has proper financing in place. Don’t let the seller in doubts about your financing. Without this, all the following tips are useless.
Find out the seller’s preferences
Try to find out about the seller’s expectations, 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 requirements before you present your offer. If the conditions are not acceptable for you, it is advised to try another offer instead. If the demands are such that you can meet them, work with your agent on a brief summary that will go together with your bid. That will give you a chance to let the seller get to know you a bit and will highlight the positive aspects of your offer.
Don’t underestimate the price
If you were the seller, 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 cautious 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. Imagine that you guess that the top offer would be around $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
The usual, best looking amount of the down payment is between 10% and 20%. Of course in most cases you can try to renegotiate the final amount of your down payment with the seller after the contract has been secured and usually with a success outcome. What really matters is the money at hand when you close so that your contract makes a good impression.
Earnest money deposit
This is a really useful tip, however strong it may look. 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. You have to pay this money anyway, as the good faith deposit is included in the down payment, but it sends a strong signal to the owner. It tells the seller 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.
Offer free post-occupancy
It may be a good idea to offer a free stay to the seller in their house for another one or two weeks after selling it. You can mention this in your letter going along with your proposal. Typically you would negotiate rent, but giving the option of free occupancy for a short period of time might be the detail that decide whether the seller will go for your offer or not.
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