Even in slow markets, if you’re looking at a very desirable home, multiple offers are a possibility. Never let the idea of competing against other buyers scare you off from taking a shot at it. Just because there is more than one offer doesn’t mean the house will sell for more, or much more, than ‘market value’. One of the first things a confident buyer will do to improve their offer when competing against other offers is removing conditions. This is a great tactic but one that comes with risks, consider this:
Mortgage Pre Approval
If you intend to forego including a condition allowing you to go to the bank to finalize the details of your mortgage approval, you better be one-hundred percent confident that you will get approved and if there is any chance that you may not, be certain there are other options available to you such as family, private money, co-signers, larger down payments, etc.
Be sure to be working with a reputable mortgage broker, not that sketchy guy your brother referred you to that can get your mortgage approved and replace your car’s transmission at the same time. Have the broker (or bank representative) complete a legit approval, reviewing all of your personal documents such as your proof of income, pull a credit cheque, etc. and get a pre-approval letter; this can help when convincing a seller to seriously consider your offer. Verbal approvals where the mortgage agent/broker takes your word for it that you make $100,000 annually without asking for proof are ALWAYS going to run into complications.
To inspect, or not to inspect… Most first-time buyers prefer to complete a home inspection due to a lack of experience and the need to feel comfortable moving forward, which is completely understandable. However, if you find yourself losing in competition consistently, consider the idea completing an inspection before the offer, shortening the inspection to one day and scheduling it in advance or calculating the risk of removing it altogether.
Different styles of properties will have varying degrees of risks. A two-storey home with a basement will have a foundation with potential cracks and water leaks to look for as compared to a three-storey townhouse that’s built on a concrete slab. A home that’s less than one-year-old should come with a fairly comprehensive Tarion warranty that offers peace of mind. Some homes built between 1995 and 2007 could have Kitec plumbing, etc. Understanding your risks and potential costs of repairs will help you in deciding what to do.
There are lots of other conditions one may want to consider including in an offer –or not including if you want to be more competitive. Things like time to verify reasonable insurance rates, pool holdbacks, warranty on included chattels and buyer revisits are just a few. For more information or to chat with our team about buying a house, whether in a couple of months or a couple of years, email us today at [email protected]
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Ariel Kormendy and Adrian Trott began their business as real estate agents in Milton, Ontario. They have since grown the team, employing multiple licensed Realtors, full-time support staff and an in-house media department. The award-winning and top producing team expanded their services to the GTA and surrounding areas and have gained a tremendous reputation as being knowledgable and game-changing in the industry. To learn more about the team, follow, like, listen and watch us on Social.