You found your dream home and you’re ready to buy. You’ve talked to your financing company and know how much you can afford. Now it’s time to get down to business and make an offer.
As you begin the negotiating process, keep 3 things in mind:
- Don’t be intimidated or stressed out.
- Know your offer limits.
- Don’t let bidding wars take you out of your comfort zone.
What to include in your offer
Because the offer to purchase is a legal document you may want to consider working with a real estate agent or lawyer to ensure that you’ve sufficiently identified and detailed all the terms to include. An agent will also help you personalize your offer. Things to include are:
- Offer amount
- Deposit amount
- Closing date
- Offer expiration date
- Other conditions you want met
Your offer should also list any “contingencies” that must be met before the closing, including details on:
- Home inspection
- Rights to a walk-through of the home
- Home appraisal
Make your offer stand out
Although your offer’s terms may change during the negotiations, you want your first offer to be your best. Here are 6 things you can do to create the strongest offer possible by factoring these into your price:
- Determine the seller’s motivations for moving.
- Look at the property’s time on the market.
- Evaluate other market indicators like housing starts and home sales to determine how competitive the market is.
- Ask your agent for prices of comparable properties in the neighbourhood.
- Identify items that will need to be replaced/upgraded.
- Be flexible with your move-in date.
After the initial offer
Be prepared for potential negotiations with the seller by knowing at the outset how flexible you can be and how high you can go with subsequent offers.
It’s okay to ask your agent or lawyer for guidance at any point but don’t rely on them to come up with your magic offer number. In the end, it’s the buyer’s choice—and responsibility.