It’s an anxious time. You’ve been going to showings and visiting open houses and finally found a place that you want to make an offer on.
With the way the market is, you need to be ready to act quickly otherwise you run the risk of being left behind. What it doesn’t mean is that you need to rush or feel pressured into making a decision you’re not 100% comfortable with. This purchase is different (and more expensive) than anything you’ve likely made.
Above everything, have fun! This is an exciting time so don’t get too caught up.
But before we get to the offer…
What mortgage amount have you been pre-approved for? This will dictate how much you can spend. Keep in mind, just because you’re pre-approved for a certain amount, it doesn’t mean you can or want to spend to the max. What you don’t want is to be a situation where you’re putting every paycheck towards the mortgage. Consider: what if something needs repairs, you lose your job, your car breaks down. Do you have a reserve in place to help you cover?
Don’t forget about closing fees, land transfer tax and lawyer fees – all things that need to be paid before closing.
Now onto the main event. What’s your offer? Your agent should know the area, have a good sense of comparables that have sold and what the market value of the property is so lean on them for guidance.
The thing an agent can’t tell you is how badly you want it. Paying more than what it’s “worth”, which to be honest is becoming subjective anyways isn’t necessarily a bad thing if you love it! And, gone are the days of properties going under-asking – how often do we hear that?
You’ve landed on a price and any conditions, which have mostly vanished in this market. Paperwork is submitted. Now you wait to hear back (tick, tock).
One of four things will happen after an offer is made:
- The seller rejects your offer and accepts another one (don’t be discouraged it’s all part of buying!)
- The seller counters your offer (The majority of the time, offers are submitted to sellers in the evening. So, depending on if there are multiple offers/bidding wars be prepared for a late night – coffee anyone?)
- The seller rejects all offers (In this case, they didn’t get what they were looking for. They will ask all interested bidders to go back and improve their offers)
- The seller accepts your offer as is (You’re in the home stretch. Contracts get signed, you get your deposit and financing in order and settle on the date you officially own the property)
Are you excited or intimated by the buying process?