So, you’ve finally found your absolute dream house. The size is perfect, the neighborhood is lovely and it’s not too far from work. There’s just one problem; it’s somebody else’s dream home as well!
The last thing anyone wants to do is get into a bidding war. Residential properties, particularly starter homes, frequently sell for considerably more than the asking price as bidding wars become more frequent, leading to additional stress for homebuyers.
Not to worry; there are a few things you can do to make your offer more appealing and improve the likelihood that the seller will accept it.
Be Aware of Your Financials
In other words, you need to fully understand what you can and cannot afford.
Take a close look at your finances before you begin house hunting. Create a monthly budget that you can manage effectively, taking into account the additional costs related to home ownership (property taxes, utilities, mortgage payments and ongoing maintenance of the property). Doing this can help manage your mortgage and other home bills without feeling overwhelmed.
Get Pre-Approved for a Mortgage
Before you begin looking for a property, get preapproved for a mortgage. If you’ve heard of the prequalification procedure, take notice that it involves verbal confirmation of your income and other information, which results in an estimation of the loan amount.
A preapproval letter demonstrates to the seller your commitment to purchasing their property. It also indicates to the seller your confidence in your ability to obtain financing for the purchase. Without a preapproval letter there is always the possibility that a seller will completely reject your offer.
Have a Down Payment
By having the down payment deposit prepared, you can convince the seller that you really mean business and that you have the financial means.
Having your down payment prepared can improve your chances of walking away from the deal as a homeowner seeing as sellers want assurances that you want to purchase their property. Cash in your pocket will make you stand out from another competitor offer and help you be recognized.
If you do not wish to obtain a mortgage, it is to your advantage as the buyer, to have the entire purchase amount available. Remember that if you do make an offer, there will likely be a bidding war so be sure your budget can accommodate some fluctuation.
Do a Home Inspection Before Making an Offer?
A home inspection is usually the last thing you consider when seeing your dream home. However, having an inspection before placing a deposit or even an offer can make you reconsider the amount you are willing to spend or how badly you want to the property. When buying a home, an inspection offers the buyer the advantage, giving them an estimated budget for any potential renovations.
Inspections are important even if you are not in a bidding war. During an inspection, you may be surprised at what you might learn. Inspectors will reveal more about a seller’s home than you can find yourself.
The majority of offer letters contain a contingency that allows you to back out of the deal if a home inspection reveals significant issues with the property. In some cases, sellers may look more favorably on your offer if you choose to skip the inspection contingency. BEWARE! You will be taking a huge risk that could ultimately be detrimental to your budget with the cost of future maintenance and repairs.
Also, if you are unsure that the house has been properly maintained, as you may be buying from a family member or close friend, you risk buying a home whose attractive exterior disguises costly renovations.
Try to Be Flexible
It is advised to give the seller your desired possession date and make note in your offer that the possession date is negotiable. This shows that you, as the buyer, are flexible and easy to work with This simple note also confirms your availability and affirms your resolve to purchase the property.
Even if you offer is not the highest, the probability of being accepted is greater the more your offer meets the seller’s requirements.
Using all these great suggestions ensures you have a solid understanding of what you are getting involved in when considering entering the housing market, regardless of whether you’ve just begun your journey into the Montreal real estate market or you’re in the process of making offers and trying to win a bidding war. You can find the home you’ve been looking for and that fits your budget by working with market experts.