Making an Offer
Let’s imagine that you’ve found the perfect place and you’re ready to put your money down. You’ve already been pre-qualified or have that pre-approval letter in hand. Good start!
But how do you know what price to start your offer with? The art of making an offer is more than just saying “I’ll take it!”. It can be difficult to negotiate with sellers and remain in a reasonable position to finance the purchase. Besides having a professional agent from The Chamberlain Group by your side to help make the offer you want, it helps to ask the right questions. KNow what your seller is obligated to tell you about the place, and then be sure to leave no stone unturned before you name your price. It’s a choreographed dance and you’d hate to be out of step on this one.
Why are you selling?
Remember that Price and Value are vastly different. The seller may have listed their price, but the value is harder to determine. Get to know the reasons that they are selling and that will give you clues to that all-important value of the home. If the home has issues, that can lower your starting offer significantly.
How much did you pay for the home?
Although this answer isn’t always forthcoming, it does help to gain a sense of the seller’s position. But remember that their purchase price was during a different market, at a different time, and the home was in a different state. They might have improved the home since their purchase, or maybe done nothing in the 15 years they owned it.
What do you like/dislike about the property?
Most people are pretty honest about this question. You can learn what makes the home a treasure, or what makes it a nuisance. For example, the loud neighbors next door might sway your price point, while close access to school could affect your purchase price as well. What one person likes might be a “Deal killer”, so listen carefully to this answer. If one person loves the nightlife of the neighbourhood, that might spell disaster for the family who wants to buy the property.
Have you had problems in the past?
If a home has had major work done, the seller can disclose what repairs and maintenance they’ve done. Maybe they’ve recently replaced the hot water heater. Maybe they had to install a sump to deal with flooding in the basement. Maybe the warp in the wall was from a burst pipe last summer? While one repair might have been done, maybe more was needed but not completed yet, effectively lowering your initial offer.
How are the neighbours?
Use this answer to help you decide what the community is like. Maybe they have very friendly neighbours with kids. That could either repel you or attract you further. Maybe the neighbours are silent, and you’d prefer to be open and welcoming. At any rate, this all helps you with your offer.
How are the Amenities/Transport/Schools?
These are the major reasons people move into a neighbourhood. Let their experience help you understand that the road outside your home has busy traffic for school pick ups and drop offs. Or maybe the traffic congestion is mid and easy to navigate. Or it’s complicated to get to supermarkets close by. The home is a part of the community it is built in. Get to know what makes (or breaks) the neighbourhood in their eyes.
The best offers come from the most informed position. Give yourself every chance to learn as much as you can before the final offer is made. You could stand to save thousands by simply asking a few questions. It’s always worth it to have a friendly real estate agent by your side to help you along the way.