Looking for a new place to live can be an exciting adventure. Conducting research, putting together a list of properties that interest you, seeing them in person for the first time, and knowing when it's the one - the process can be thrilling.
However, once you find that dream property, the real work begins. You must make an offer and potentially start the negotiation process. Here you will find helpful tips to make sure your offer stands out to better your chances of landing the home you fell in love with.
What to Expect to Deal with in the Current Market
This current housing market is a balanced market compared to a few months ago when it was one of the biggest selling markets in the past few decades. To understand more about the difference between a buyer's and seller’s market, check out one of our other blogs that takes a deeper dive into that topic. With it currently being a balanced market, you can expect properties to be on the market longer, fewer bidding wars, and plenty of options to buy.
For renters, expectations have taken a turn. Unlike the housing market, the renter’s market is red hot. The average cost of a one- or two-bedroom apartment has increased substantially from where it was just over a year ago. To find out more information check out our previous Market Update blog post. Furthermore, if you are planning on putting in an offer on a rental, prepare yourself for a potential bidding war and even pay more than the initial asking price. The reason for this is that people are choosing to rent instead of buying due to the current economic landscape (interest rates, inflation, etc.) which will drive more interest in leases, which in turn creates a bidding war in the rental markets.
Tips that Will Help Your Offer Stand Out
When putting in an offer for the first time it is always important to keep these things in mind:
- Compile a list of comparable sold properties in the area or for apartments leased in the same building. This way it helps you come to a fair and respectable offer that should make the seller or landlord consider your offer over others.
- Get to know your seller or landlord's needs as best as possible and have your agent get to know them as well. Find out their concerns, and preferences, this makes it easy for you to submit an offer that matches exactly what they are looking for and makes it more difficult to say no.
- A strong approval letter from a reputable lender, or a reference letter from your last landlord if leasing, will assist the seller or landlord in having “peace of mind” that you are financially stable. If you can provide financial proof of your stability or financial documents backing you, it will make the decision that much easier for the seller or landlord to accept the offer. Proof of employment and salary could also go a long way in making your seller or landlord more confident and comfortable with your offer.
But don’t just take our word for it, listen to the advice of one of our experienced real estate professionals on how to make your offer stand out.
“When making an offer, 5% of the purchase price is a typical amount for the deposit. When you’re trying to make your offer stand out, going above this can show the seller that you are serious about closing. You could take this a step further and show the sellers proof that you are pre-approved for a mortgage or that you have funds to close if it’s a cash deal. Sometimes the safest offer is the best offer when a Seller is relying on the sale to close, especially in a more complex market. Of course, an offer price close to or above the seller’s expectations is the best thing you can do to make your offer stand out, but it’s important to work with an agent that can build rapport with the seller’s agent to determine what other factors may be important. For example, the sellers may strongly prefer an offer with a quick or long closing depending on their situation. Lastly, when submitting an offer on a property, I always have my Buyers write a letter to the Sellers in which they talk about themselves, what they love about the home, etc, and include a picture. I find it helps humanize the offer and add emotion to what can otherwise be a very transactional process.” – Shay Asani, Downtown Toronto Branch Office
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