Just found the perfect home for you and your family, but not sure how to find your way through all the arrangements? We will help you with some useful experiences in this article. For a worthwhile home, it is not unusual to have 15 or even more clients in the competition, which can be very frustrating for an inexperienced buyer. I know this very well from my daily work with clients, being a luxury homes dealer in Toronto for more than 25 years. Of course these tips will not guarantee you a success, but they could help you to avoid costly errors.
Important: Get prequalified
Prospective clients who can get prequalified for a bank loan always have a better chance of getting the deal than clients without a proper financial background. Don’t let the seller in doubts about your financing. Without this, all the following tips are useless.
Explore the seller’s wishes
Knowing what or who the seller is looking for is necessary, because you don’t want to waste your time with a seller that has terms which you cannot meet. Thus we always suggest to our clients that they should try to get all the details available about the conditions of the house sale. If you cannot agree with them, walk away. However, if you can satisfy all the demands, contact your realtor and ask for help writing a letter to go with your proposal. This will give you an opportunity to present yourself to the seller and enhance the strong points of your offer.
No low-ball, no even cut off marks
If you were the seller, of course you would be insulted if someone offered a too low price for your home, and then probably you would choose another applicant. So you want to be careful about this. And that’s even if you deliver a comparative offer in a later stage. Thus the best way is to offer approximately $1,800 to $4,800 more than the highest estimated offer. Imagine that you guess that the top offer would be around $470,000. Try adding some money and come to $473,164 - the offered value doesn’t have to be an even number!
The deposit
In any case it makes you look solid if you can pay from at least 10% to 20% of the home value in advance. Later it is often possible to talk about the definitive down payment price with the owner again, after you have closed the deal. What really matters is the money at the table when you close so that your contract makes a good impression.
Earnest money deposit
The next practice is quite aggressive but has some great results. Put as much of your down payment into your good faith deposit as you can (you loose this deposit if you brake the contract). Since the good faith deposit money is a part of your down payment anyway, it makes no difference to you, but makes a great impression on the buyer. If you do this, the owner understands you have a serious interest in buying the house. Since the down payment is easily renegotiable after the deal has been closed, the good faith deposit is what really shows how much you want that property.
Come up with a free lodging offer
It may be a good idea to offer a free stay to the seller in their home for another one or two weeks after selling it. You can mention this in your letter going along with your proposal. Normally you would negotiate rent, but giving the option of free occupancy for a short period of time might be the detail that decide whether the seller will go for your offer or not.