After searching long and hard for Windsor Ontario real estate, you have finally found a place to call home! First of all, congratulations! Being a homeowner has numerous advantages, not to mention the many wonderful memories you will make in the coming years.
But now that you are ready to make an offer, it’s important to educate yourself so you don’t overpay, or make an offer that is so low, the seller is insulted and will refuse to even consider your price. If you have followed this website, you will know that I strongly encourage all buyers to secure a “pre-approval” letter, so that when it’s time to negotiate, you won’t go over your maximum.
Here are some step by step suggestions when it’s time to negotiate and make that initial offer. But first, let me add that always hire an experienced, well-respected real estate agent who can assist you in getting the best deal on your new home.
As tempting as it is, a buyer should never just pull a figure out of a hat and offer it to the seller. It is necessary to do some research before bidding on a home. What does this entail? Find out why the homeowner is selling his or her home. Are they downsizing? Are there financial issues? Is there a job transfer or looking for a larger home? If you find out if the homeowner needs to sell immediately, this can have an impact on your offer.
2. Buyer or Seller’s market?
Depending on what type of real estate market is in place at the time of your offer can drastically affect your bid. In a buyer’s market for example, you will have less competition as there are more homes available than buyers. Here, sellers are more willing to negotiate and accept a lower price on their home due to the heavy competition. In a seller’s market, it’s the opposite. There are more buyers than homes so sellers will usually not consider any offers lower than their list price which leaves very little room for negotiation. In fact, this is where bidding wars are common place.
3. What price did the seller pay?
If the homeowner purchased the home in the past few years, chances are, there has been little appreciation. If this is the case, then the offer should not be far off from what the seller bought the home for. Again, each case is different, but it’s always a must to know what the seller bought the property for and when.
4. Neighbourhood comps:
Look over similar homes in the area to see what they were listed at and what they ultimately sold for. Are homes selling over or under the listed price? What’s the percentage? This is a good tool to use when making an offer on a home. You want to know what the home SOLD for and how far off it was from the listing price.
5. Home’s sale history:
Before making an offer, you will want to know how many “days on the market” (DOM) or how long the home has been for sale. Make sure that you check to see if the property had an expired listing, which means the home was listed prior, but it never sold and is back on the market. If a property has been listed, delisted and listed again, there is an excellent chance you have motivated sellers.
Once you have the above information, you may be ready to make an offer that not only you feel comfortable with, but that you can afford. As always, it is important for buyers to remember that a real estate agent should guide and provide you with current and accurate information, but that the final price can only be determined by YOU. Remember, a real estate agent should never pressure his or her clients. After all, we are not the ones making the mortgage payments, you are!