How to Win on a Home Offer

For a brief time in mid to late 2022, the Toronto real estate market went through a slow period. It was an exciting time for buyers. Housing prices moderated for the first time in years, and competition dropped off. However, the demand never truly disappeared. Instead, people moved to the sidelines to see if prices would continue to fall. When the Bank of Canada announced that interest rates would hold steady for the time being, stability returned to the market, and so did the buyers.

As a result, many listings are once again going into multiple offers, and houses are selling quickly. What can you do to make your offer stand out to a seller without overpaying for the home of your choice?

Understand the Local Market

If you’ve done your research, you’ve likely stumbled across the terms buyer’s market, seller’s market, and balanced markets. 

• A buyer’s market is in your favour. You have plenty of listings to choose from and very little competition.
• A seller’s market can be trickier to navigate. There are too many buyers, and most listings get snapped up fast. You’ll need to be prepared to act quickly when the right opportunity arises.
• A balanced market means there is about the same number of buyers and sellers, and neither has an advantage over the other.

Of course, the above terms are generalizations. Even if the nation is in a seller’s market as a whole, each neighbourhood tells a different story. One area may be in high demand, where each listing attracts multiple offers and bidding wars. Another may be an up-and-coming neighbourhood where you can still find a house your family will love at a reasonable price. 

An informed buyer is a successful one! Why not Download My Buyer’s Guide today?

Know Your Seller’s Motivation

Homeowners decide to sell for various reasons. While most are primarily motivated by money, some people have different priorities. Understanding your seller’s motivation can be the key to creating an offer that appeals to them. For example, a homeowner may be relocating for a new career and needs to sell quickly. Earning top dollar could be less critical than a fast or flexible closing date.

Perhaps the house needs a lot of work, and the homeowner is simply not up for the task. If you are handy or know someone who is, this could be your chance to snap up an undervalued gem. 

How Offers Work

The elements of an offer are price, deposit, conditions, inclusions/exclusions, and closing date. Each of these can be written in a way that makes the deal more appealing to a seller, especially when you understand the homeowner’s motivation. Let’s examine each element and how you can make your offer more compelling.

• Price: The highest price always wins. Or does it? While every homeowner wants to earn as much as possible from their sale, other considerations may be even more important to them.
• Deposit: A higher deposit can make your offer more appealing, especially if another buyer has a similar offer. 
• Conditions: The fewer conditions your offer has, the more attractive it will be. However, you’ll want to take precautions to protect yourself from buying a house with issues you didn’t anticipate.
• Inclusions/Exclusions: Do you want the current homeowner to leave the curtains, BBQ, or other items that aren’t officially part of the house? These are referred to as chattels, and everything must be negotiated. Making as few demands as possible as a buyer can give you a competitive advantage.
• Closing date: This refers to when the transfer of ownership occurs, and you take possession of your new home. Standard closings take place 30 to 45 days after a seller accepts your offer. However, some homeowners want a shorter or longer closing period. Being flexible can sometimes be the key to winning the home of your choice.

Should You Write a Letter?

One tactic hopeful buyers have been using lately is to write a heartfelt letter to local homeowners asking them to sell. Can this work? No one is going to decide to sell their home just because you ask them to. Still, if your letter reaches the right person at the right time, it might help. A personal note humanizes you in the eyes of a homeowner, who may give you first dibs should they decide to sell.

However, writing letters is a numbers game. You might have to send out thousands to reach someone who might heed your request. Or you might not get any results at all. The slight chance of success may not make this technique worth your time or money. A better strategy is to work with a local real estate agent to represent you as a buyer.

Looking for even more buyer resources? The posts below will help set you up for a seamless transaction:

• A Guide To Buying Your First Home
• Your Guide to Status Certificates
• 5 Reasons to Work With a REALTOR® With Negotiation Expertise

Negotiation Expertise Is Invaluable

Negotiation skills are always a component of buying a house. No matter what, you want the best price and terms the market will allow. When conditions become competitive, having an expert in your corner is even more critical. Of course, you can work directly with the seller’s real estate agent. But you should know they are legally obligated to represent the seller’s best interest, not yours.

Having a real estate agent to work on your behalf means an expert is there every step of the way to negotiate the transaction in your favour as much as possible. Industry connections can also be critical to a successful purchase. Some listings never hit the MLS®, instead going out to a network of real estate agents to find a buyer. Working with a local expert can give you access to homes you may never find on your own.

Are you ready to start house hunting in the GTA? I’m a local real estate professional and would love to help you make your journey a success! Call or text today at 289-536-4143 or email jwatsonhomes@jacquelinewatson.ca for more information.