You’ve found the one. The house you can’t wait to move into. You are excited and ready to submit an offer. You can already picture the family dinners, barbecues, and Christmas decorations. But how do you get started?
One of the most strategic and important parts of buying a home is making the offer. For most homebuyers, it’s also the most stressful part of the process, but for savvy Hamilton real estate agents, it’s the time where we shine the most.
In today’s competitive seller’s market, it’s more important than ever to put forward a great offer. But the real finesse comes from submitting an offer that will appeal to sellers while also protecting your best interests and not overpaying at the same time.
Here’s a quick guide to everything you need to know about making an offer on a house:
Items to Consider When Making an Offer on a Home
Before making your offer, you need to understand the components of the offer. It’s not just about the purchase price. There’s a lot more you need to consider and include in your offer for it to be valid. Most house offers include the following information:
Purchase Price: This is the price you are offering to pay for the property.
Deposit: The deposit is different from the down payment. A deposit is typically a lump sum payment made to the seller as a sign of good faith and proof of your interest in the property. Once the offer is accepted, your deposit can be transferred to your down payment.
Date of Occupancy: This is the date you will take possession of the property. Sometimes also referred to as the closing date.
Inclusions/Exclusions: Items such as appliances, window coverings, furniture, etc. These are things the seller will include or exclude from the deal.
Conditions: Your offer could be made conditional or contingent upon specific items for example, if you do not yet have financing secured, it could be conditional upon your mortgage approval, or conditional upon the sale of your current home. You can also make the offer conditional upon a home inspection. Essentially, any conditions must be satisfied before the deal is official.
Ready to buy a house but not sure where to start? Learn more about buying a house with Michael St. Jean Realty here.
How to Submit a Compelling Proposal When Making an Offer on a House
Making an offer in a buyer’s vs. seller’s market can be very different. In today’s competitive real estate market, many houses are subject to multiple offers. Because of this, when making an offer on a house in Ontario, it’s important to stand out and appeal to the seller right away.
Working with an experienced real estate agent is the best way to craft a compelling offer that will win you the bid without compromising your investment or putting you in a bad place. Although it’s important to create an offer that will appeal to sellers, it shouldn’t be done at your expense.
Your real estate agent should know what the seller’s goals and motivations are, helping you to create an offer that will appeal directly to their unique needs. Some examples of ways to appeal to sellers with your offer include:
- Offer over asking—but be careful to not pay too much
- Offer a higher deposit amount
- Limit the number of conditions on the sale
- Choose an acceptable closing date that aligns with the seller’s needs
As with anything, your trusted real estate advisor can provide the best insight when it comes to crafting a strategic and compelling home offer.
Do you need to sell your current house before buying a new one? Learn more about the selling process with Michael St. Jean Realty here.
How Can the Seller Respond to Your Offer
Once your real estate agent has submitted your offer to the seller’s agent, they will take some time to review your offer in detail. The seller has three options when it comes to responding to your offer:
- Accept the Offer: If your offer was great right from the start or if the seller is motivated for a quick and easy sale, they might accept the offer right away.
- Enter Negotiations: If your offer is on the right track, but the seller has a few changes they’d like to make, they will enter negotiations with a counter-offer. At this point, your agent will advise you on the best course of action.
- Reject the Offer: The seller also has every right to reject your offer outright, in which case, it’s back to the drawing board.
What Can be Negotiated When Making an Offer on a House
Depending on your motivations and the seller’s motivations, almost everything can be negotiable. From the price to the inclusions/exclusions or even the closing date. Every real estate transaction is different and when making an offer on a home, it’s important to consider your unique needs and situation. However, the seller is also looking out for themselves. In some cases, compromises must be made. This is why working with an experienced Hamilton Realtor® is so important. They advocate for you during negotiations, working to get the best deal for you.
The First-Time Home Buyer Incentive is designed to make buying a home easier for Canadians who are entering the real estate market for the first time. Learn more about it in our blog post here.
Tips for Making an Offer on a New Construction Home
Buying a new construction home has its definite pros and cons, and if it’s is the route you wish to take, there are a few things you should consider when making an offer on a new construction.
First and foremost, many people think that buying a pre-construction home is as simple as going into a showroom and purchasing a property. However, it’s still a good idea to work with a trusted real estate agent. The reason? Showrooms are staffed by builders, who aim to sell properties for this specific purpose. A real estate agent, on the other hand, is looking out for your best interests and can guide you through the process from start to finish.
A few things to consider when making an offer on a new construction home:
- The purchase price of pre-construction homes typically have HST added on top, unless the builder has built that into the price. It’s important to know if that is the case.
- There are fewer things to negotiate in a new construction contract, however, since you can’t really negotiate price, it’s often better to negotiate for upgrades. Your agent can advise you on the best course of action.
- Conditions are also acceptable in a new construction offer, and in many cases, it’s a good idea to ask for a final building inspection just to protect your investment.
- Other considerations to include in your offer are warranties and guarantees.
Making a home offer is the most strategic part of your home buying experience. It’s always a good idea to trust a seasoned real estate pro. If you have a question about buying or selling your home, call us at 1-844-484-SOLD or email us here.