Tuesday, March 18, 2014

10 Things You Need To Know When Making An Offer

  As we get closer to spring, many of you may be contemplating a home or other type of property purchase.  Once you have found a home that you’d like to submit an offer on. The next and most important question you ask yourself and your REALTOR® is how much do we offer? 
  The following are 10 things that you need to know in order to help you formulate an offer and a negotiating strategy.  I have separated these 10 things into two distinct categories.

Market Conditions

- What are the list and sale prices of similar properties, preferably sin the same 
   general area?
- What is the current trend in prices, up, down or stable?  What is the ratio     
   between the list and sale prices.
- What is the current supply and demand in the area you are looking? In a high \
   demand low supply market you may be faced with competing offers.       
   Conversely in an area or price range with lots of inventory you are not.
- What is the absorption rate ie: the number of month’ supply of inventory in the 
   area? Less inventory in a given area can make for a more competitive market for 
- What is the “average time on market?” Because listings expire and properties are    often re-listed for sale, the cumulative time that a property has been on the 
   market is important.

Property Facts

- Is the property you are considering well kept, up to date and in good condition   
  of are substantial repairs and upgrades needed?
- What sis the cumulative length of time on market for the property?  Substantial 
  days-on-market can signify slow market conditions, a pricing issue with the 
   property or some other form of problem such as location, deficiencies in the 
   home etc.
- What is the seller’s motivation?  Often it is not possible to find this out and the 
   REALTOR® that has listed the property is obligated to keep his Seller client’s 
   motivation private.  They may however have an offer on something themselves 
   or are otherwise anxious to get the property sold so you can always ask.
- What terms is the Seller looking for?  The cleaner the offer with fewer 
   conditions the better.  Having pre-approval of your financing or being able to 
   make a cash offer with a short closing gives you a lot more leverage to negotiate 
- What is the sales history for the property?  While what someone paid for a 
   property is somewhat irrelevant, it is very easy for a REALTOR®  to check 
   land registry records in order to see what a property last sold for.  Using that 
   information, plus allowing for increases or decreases in market values plus the 
   cost of any improvements that have been made will assist you in determining a 
   fair price for the property today.
By obtaining answers to these 10 questions, you will have some valuable insight into preparing an offer and then further negotiating the process that will allow you to arrive at a purchase price that represents fair market value for both you and the Seller.  Contact me to learn more.    

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Royal LePAGE Locations North (Brokerage)

330 First Street, Collingwood, ON L9Y 1B4


Direct: 705-443-1037

Office: 705-445-5520 ext 230


My Profile

Rick relocated to Collingwood from Toronto in 1985 through a transfer with Goodyear Canada. In 1987 Rick was recruited by a major client of Goodyear’s, managing their Canadian business based in Barrie before moving to Chicago in 1992 as Vice President of Sales & Marketing. Upon returning to Canada in 1996, Rick ran an industrial products manufacturing company in Stratford, Ontario. In 1998 Rick returned to Collingwood with his two children. Rick is a licensed real estate Broker with Royal LePAGE Locations North in Collingwood and holds his MVA designation (Market Value Appraiser-Residential). He is an active volunteer in the community serving several years on the Board of Directors with the Collingwood Chamber of Commerce as Treasurer, 6 years on the Board of Directors for the Southern Georgian Bay Association of REALTORS® of which he is the Past President (2008) and currently serves on a committee with the Ontario Real Estate Association. Rick is a diverse executive manager with extensive experience in strategic planning, manufacturing, finance, human resources and quality assurance management.