Is there more to an offer than price?
Well, you bet there is. Price may be the first thing a seller will look at in an offer, but it won't be the last. Some other things to consider:
CLOSING DATE. When will you take ownership of the house? If you're looking to move in July and the sellers already have a purchase closing on their next house in August, this could be a problem. MLS® listings include possession information that can give some guidance on setting a closing date. Everything is negotiable and you can certainly inquire or try something other than what is in the listing, but this should be done with caution.
Or on the other hand, they may desire a faster closing. This can happen with estate sales, foreclosures or for a variety of other reasons. In theses cases, a faster sale may make a reduction in price acceptable, giving the sellers a quicker payout in exchange for not getting full price. This is assuming you're not in competing offers, which changes the dynamic. Experienced agents will know how specific situations can factor into negotiation.
DEPOSIT. I have mixed feelings about the deposit. It doesn't affect how much money the seller gets in the end because it applies to the purchase price. The deposit is only a gesture of good faith - how serious are you about the offer? Are you willing to tie money up in order to secure the agreement?
Generally speaking, it's not a big deal either way. If you have appropriate conditions and the deal breaks up for legitimate reasons, the seller has no reason to refuse the return of the deposit. [You should get the deposit back]. And if the deal goes through, it is applied to the purchase price and it's that much less you need to give your lawyer for the down payment at closing.
But while it doesn't really affect the purchase, if they have a specified minimum in the listing, it is worth considering in order to make the offer closer to what they are looking for. Sellers and listing agents will vary in how much weight they put on deposit size.
CONDITIONS. This can be a big thing, of course. An offer with no conditions is more of a sure thing to a seller than an offer with them. You need to balance protecting yourself as a buyer with making an acceptable offer. There are some standard conditions you expect to see in any offer, but if you start to have some unusual conditions AND don't offer a price that appeals to the seller, this could easily make the offer unpalatable and you'd be especially unlikely to win in a competing offers situation. An experienced professional buyers' agent can give you guidance on this.
INCLUSIONS. What is included in the purchase as per the listing? Appliances? Window coverings? Even if something isn't included, you can still ask for it when you draft the offer. It is quite common for a buyer to ask for appliances even if they are not listed. On the amusing extreme, [you could even ask for their cat if you want!] The seller may not agree and scratch it out. On the other hand, if your offer price is "reasonable", then they might give you what you want.
In the end, a lot of the other details will be weighed by the seller against the price you have offered. It is generally a good idea to give sellers as much of what they are looking for, especially if you're going to be in competition or making a lower offer. Talk it over with your real estate agent - they've been through it and can offer valuable advice.
If you have any questions about the home-buying process or would like to get started with good professional advice, please call me at 905-512-4069 or email jeff@jeffsellshomes.ca
*** Not intended to solicit clients currently under contract ***
