Good morning everyone;
The holiday season is descending upon us and retailers are in full swing. Although I expect transaction volumes to come down over the next few months, pricing will continue to be strong as supply will shrink even more.
It’s not a bad time to sell your home, but many people do not want to go through the process during the holidays. Financially speaking, sellers will still fair quite well.
Forecasters are not expecting interest rates to increase until the end of 2015. Despite rising home prices, affordability is still considered to be strong.
Multiple Offers – Buyers Be Prepared!
Week in and week out you hear me describe multiple offer situations on desired properties. It has become a fact of life in the Toronto Real Estate Market. What does it mean for a buyer to be ready for a multiple offer?
- Carry out a home inspection before the offer presentation. Bidding on a home without a home inspection condition improves a buyers chances immensely.
- Many sellers’ carryout pre-listing inspections for prospective buyers in order to help facilitate more offers. A buyer can still carry out their own inspection if desired.
- Buyers should have a very good sense as to what they can prequalify for. Know beforehand what your upper limits are. Offer bids can go dramatically upward very quickly.
- Virtually every week I provide examples of homes that sell for much more than the comparable sales justify.
The Risk to consider
- In this type of selling market banks will often ask for an independent appraisal to be done. If an appraisal report puts the home at a lower value than the purchase price, the buyer must cover the difference between the two as the lender will only provide a mortgage upon an appraised value.
Know your Finances
- Although you may qualify for a mortgage you should factor in home ownership costs (insurance, maintenance) and your life style expenses and come to terms on any changes you are willing to make in order to purchase the a home.
Certified Deposit Cheques or Bank Drafts with Offers
- In a multiple offer situation, if an offer that is presented to a seller without a deposit cheque or with a personal cheque, the offer is not as strongly considered. The deposit is to be delivered within 24 hours “Upon Acceptance” of the Agreement of Purchase and Sale.
- Contrary, an offer that is accompanied with bank draft or certified cheque, “Herewith” the offer, is a much stronger offer as the seller does not have to wait the 24 hours to see if the deposit actually comes. It has happened that buyers have experienced an extreme case of buyers’ remorse and simply do not deliver the deposit the following day.
Real Life Examples
1. This past summer I represented a buyer on a home purchase that had 6 competing offers . We had a personal cheque for the deposit (to be certified and delivered the next day).
- We were successful in the end but the selling agent and seller were hesitant to accept our offer based on the deposit not being certified. They almost accepted another offer because of this. The next day my client dropped of a certified cheque and all was well.
2. This past week I was involved in another multiple offer situation with 8 competing offers! My clients had been through this scenario about 6 times already.
- We had a bank draft in hand with our offer for about 5% of the purchase price (this is the norm).
- At the end of the evening my clients were successful in acquiring the home despite NOT having had the highest bid.
- One other offer was $10,000 higher but had a lower deposit amount and it was in the form of personal cheque (to be certified the next day)
- Once the paperwork was signed and accepted the listing realtor shared the details and showed me the notes to support this.
- I was even present to hear him call the realtor who presented the higher offer to say that they accepted our offer despite it being 10k lower.
- The sellers’ having been much older (lived in the home for 40 years) did not want any stress and were glad just to get it done.
- They accepted our offer based despite it not being the top offer. Here is why?
1. The deposit was a backdraft (like cash in hand)
2. The deposit amount was a little higher than the top competing an offer
3. The sellers really took a liking to my clients and new that they would make it their fantastic family home.
My clients were extremely happy that they were successful and despite all the previous attempts on other homes I can honestly say that they bought the best house of the bunch!
Although price is usually carries the most weight in an offer it is not always the deciding factor.
*****Book Launch Details*****
As mentioned last week, my sister Marisa Gallippi, has published a children’s book titled “The Flower Kisser”
The book launch party will be on December 6th / 2014 at 6:30pm
You should visit Smoke and Bourbon as it is a fantastic bbq smoke house restaurant. They also now feature smoked wings (all you can eat Mondays)
Just let the owner, Tony Gallippi (my first cousin with a great name) that Tony Gallippi sent you J You will be spoiled with great hospitality and even better eats.
Lastly, Royal Kids’ Closet – Royal York Plaza (Royal York and Lawerence) is in full swing so if you are holiday shopping for designer kids’ clothing it is worth your while to visit.
Have a great weekend and wonderful week, Anthony