Make Sure You’re Prepared To Make An Offer

I was writing a very detailed email to one of my clients because she is the type to want to know everything and have it explained in uncertain details.

While rereading it, I thought that this would be good to have for all of my clients. Then I thought, heck, make it available for everyone!

So after patting myself on the back for a job well done, here is my advice to make sure you’re prepared to make an offer on a property that you’re really excited to buy.

Since it’s been a few weeks that we’ve been out looking at condos and getting more familiar with areas, it’s only a matter of time before a condo comes up that you’re going to love.

Let this be a guide for you to get everything in order to put in an offer on a property now, rather than have you scrambling last minute which could delay being able to offer and missing out on a great place.

Have your deposit money ready in your account

The definition of a deal is giving something in order to get something. You won’t get the condo as soon as your offer is accepted, so your deposit money is essentially a promissory note.

You’re telling the seller, “I promise to buy your condo on the date we agreed upon, and to show you that I will buy it that day, keep this deposit money in trust until then so you know I won’t back out of the deal.”

Having your money ready is good in 2 situations. Once an offer is accepted, the deposit will be due within 24 hours. If your money is tied up in investments or something else and you don’t give the deposit within 24 hours, the deal is dead (void).

The other situation where having your deposit money ready is if you find yourself in a multiple offer situation. If you have your deposit cheque ready to go on the night of the offer, it shows the seller that you’re serious and ready to put together the deal that night.

I’ve seen buyers get cold feet and not go through with a deal after they slept on it and decide they want out of the agreement. That can get messy legally with a breach of contract, and by having your deposit the sellers have that peace of mind.

Oh, before I forget, your deposit cheque should be either a bank draft or a money order and must be made payable to the seller’s brokerage, ie: Re/Max Big Balloon Realty Inc.

Closing Date

I mentioned the closing date above because it can make or break a deal especially if you’re in a multiple-offer situation.

I’ll be responsible to find out what the seller prefers in terms of a closing date. In multiple offers, if you can give the seller what they want, it makes your offer that much better.

When not in multiple offers, there can be some flexibility in the closing time. Being open and working towards a mutually agreeable closing date shows that you’re negotiating in good faith.

Obviously, if there is a closing date that you or the seller can’t work with, then you simply pull the offer off the table and move on to the next condo.

Lawyer Up

All offers have to be reviewed and finalized by a lawyer in order to transfer the ownership to the new owner, you.

To that end, have a lawyer in mind before you even get to the point of an offer, especially when it’s a condo because the condominium documents, better known as a status certificate, need to be looked at by your lawyer to make sure the building is in good financial standing.

Issues like special assessments, lawsuits against the building, and steep increases in maintenance fees can all be found in the documentation by your lawyer and that can save you from a financial pitfall.

Oftentimes, the status certificate will be made available to you in anticipation of multiple offers on a set offer day.

If your lawyer can review the status certificate before the offer date and give you their approval, it puts you in an advantageous position because you won’t have a condition in your offer for a lawyer to review the documents.

I have a lawyer that will review condo documents free of charge but you will have to sign an agreement that you will work with him to put the deal together.

Since you have a mortgage preapproval, you’re ahead there as well.

Again, if you’re in multiple offers, you can remove the condition of financing to improve your odds of winning.

An offer without a condition on financing, even if lower than one with a financing condition is, or should be looked at as stronger since there isn’t the chance that a mortgage won’t get approved.

There you have it, everything I’ve learned over the years that put you in a great position to successfully offer and win on a property.