Making an Offer

Now that you’ve found the condo you want, you’re ready to make an offer on it. Keep in mind you want to get the best possible terms and you want to be able to back out if you can’t get financed.

How much to offer
Consider these three factors when deciding how much to offer the seller:

1. the asking price
2. what you can afford
3. the prices for comparable condos in the area

The asking price is really only a rough estimate of what the seller wants to receive.

How much you can afford to pay for the condo depends on how much your lender is willing to loan you. They take several things into consideration to determine how much you can borrow including your credit history, your debt-to-income ratio, your credit worthiness, etc.

Before making an offer on a condo, you should find out what comparable condos in the area have sold for recently. I will have the comparable sales data available through my free Comparative Market Analysis (CMA).

Know the market
Is the current real estate market hot or cold? Knowing this will work in your favour because you will know if you need to offer a little more than the asking price (in a hot market) or a little less (in a cold market).

Why are they selling?
Find out why the owners are selling their condo. You may be able to use this information to your advantage. If it’s been on the market for quite a while, they might be more motivated to sell at a reduced price. If they’re relocating, they might be willing to take less to get it sold quickly.

Develop a bidding strategy, if necessary
If you find that other prospective buyers are interested in the same condo, developing a bidding strategy could make you a winner. You could set a limit on how much you’re willing to overbid on a condo. You could also write a letter to the seller to accompany your offer telling them about you and your family and explaining how much you want the condo, and your plans for it. This might provide enough incentive for the owners to accept your offer over the others.

Counter-offers
Often, a seller will respond to an offer with a counter-offer. This counter-offer may include certain changes to the terms. Most counter-offers propose changes in these areas:

• price
• closing date / occupancy date
• chattels (i.e. appliances, light fixtures, window coverings) included / excluded

You can accept, reject or counter the counter-offer and the negotiations will continue until an agreement is reached by both sides. A contract is written when one party accepts all the terms and conditions of an offer or counter-offer in writing.