Before making an offer on a house, it helps to know what you can afford, what the home may be worth, and which terms you’re comfortable with. After all, once you find a place you really like, things can move quickly, and that’s not the best time to start figuring out your limits.
In this post, we’ll go over six things to do before making an offer so you’re ready when the right home comes along.
1. Know What You Can Afford
It’s easy to focus on the listing price, but the more useful number is the one you’d actually feel comfortable paying. Your mortgage pre-approval gives you a limit, but you still need to decide what works for your budget once the monthly payment, property taxes, insurance, utilities, and any upcoming repairs are factored in.
Tallying up the financial side of things can be even more helpful if you end up in a competitive situation. If you already know the highest price you’re comfortable with, you’re less likely to keep inching your offer up just because you don’t want to lose the house.
2. Look at Comparable Home Sales
The asking price doesn’t tell you the whole story. So, before making an offer on a house, a better way to get a feel for what a home may be worth is to look at what similar properties nearby have actually sold for.
When comparing homes, look at things like:
- Location
- Square footage
- Lot size
- Number of bedrooms and bathrooms
- Condition and recent renovations
- How recently the home sold
A recently sold home on the same street with a similar size, lot, and condition can give you a much better benchmark for what the home you’re considering may actually be worth than a larger renovated home a few neighbourhoods away.
Your agent can also help explain why two seemingly similar homes sold for different prices, which can give you a much better sense of what a reasonable offer looks like.
3. Review the Property and Listing Details Carefully
It’s worth slowing down and going through the listing details carefully, especially once you’re seriously considering an offer. Things like property taxes, inclusions and exclusions, parking, lot size, heating, water source, and septic information can all affect how you feel about the home and what you’re willing to pay.
The same goes for what you noticed during the showing. Maybe the roof looks older, the windows are nearing replacement, or the kitchen is something you’d want to update sooner rather than later. None of those things automatically make a home a bad buy, but they should be part of the bigger picture when you’re deciding what the property is worth to you.
If anything in the listing is unclear, ask about it before you write the offer rather than assuming you’ll sort it out later.
4. Decide Which Conditions You May Need
Conditions can make an offer safer for you, but they can also make it less appealing to a seller. That’s why it helps to decide ahead of time which ones you actually need and which ones you may be willing to go without.
For example, you might want a financing condition if your approval still depends on the property, or an inspection condition if you want a closer look at the home before committing. Then things like insurance, septic, well, or document review conditions may also come into play depending on the property.
Keep in mind that the goal here isn’t to strip out as many conditions as possible — if you need them, you need them. It’s more about knowing where you’re comfortable taking on risk and where you’re not.
5. Think About Your Preferred Closing Date
Price usually gets most of the attention (and really, for good reason), but the closing date can matter too. You may need extra time to sell your current home, give notice on a rental, arrange financing, or simply plan the move without rushing it.
The seller may also have timing preferences of their own, and they won’t necessarily line up with yours. So, if you have some flexibility, agreeing to a closing date that works well for both sides can make the offer more appealing without changing the price.
6. Talk Through Your Offer Strategy With Your Agent
By the time you’re ready to make an offer, you should already have a good sense of your budget, priorities, and limits. From there, it’s about deciding how you want to approach the offer based on the property and the situation.
And this is where working with an experienced local agent can be especially helpful. They can give you context around the listing and the market so you can make those decisions with a clearer sense of what’s going on and what makes sense for you.
If you’re thinking about buying in Southern Georgian Bay, we’d be happy to help! Contact us at Hawkins Real Estate Group to connect with a member of our team today.
We’ll help you work through the process and put together an offer that makes sense for you.
