Before buying a house or a condo in London Ontario, the one single element that will determine how well you & your real estate representative negotiate your offer is…
How MOTIVATED Is the Seller And How MOTIVATED Are YOU?
If the house has been on the market for over a month, perhaps it’s because the seller hasn’t been motivated enough to sell. Or perhaps by now, the house hasn’t sold and he/she is very motivated. Or, they are fishing for a price, or; (in most cases) by the time they pay off their mortgage and other debts, there is no money left at a reduced price!
And if you’ve been transferred, have your home listed and you wish to downsize, or another child on the way and your house is too small, or your neighbourhood is a proctological pain, or you’ve had it with your landlord, you may be very motivated to buy!
Nevertheless, here’s a tip you must bring to any real estate transaction…
Avoid Emotional Attachment to the Home You’re Considering
If your heart is racing about the home, if you can’t hold back your emotions when thinking about the home, then you’re not going to do well when negotiating the purchase price. And, in some cases, money may not be the issue; it could be the layout, neighbourhood or perceived lifestyle.
What’s the single best piece of information you can have?
Other than my phone number, it’s the comparable sales and market data for the entire market and the area, plus the assessed values for 5 houses on each side of the house and 10 across the street from the house you are interested in. Ask your Realtor to print out these for you to view. Now, here’s why…
5 Musts Before Making an Offer on a House in London Ontario
1. Take a look at the currently active (for sale) listings in the area. Was the house you’re considering priced within reason to other homes? If so, you know you’re at a reasonable starting point.
2. Now, take a look at what the average selling price is compared to the listing price. You may notice that most houses in London are selling for asking price or about 1-10% more than their offer price. If that’s the case, you know the original offers were LESS than this amount. Take this into consideration when making your offer.
3. Now, make sure you visit several of the other listings in the area. How does your choice compare to the others on the market? Is the home you’re considering in similar shape? Is it better sited? Is it bigger, smaller, better style, better landscaping, etc.? These factors will help you determine how much you should pay for your home vs. how much others paid for similar homes in the neighbourhood.
4. Now, take a look at the average market times for listings in the area. If they’re long (evaluated on a market by market basis), the market may be soft, and you might have more negotiating room with your offer.
5. What is the percentage difference from assessed values to market price? (I have a great formula for this and have found over the years to be right on the money!)
You’re now ready to make your offer. This is where strategies come into play and is one of the most important steps in the buying process and this is where most either overpay or not get the home they want because of poor negotiating ( see my 10 real estate negotiating musts) and upset everyone or lose lots of sleep!