Here are some tips a and tricks on how to win an offer of your dream house. Being a Toronto realtor for over 25 years, I know how much annoying it can be when you end up bidding against 15 or even more interested buyers. Naturally this summary is not enough for a greenhorn to become a successful buyer, but in any case it can bring you some useful tips and prevent you from spending more cash than necessary.
Important: Get prequalified
If you don't get prequalified, you will be in much worse position as compared to someone who has proper financing in place. Don’t let the seller in doubts about your financing. Without this, all the following tips are useless.
Get to know what or who the seller wants
Try to find out about the seller's requirements, as it would be a waste of time if there were some details that you were not able to meet. So we strongly recommend you to get all the detailed requirements before you present your bid. It is better to give up in case you find out you are not able to meet them. If the requirements are such that you can meet them, work with your agent on a brief summary that will go together with your bid. This will give you an opportunity to present yourself to the owner and enhance the strong points of your bid.
Don't underestimate the price
If you were the owner, of course you would be insulted if someone offered a too low price for your property, and then probably you would choose another applicant. So you want to be careful about this. Once you damage your reputation, it is not improved even after offering a higher offer later. What you want to do is to shoot about $1,800 to $4,800 higher over the highest expected bid. Imagine that you guess that the top bid would be around $470,000. Throw in a bit and propose let's say $473,164 - you don't always have to bid an even numbered price!
The deposit
The usual, best looking amount of the down payment is between 10% and 20%. Later it is often possible to talk about the precise down payment amount with the owner again, after you have closed the deal. What really matters is the money at hand when you close so that your contract makes a good impression.
Good faith deposit
The next method is quite aggressive but has some great results. Pay the earnest money deposit as high as you can afford, as part of the down payment. The earnest money deposit would be lost if you change your mind later and decide not to go through with the deal. Since the good faith deposit money is a part of your down payment anyway, it makes no difference to you, but makes a great impression on the buyer. That way the seller knows you are for real. This means that the earnest money deposit serves as a measure of your real interest in buying the property, regarding the fact that after signing the contract, you can usually change the amount of the down payment.
Offer free post-occupancy
It may be a good idea to offer a free stay to the seller in their house for another one or two weeks after selling it. You can mention this in your letter going along with your proposal. As this is a very solid proposal, it might be the last thing that makes the seller decide for your bid.
