The Highest Offer When Buying Property May Not Always Win
Home sellers obviously hope to get the highest possible price for their properties, but oddly enough, it’s not always the highest offer that gets the house in a multiple-offer situation.
There are in fact several reasons that sellers may choose to accept a lower offer, and serious buyers need to be aware of these, starting with a home loan pre-approval letter that can be obtained through a reputable mortgage originator such as BetterLife Home Loans.
This tells the seller that you have done all your financial homework, are ready to buy in a certain price range and should have no trouble getting a home loan in a few days. And it can be a real clincher for someone who needs to conclude a sale quickly, even if you have offered a lower price.
In fact, many sellers actually now prefer offers from prospective buyers with pre-approvals over “all cash” offers, which can in fact be quite tricky to deal with and are quite often not really what they appear to be.
The next type of offer which is likely to win in a “bidding war” is the one with the fewest contingencies. Most buyers will need to finance their purchase so a clause saying that the offer is subject to the buyer being able to raise a home loan is pretty standard.
However, buyers whose offer is also subject to being able to raise the cash for a deposit and transfer costs, for example, or subject to them first being able to sell an existing home, are very likely to lose out to buyers whose offer is not so encumbered.
Having said that, though, there are some sellers who would actually prefer the sale process to go quite slowly, so that they can stay on in their homes – perhaps until the end of a school year, or until a work contract ends and they are ready to move to their new home. And these sellers will, of course, be more responsive to offers from buyers that are prepared to accommodate their timing.
In addition, sellers who are very attached to their homes or who have painstakingly restored a historical monument may prefer offers from buyers who promise that their property will be in good hands or that they will respect its architectural heritage, even if these are somewhat lower than other offers.
But the one thing prospective buyers should never do to gain an advantage is put aside any doubts they have about the home’s condition. If they have the slightest suspicion that there may be some hidden defects, they should make their offer subject to a professional home inspection, and stick to their guns.
Source - Private Property/BetterLife Home Loans