If there’s one thing I hate doing, it’s holding back on a celebration.
After all, if you’ve found your dream home and are ready to move in, why hesitate?
In my years as a mortgage broker, I’ve seen plenty of people miss the train on buying their first home. Sad trombone.
But don’t despair if you’ve gone to make an offer on a home and someone else has beaten you to the punch. Here’s how to come out on top next time.
- Get your mortgage pre-approved
When a vendor is selling their property, they likely want to get the ball moving ASAP. If you can’t get your mortgage approved in time, and someone else does and they have a better offer, you’re not going to finish first. Which brings me to my second tip.
- Check your credit score.
When you apply for a mortgage, a good credit score is a must. Your credit score is an accumulation of all your credit activity – defaults on debts, late payments, etc – that an independent authority keeps tabs on. The bank can access this information, and it plays a huge factor in the outcome of your mortgage application. Read more on this here.
- Get a buyer’s agent
Not comfortable with your negotiating skills? A buyer’s agent will do the groundwork for you. As well as making offers at auctions, buyer’s agents also make offers for private sales. They know how to make a reasonable offer and what the vendor’s agent will see as a good deal. Any agent worth their blazer will also likely have a rapport with the vendor’s agent, so they’ll be able to work together to come to a mutually beneficial outcome. Using one could be the difference between getting that home for the price you want, or missing out entirely.
- Know when the offer is binding
It’s unfortunate when you make an offer on a home, assume its been accepted, and then receive word that someone’s given the vendor a better offer. It’s uncommon for this practice to occur, but the show isn’t over until you’ve signed the dotted line. At this point, the vendor knows that the sale is binding and stops taking offers from other parties. And always check the paperwork to ensure that the sale is conditional.
- Have your deposit ready to go
Once the offer’s been accepted by the real estate agent and vendor, make sure you have a depsoit (direct transfer, cheque, deposit bond) lined up. This should be kept in the real estate agent’s trust account if your offer is accepted.