Welcome to our First-Time Homebuyer #BlogSeries5. We’ve compiled answers to frequently asked homebuyer questions to help you understand the many variables associated with buying your first home. It’s our job to make this process as enjoyable and stress-free as possible for you!
There’s no magical formula used to deduct a certain percentage from a listing price. There are just too many variables to consider in the process. This is another reason why it’s important to use a real estate expert who’s well versed in the area to help you throughout the entire homebuying process.
First, you have to decide if the listing price is accurate based on the home’s condition and comparable properties in the neighbourhood. If the listing price makes sense, it’s safe to say that the offer price should be fairly close to the listing price to be considered fair. Most sellers leave some wiggle room for negotiation.
But, if you’re in a seller’s market – meaning there’s a shortage of inventory in your price range based on the number of potential buyers – the negotiation room will be smaller based on the reality of supply and demand.
Other things to consider includes:
1. Is the offer conditional or firm? Conditions are items that must be completed or fulfilled before closing. The top two conditions for first-time homebuyers are home inspection and obtaining financing. You can also list anything you want the seller to pay for such as warranties, repairs, credits for damages, and so on. We recommend never going in firm without having extensive conversations with both your real estate and mortgage agents. The consequences are just too great to overlook when making among the largest financial purchase of your life.
2. Inclusions and exclusions. Your offer may be contingent on certain items being either included or excluded from the sale. These items can include anything from appliances to decorative items, such as window coverings or mirrors (these items are referred to as ‘chattels’ in an offer to purchase).
3. Closing day. As a first-time buyer in particular, the closing day can be a negotiating tool, since you don’t have to worry about selling another property prior to closing. If the owners of the home you wish to purchase want to close quickly, they may be open to added negotiation on price, inclusions, etc