When you decide you want to make an offer on a property, the first thing we will do is determine whether there is an “offer day” or if they are accepting offers any time. In the “offer day” scenario, you will have to either wait until the requested day to make an offer, or provide a “motivating” offer to encourage a seller to consider your offer before the offer day.
Sellers and their agents employ different listing strategies depending on the price point of the home, the location, the market conditions and the seller’s preference. When listing a property, an agent will make a recommendation to their client based on an assessment of these factors.
When a home has an offer date, typically they list at a lower price than they are hoping to receive to garner interest from multiple parties and create a “bidding war” that will drive the sale price over the listing price.
When sellers do not have an offer date, they are typically listing at a price they feel is fair market value and one they are prepared to accept if an offer is made. As your buying agent, we will always inform you of the strategy associated with the listing you are considering and advise you on how to best approach the situation.
We will strategize with you on the key components of the offer: Price, closing date, deposit, any conditions or special clauses.
Conditions are inserted into an offer to allow a buyer to do their due diligence on a certain topic before an agreement of purchase and sale becomes firm. Typical conditions are home inspection, financing, solicitor approval and status certificate review (condos).
In the Toronto real estate market, a 5% deposit is now considered the norm on a successful purchase. That deposit is either provided to the listing brokerage immediately upon offer acceptance, or within 24 hours of acceptance. If you are in competition for a property, a deposit higher than 5% can carry more weight from the seller’s perspective. This is supplied by bank draft or certified check, depending on what is stipulated in the offer. It improves the strength of an offer to provide a deposit with the offer itself whenever possible. The deposit is held in trust with the listing brokerage and that deposit is put towards your purchase price at closing.
Many people use their bank for their mortgage pre-approval and subsequent mortgage since they have an existing relationship with their financial institution (savings accounts, investments, credit cards, loans). A mortgage broker shops your mortgage qualifications out to other banks/credit unions to find you the best rate, which can sometimes be better than the rate you receive from your bank. Generally it’s best to look into both options before making a decision.
Depending on the age and condition of the home, generally 1% of the purchase price per year should be kept aside for minor ongoing maintenance repairs (excluding ongoing landscaping/lawn care).
Fewer people are open to living on busy streets due to noise and safety concerns, so resale can be an issue in a slower market. It can be a means to get into a neighbourhood or school district that may ordinarily be out of reach, but generally we try to find options on more coveted streets if we can make it work with your budget.
There are several costs you can expect in addition to the price of your home. For more information, reference our closing costs breakdown and calculators.
Land transfer tax is paid on closing and through your lawyer. You can plan ahead for that cost using our calculator.