August 13, 2010

3 things you must do prior to making an offer

So you've found your dream home and you're ready to write an offer. Hopefully you're already familiar with things like agency representation, the purchase contract, mortgage pre-approvals, inspections, conditions, deposits, down payment etc etc etc. These are all topics you should be intimately familiar with before you step foot in a home for sale. So, assuming none of that is a surprise, here are three things you should see before making an offer on a home:

The Title

The title has loads of information, such as: the names of the owners, any liens, caveats or encumbrances, restrictive covenants, the date the title transferred to the current owners, how much they paid for the property, and any mortgages registered on the property. It costs you $5 using Spin to pull title, and another $5 per registered document. Small price to pay considering that you could find out after moving in that your dream home is in a flight path.

The MLS® history

This shows you if and when the property has been listed on the MLS system, for how long and for how much (including price changes). That information can be priceless as it will give you an indication of the Sellers motivation. Ex. MLS history can show you that the sellers have been trying to sell their home on and off again for 3 years, and have had deals fall through because of financing. That information is power. Mind you that tiny little bit of information still needs to be interpreted and kept in perspective but nevertheless its power.

Comparable Sales

This will help you determine the actual value of the property. Many buyers get caught thinking if they get a certain amount off of the list price they are getting a deal, but if you get $50k off the list price for a home asking $75k more than it's worth….it's not a good deal.

These pieces of information are vital to anyone writing an offer. This will help you gauge the position the seller is in, how motivated they may be, and what the property is actually worth and more. TMS (title, mls, sales) don't write without it!

Good luck,

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