Friday, November 20, 2009

Making an offer on the house

One of the scenarios that I have seen a lot in the Ottawa real estate listings is to place the house on the market for a week or so before accepting any offers. In this case, a specific date and time will be given for when offers will be accepted. This gives potential buyers the time to look at the house, arrange financing and get an inspection done before making an offer. In that way, they can hopefully make an unconditional offer on the house. The other side to this, of course, is that if there is a lot of interest in the house, then a number of potential buyers may show up at the specified time to make offers. This is what happened to us.

Of course, you never are totally sure if another potential buyer is going to show up, so it pays to show up with two offers in hand. The first offer is the low offer that will be given if there are no other potential buyers standing on the curb. The second is the high offer, which will be given if competing buyers do show up. We had two such offers in hand, and sure enough, another potential buyer showed up, so we threw out the low offer and went with the higher one.

The way the process worked for us was that each agent individually went into the house to make their pitch on behalf of their client. The process takes about 10 minutes per agent. After hearing both pitches, the seller picked our offer,with one condition.

Our offer contained the condition that we wanted 5 days to arrange appropriate financing. We knew we wanted to renovate and it was going to take our mortgage broker a little longer to arrange the financing to both buy the house and renovate it. We had already completed a house inspection, so the offer was not conditional on an inspection. However, the seller wanted us to shorten the time to arrange financing down to 4 days. In the next post, I will get into the details of the negotiation.

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