You’ve found the right home and you’re thinking of making an offer. This is where the home buying process tends to move quickly, so it pays to be prepared!
Ideal homes often receive offers within days of being listed. And when the market is hot, it can be hours. As a buyer, you can increase your chance of securing your ideal home with these three tips for making an offer on a home.
1. Visit a Mortgage Broker
This is the number one step you should take when you start to think about buying a home. However, some people still go out shopping before they talk with a broker. And unfortunately, I’ve seen a lot of disappointed people when they don’t talk with a broker first.
Sit down with a mortgage broker, like myself, and find out what you qualify for. This isn’t just about getting pre-approved with a great rate. It is about being prepared for when you do put an offer in.
Know what you qualify for, know roughly what your payments will be and what costs are associated with purchasing a new home (legal fees, home inspections, etc.)
Also, most realtors now will not let you look at homes without having this pre-approval in place. There’s far too much risk in shopping without it!
2. Bring Documents Upfront to Your Mortgage Broker
To speed up the approval process, it is best to bring all your documents upfront to your mortgage broker. Having these documents from the start makes my job far easier, and faster.
I can better qualify you on income, for example, if you receive hourly or salary plus bonuses. Did you know that a two-year average of income is needed when using bonuses and overtime hours?
Often clients say they make “X” amount but when it comes down to it, the “X” amount isn’t what can be used to qualify for.
Documents to Have Ready:
Last 2 years of Notice of Assessments (what CRA mails out once income taxes are filed). If you don’t have them, log in to your CRA account to access them.
Current employment letter stating tenure, employment status (full-time or part-time), guaranteed minimum hours, and pay.
Current pay stub*
Records of your source of downpayment. A three-month history of bank statements for savings, RRSPs or amount of downpayment being gifted. If the downpayment is from the sale of an existing home, provide a current mortgage statement and current home value.
* If you are self-employed, you will need to provide additional documents to verify your income. At a minimum, you need to provide two years of financial statements.
3. Seek the Advice of a Professional Realtor!
Contact a realtor and let them know your needs for a current home. I know there’s a growing popularity of trying to buy or sell a home without a realtor, but unless you have previous experience in this, do not do it. Work with the experts!
A realtor can filter what is in the market to meet your needs. Realtors also have exclusive listings of properties that you may not have by searching only online. They are also your representative when it comes to negotiating the price and conditions of the house you wish to buy. Leveraging their expertise will make the process faster and less stressful.
Now, I know these tips for making an offer on a home aren’t the most original. And, that’s because they work! If you want to get your home purchase started, let’s chat! I am also happy to recommend some trusted realtors and other experts to help you make an offer on a home.
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