Wow!! What a change since last week when I was questioning a "Lull in the marketplace." Seems as if everyone took notice of what I said. All the buyers came out of the woodwork and it turned out to be a busy time and successful for some, but not all...
So this week follows on from a story of not being successful because "they were not prepared."
I have been working with a lovely couple Tim and Sue (not their real names) who are trying to buy a home in the $450,000 range. They are both working full time, have good incomes and an excellent credit rating. This past weekend we submitted an offer only to find out that we were competing with 3 other buyers.
Now Tim and Sues' challenge was that they did not have the 20% down payment and would require in theory to have Mortgage Insurance at the price they needed to offer. (If you buy a home with less than a 20% down payment you need CMHC Insurance and the rate depends on what percentage down payment you have.)
They chose to make a good offer conditional upon financing, which under most circumstances is a good practice. However, in this case at the price they were offering, if they had been prepared, they could have made the offer with no conditions. Consequently they lost the home by just $2,000. They, in fact, had the highest offer but the other buyers made a firm offer (No conditions) and the sellers opted to take a firm offer for less money.
Had Sue and Tim clearly understood the financing options they had, prior to making the offer, they would have been the proud new owners of the home.
I had been encouraging them to have me speak directly with their bank representative prior to making an offer so that we could have a strategy in place for such a circumstance. There are other options when one is almost, but not quite at the 20% down payment requirement. Unfortunately for them, this discussion did not happen. They are now working with our team of Mortgage Brokers to get complete advice and have more financing options.
Remember it is the scout's Motto to "Be prepared"which means you are always in a state of readiness in mind and body to do your duty.
Knowing your limitations and opportunities up front can mean the difference in being able to afford a home or not, even when the market is competitive. Not all circumstances are the same and in most cases one has to include conditions. This is when knowledge is absolute power.
If you want to have a "What are my options conversation" with me, follow this.
Keeping you safe... Since my most important goal in any real estate transaction is to keep my clients safe, here is one of the ways I can protect you. It is my Home Protection Plan which asides from providing worry free home purchases and sales, can even protect you from events by others that may prevent you from closing a transaction. Follow This to know more...