What are we going to do with all the multiple offers this year?

Joel Olson • Jan 26, 2022

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So what is 2022 going to look like and how do we handle multiple offers differently?

So here we go. 2022 What's this year going to look like on the market?

Is it going to be another year full of multiple offers escalating house prices and buyers being frustrated not being able to crack into the market?

Is it going to be another year where we see limited inventory as a result of a lack of supply?

Where there isn't really that much to buy in the first place?

I mean, there's lots of predictions.

We all have our own opinions, but I suppose only time will tell.

All we know is what it is today.

And I can tell you a few things that we've learned that we are doing differently this year.

First, we are expecting there are going to be a lot of situations with multiple offers in particular, where people are meant to go firm, at least until this cooling off period is put into place by the government.

That means we have to be a lot more diligent about making sure our clients are ready to put in an unconditional offer.

A lot of brokers are scared to guarantee something like this.

A lot of brokers are nervous to give clients the go ahead on unconditional offers.

However, there's some better ways than what people have done.

The key here is to set up what's called Plan B financing.

It means that if, for some reason, the mortgage insurer doesn't approve you, if for some reason, you don't get approved by that lender that we’re 99.9% sure will approve you… what are we going to do?

That may include some type of approval with a B lender, or a higher interest rate or attaching a cosigner or adding security for the property.

All these things are things that we can put in place as a B plan so a client can go comfortably into an unusual offer, knowing that they do have at least guaranteed financing in some form.

This is a key difference to what people are doing in the marketplace.

You would not believe the amount of frightened phone calls we get from people that have firm offers that really didn't have financing organized in the first place.

It's safe to assume that, even though people are telling you they think they'll be okay.

Really, it's a scramble to the end making for a very, very stressful situation for our clients.

So our plan and our process includes for everyone who's offered, to put a “B” financing plan in place.

This is an important distinction and will make you look better to your clients and have a less stressful situation.

It also means that the client can comfortably offer in a situation not just unconditional, but I think to go above asking they can do so comfortably with us talking through that.

The second part that we might add to that would be to do an inexpensive pre-appraisal on a property through an actual appraisal.

Now we all know what property a should sell for and won't sell for - we will have our comparables, but why don't we have something that is legitimate from an appraiser?

That’s something we can rely on… that means that we could actually go a little bit higher on that property.

There's a way to do a pre-appraisal that can give some comfort around those values and comfort around going above asking (price).

Now, of course, if this cooling off period comes into play, all bets are off.

It means that we will have a week to sort out financing.

This means our mortgage approval assurance plan we've talked about many times, which means our pre- approval is going to come with a $5,000 guarantee to the seller is going to make all the difference.

If you don't know about that and want to schedule a time so you can have your clients take advantage of having $5,000 against the seller, please do schedule a call with me.

Lastly, time kills all deals.

We've heard loud and clear that a big issue with offers is that people do not have enough time to get the offer done.

Many banks, many brokers, many lenders are asking for a full one week for some locations and finding that those offers rarely even pique the interest of most sellers.

Now of course, people want to have adequate time, but what if there was a way to get the client extra pre- approved?

I'm talking about making sure we have the identification.

Making sure we have the voided check, making sure we have every bank statement.

What if there was a way for us to make that pre-approval work so that they can have a one day approval?

This is possible for a limited amount of realtors and a limited amount of clients on an ongoing basis.

We can offer approvals that are firm in one day. If you'd like to know how to take advantage of this and the strategy this uses, please schedule a time with me because we can do an approval in one day.

That's right.

Make an offer 24 hours later and remove the subjects - this is huge in this market.

Obviously these are just some of the many strategies we do and many are catered to your specific marketing needs.

We would love to have a chance to go through anything we can help you with this year.

It's going to be a busy one.

Let's be prepared!

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Protect Yourself with a Pre-Approval

By Joel Olson • 07 May, 2024

There is no doubt about it, buying a home can be an emotional experience. Especially in a competitive housing market where you feel compelled to bid over the asking price to have a shot at getting into the market. Buying a home is a game of balancing needs and wants while being honest with yourself about those very needs and wants. It’s hard to get it right, figuring out what’s negotiable and what isn’t, what you can live with and what you can’t live without. Finding that balance between what makes sense in your head and what feels right in your heart is challenging. And the further you are in the process, the more desperate you may feel. One of the biggest mistakes you can make when shopping for a property is to fall in love with something you can’t afford. Doing this almost certainly guarantees that nothing else will compare, and you will inevitably find yourself “settling” for something that is actually quite nice. Something that would have been perfect had you not already fallen in love with something out of your price range. So before you ever look at a property, you should know exactly what you can qualify for so that you can shop within a set price range and you won’t be disappointed. Protect yourself with a mortgage pre-approval. A pre-approval does a few things It will outline your buying power. You will be able to shop with confidence, knowing exactly how much you can spend. It will uncover any issues that might arise in qualifying for a mortgage, for example, mistakes on your credit bureau. It will outline the necessary supporting documentation required to get a mortgage so you can be prepared. It will secure a rate for 30 to 120 days, depending on your mortgage product. It will save your heart from the pain of falling in love with something you can’t afford. Obviously, there is nothing wrong with looking at all types of property and getting a good handle on the market; however, a pre-approval will protect you from believing you can qualify for more than you can actually afford. Get a pre-approval before you start shopping; your heart will thank you. If you’d like to walk through your financial situation and get pre-approved for a mortgage, let’s talk. It would be a pleasure to work with you!

Costs Associated with Buying Property

By Joel Olson • 23 Apr, 2024

When calculating if you can afford to purchase a property, don’t just figure out a rough downpayment and quickly move on from there. Several other costs need to be considered when buying a property; these are called your closing costs. Closing costs refer to the things you’ll have to pay for out of your pocket and the amount of money necessary to finalize the purchase of a property. And like most things in life, it pays to plan ahead when it comes to closing costs. Closing costs should be part of the pre-approval conversation as they are just as important as saving for your downpayment. Now, if your mortgage is high-ratio and requires mortgage default insurance, the lender will need to confirm that you have at least 1.5% of the purchase price available to close the mortgage. This is in addition to your downpayment. So if your downpayment is 10% of the purchase price, you’ll want to have at least 11.5% available to bring everything together. But of course, the more cash you have to fall back on, the better. So with that said, here is a list of the things that will cost you money when you’re buying a property. As prices vary per service, if you’d like a more accurate estimate of costs, please connect anytime, it would be a pleasure to walk through the exact numbers with you. Inspection or Appraisal A home inspection is when you hire a professional to assess the property's condition to make sure that you won’t be surprised by unexpected issues. An appraisal is when you hire a professional to compare the property's value against other properties that have recently sold in the area. The cost of a home inspection is yours, while the appraisal cost is sometimes covered by your mortgage default insurance and sometimes covered by you! Lawyer or Notary Fees To handle all the legal paperwork, you’re required to hire a legal real estate professional. They’ll be responsible for transferring the title from the seller's name into your name and make sure the lender is registered correctly on the title. Chances are, this will be one of your most significant expenses, except if you live in a province with a property transfer tax. Taxes Depending on which province you live in and the purchase price of the property you’re buying, you might have to pay a property transfer tax or land transfer tax. This cost can be high, upwards of 1-2% of the purchase price. So you’ll want to know the numbers well ahead of time. Insurance Before you can close on mortgage financing, all financial institutions want to see that you have property/home insurance in place for when you take possession. If disaster strikes and something happens to the property, your lender must be listed on your insurance policy. Unlike property insurance, which is mandatory, you might also consider mortgage insurance, life insurance, or a disability insurance policy that protects you in case of unforeseen events. Not necessary, but worth a conversation. Moving Expenses Congratulations, you just bought a new property; now you have to get all your stuff there! Don’t underestimate the cost of moving. If you’re moving across the country, the cost of hiring a moving company is steep, while renting a moving truck is a little more reasonable; it all adds up. Hopefully, if you’re moving locally, your costs amount to gas money and pizza for friends. Utilities Hooking up new services to a property is more time-consuming than costly. However, if you’re moving to a new province or don’t have a history of paying utilities, you might be required to come up with a deposit for services. It doesn’t really make sense to buy a property if you can’t afford to turn on the power or connect the water. So there you have it; this covers most of the costs associated with buying a new property. However, this list is by no means exhaustive, but as mentioned earlier, planning for these costs is a good idea and should be part of the pre-approval process. If you have any questions about your closing costs or anything else mortgage-related, please connect anytime; it would be great to hear from you!