How to Get Your Offer Accepted in a Toronto Buyer's Market

| Buying

Negotiating finesse is your best friend when making an offer on a house. Although a market with tons of inventory tends to mean the buyer has the upper hand, sellers can still kick your lowball offer right off the table if they base their expectations on high-profit pricing from the not-so-distant past. Here we share our expert negotiating tips on getting your offer accepted in a Toronto buyer’s market.

Know How Much to Offer on a House

A savvy seller’s agent will strategically list a home to attract more offers but with an ultimate price in mind. So what you see is not always what you get price-wise. Meanwhile, the buyer’s agent’s job is to ensure their clients pay a fair price based on current market conditions. While negotiating the price downwards without spooking the seller is our goal, we base our initial offer price on the following factors:

  • Comparables: We always defer to solid data to negotiate the best price. We base our initial offer on the micro-neighbourhood’s average selling price in the past 60 to 90 days to come in strong and make it clear we know what we’re doing.
  • Home type: The type of home is important because not all homes are in high demand. Again, comps help us determine what the market deems fair based on whether it is a condo apartment, townhouse, semi-detached, or detached home.
  • When the home was listed: New listings tend to be less flexible, while stale listings are more likely to accept offers slightly below the listing price.
  • Neighbourhood: Regardless of the market, high-demand neighbourhoods are harder to get into than areas that are less trendy, convenient, or further from amenities, so offers still have to be strategic.
  • Home condition: While we’re not likely to show you a home in poor condition unless you’re specifically looking for a “fixer-upper,” the home’s condition plays a major role in your offer.

For more tips to inform your next home purchase, check out these posts next:

How To Negotiate a House Price

So, how much less can you offer for a house? The thing is, you shouldn’t just focus on the price. Yes, while the price is typically the first thing the seller looks at, there are other factors we can include in the offer that can make a slightly lower price appear more reasonable. Helping make the seller’s life easier is a gesture not often ignored. It can also make you seem more sincere in your desire to own the home. Some terms that can help get your offer accepted might include:

  • More flexibility on the closing date so you and the seller can avoid rushing or paying double mortgage/rent
  • An easier “out” if anything is found during the inspection, such as a discount to cover the repairs instead of demanding the seller make repairs before closing
  • Accepting the seller’s counteroffer for a reasonable price but asking to include something not originally included as chattel, such as appliances
  • Having a pre-approved mortgage to reduce risks your financing will fall through

Learn more about negotiating and the offer process with these posts next:

What is a Low-Ball Offer?

A lowball offer is way off the mark, asking for a price discount over 10% or even 20% of the home’s fair market value. No matter how desperate a seller might be, lowball offers frankly make you look like a jerk, and no seller is going to sell their home to a jerk. Although you can get away with steeper discount offers during a buyer’s market, going lower than 10% is a sure-fire way to get your offer rejected.

The process of buying a home can also change depending on broader economic factors. Learn more about this by reading: Benefits of Buying a Home During a Recession.

How Much Do Sellers Usually Come Down on a House?

In a buyer’s market, we tend to see listings have far more downward flexibility, ranging from 2% to 10%. While homes in desirable areas sell fast for or slightly above asking even in a saturated market, the longer a home sits on the market, the higher the discount the seller tends to accept.

Sweet Spot: How Much Lower Can You Offer on a House?

In a buyer’s market, perfect homes in the most desirable areas sell at asking, while equally sweet homes are outshone time and again simply because of an overabundance of options. Therefore, targeting solid listings that have seen too many days on the market provides a pricing opportunity. Sellers suffering from listing fatigue are ready to accept a reasonable offer even if it is under asking because they simply want the home sold. As a result, we can look for older listings as well as price reductions to get your offer accepted for a bargain price.

Are you in the market for a home in Toronto? Here at The Christine Cowern Team, we love helping buyers get the best possible value for their money. Whether you’re in the market for a condo, townhouse, or detached home, we can help you pick the right one at the right price. Get in touch today to learn more. Call us or email us to start a conversation today.