Real Estate Talk:
Promise to purchase first!
Insist on price and terms prior to due diligence
By Joseph Marovitch
Updated February 13, 2019
How often, in the process of selling a property, do potential buyers ask for documents such as the electrical or oil invoice, receipts for the roof and so on, before they provide a promise to purchase. This is extremely annoying if there is not an agreement on price and terms in advance.
Sellers are anxious to sell despite what they may say, otherwise they would not place the house on the market. So, when a prospective buyer asks questions about the house during a visit, sellers get excited. After the visit, when a buyer asks for invoices, the seller gets more excited. As prospective buyers ask for more and more due diligence before the offer, sellers get so excited they can hardly wait for the amazing offer.
It is far better to know if buyer and seller are in the same ballpark before the seller exerts effort, only to find out they are not even on the same playing field.
Then the offer arrives at far below the asking or the prospective buyer does not make an offer at all.
These are the most discouraging moments in real estate. This is why, when a prospective buyer asks for items, it is better to tell that buyer to place the requests in a written promise to purchase. It is far better to know if buyer and seller are in the same ballpark before the seller exerts effort, only to find out they are not even on the same playing field.
Note regarding the article Perils of overpricing
This past week a reader of last week’s article, Perils of overpricing, stated to me that there is nothing wrong with shooting for the stars in terms of asking a price for one’s property and ignoring the comparable competition that is on the market. The comment was why not ask for as much as possible? One important issue that will occur in asking far more than the market will allow is that the seller will not know if the price is too high or if the broker is not advertising.
Professional realtors are trained to know and produce an accurate market price based on comparable property in the same area. If the broker knows the seller’s property is worth $700,000 and the seller insists on $1,1 million, the broker will not want to spend on advertising, newsletters, email and more, knowing they will lose time and money. All the broker has to do is place the property on Centris and start collecting buyers in the million-dollar range and take them elsewhere.
Should you have questions or comments, please refer to the comments section at the bottom of the page. As well, to view past articles, click here.
Have a great week!
Next article: Fear of inspection
State of the market
According to the CMHC (Canadian Mortgage and Housing Corporation), the Montreal market is stable. Prices continue to rise as does demand. In the same breath, the CMHC states actual sales are declining as there is less inventory and that new construction is declining. No surprise since there is less and less space in which to build. This is no reason to fret. The outlying regions are where development will occur next. From St. Lazare to Boisbriand developers will continue with new construction condos and single homes.
Montreal will simply expand like every other city in the world. In the meantime, investors can know that their single homes, condos, income properties and industrial buildings will become more and more valuable on the island of Montreal. Real estate prices will also continue to rise as the city invests more and more in infrastructure as is the plan with wider sidewalks, above ground metro systems, large shopping malls, city-wide free Wi-Fi and new bridges.
The future looks exciting.
Joseph Marovitch has worked in the service industry for over 30 years. His first career was working with families from Westmount and surrounding areas, hosting children between the ages of 6 to 16 as the owner and director of Camp Maromac, a sports and arts sleep away summer camp established in 1968. Using the same strengths caring for the families, such as reliability, integrity, honesty and a deep sense of protecting the interests of those he is responsible to, Joseph applies this to his present real estate broker career. Should you have questions please feel free to contact Joseph Marovitch at 514 825-8771, or firstname.lastname@example.org