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Real Estate Talk:
Promise to purchase first!

Insist on price and terms prior to due diligence

By Joseph Marovitch

Updated March 10, 2021

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 for the seller 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 price or the prospective buyer does not make an offer at all.

These are some of the most discouraging moments in real estate. Therefore, 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.

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.

Next article: Fear of inspection


STATE OF THE MARKET

According to an article in the Financial Post dated March 2, 2021, interest rates are slowly beginning to rise. The base rate set by the bank of Canada rose by 25 basis points recently to 1.64%. Mortgage rates are still extremely low, however, after a year, rates are rising. This is an effect of increased confidence in the market due to the expectation that the pandemic is coming to an end. Another effect will be more property for sale as we start to come out of our homes to a hopefully safer world. That is if we are smart enough to know that precautions are still required. Mask burning parties are a really bad idea.

‘Mortgage rates are still extremely low, however, after a year, rates are rising. This is an effect of increased confidence in the market due to the expectation that the pandemic is coming to an end.’

There also appears to be renewed confidence in commercial retail as more and more inquiries come for retail and commercial space in the downtown core. Many entrepreneurs believe that there is massive pent-up demand to go out and party, see a show, have a bite to eat and get our hair cut.

Therefore, demand has increased for retail space. People are renting with a longer fixturing period, meaning time to prepare a space to be ready to operate when restrictions are lifted. Like interest rates, the demand for retail space is rising slowly, but it is rising. If we can stay on track and remain disciplined by continuing to wear masks and social distance, this forecast of a re-emerging and booming with a vengeance economy will not be far off.

For any questions, please feel free to write in the comment section that follows. I would be pleased to answer.

Have a great week and stay safe!


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Other articles by Joseph Marovitch


Joseph Marovitch - WestmountMag.ca

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 for, 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 josephmarovitch@gmail.com



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