So it’s Monday morning and you visited the property of your dreams this weekend with one of us from Groupe Baronello, now you’re thinking about what to offer seeing as there were a slew of visits and you are expecting this one to be heavily bid on. How should you be thinking about it?
There is probably a few different emotions and thoughts going through your mind at this point, some about pricing, some about financing and mostly about the future. Controlling and organizing these thoughts when going into a bidding war situation or even just before starting a negotiation is crucial to being grounded and making the right decision, Here’s how we think you should organize yourself:
1. Evaluate and compare how well this property actually fits your needs and checklist for the future. – This will help you control emotions and thought process on why you really want this property and if it actually fits what you’ve been looking for or if it’s just the weekend love story. If it is not something that fits your current and future needs, maybe that is a sign of bad investment. Real estate is cyclical, so the longer you hold on to your investment, the safer it becomes. If it does not fit a 5 year plan, it might not be the best investment.
2. Prepare your budget and financial plan. – Does this property fit the financial mindset you have going into the next few years or does it blow the budget out of the water? Input all expenses related to the property into your monthly excel budget (And dont skip any expenses or it doesn’t count! ) and make sure you feel confident and financially responsible going into this purchase. Knowing you can afford something makes you feel comfortable and confident when making decisions, it will also help you make quick decisions about moving up on price if need be (knowing that you can afford more or less quickly by plugging it in)
3. Based on your budget and goal purchase price, what are the chances that you can close on this deal? – Sound like a bit of a weird thing to be thinking of when you’re making an offer and all your heart is telling you is “I want it!” right? well this is how you bring yourself back to reality. Is your goal purchase price too low in comparison to what your broker is telling you the property is worth? Are you aiming to negotiate too much off the price on a property that was just listed 3 weeks ago? Do the comparables tell you that its worth less or more? Making this clear to yourself will help you understand your chances of closing the deal, not being certain does not mean you shouldn’t write the offer, but it does help you understand and evaluate your chances of getting it and if you should adjust that goal purchase price.
4. Ask your broker what they think about the property compared to the current market around it. – There is no better consiglieri than your broker. They are the person that studies the market every day, they can give you insight on if the fee’s make sense, the divisions work, good or bad location etc. So just before making your final decision, listen to what your right hand has to say about it. Remember they’ve been shopping with you for 2-3-4 and in some situations even 6-12 months. They know exactly what you’re looking for at this point!
Now that you have the right mindset and you know that his is the best property for you, write the offer knowing your chances, knowing what needs to be done and you’ll sleep well at night knowing you gave your best for the property in all circumstances!