Multiple Offers - Questions to consider in a sellers market

When home buyers outnumber sellers, the result can be a multiple offer scenario. If you’re searching for homes in a competitive market environment, you’ll want to take time to understand the dynamics of multiple offers and understand how this might impact your negotiating strategy. Some questions to discuss with your buyer’s representative:

Will I know if I’m in a multiple offer situation?

Not necessarily. Typically it works to a seller’s advantage if buyers are told they are competing with one another. But a seller must disclose the existence of other offers before this can be shared with your buyer’s rep.

How will offers be presented to the seller?

The seller decides how they want this handled, either individually or as a group presentation. Once presented, a seller can elect to accept (or counter) one offer, reject all offers, or reject all offers in conjunction with a request to resubmit a “highest and best” offer.

Will the details of my offer be kept confidential from other buyers?

The only way to preserve confidentiality is to ask the sellers to sign a confidentiality agreement before presenting your offer (which also applies to their agent). However, if the seller decides to have a group presentation of offers, you’ll either have to withdraw your offer or revoke the confidentiality agreement.

If my offer has the highest price, can I be confident that I’ll beat out other buyers?

No. Sellers can accept whichever offer they consider “best” and that may be based on other factors, like the certainty of closing (e.g., the buyer is already approved on their mortgage) or flexibility on closing dates.

What are my options for writing a stronger offer?

In addition to firming up your financing (or paying cash) and offering flexibility on timing, there are a number of other things you can do, including eliminating contingencies, increasing your earnest money deposit or paying closing costs, to name a few. Discuss your options with your buyer’s rep.

If I don’t want to compete with other buyers, can I withdraw my offer?

Yes, as long as you deliver notification to the seller revoking your offer before they’ve accepted it.

Every home buyer benefits from having their interests represented in a real estate transaction, but in a multiple offer scenario, you’ll gain even more if you’re working with your own Buyer’s Representative.

Discuss these and other questions with your buyer’s rep so you can anticipate each step in the negotiation process and improve the likelihood of a successful outcoe

 Steven Porter is a licensed mortgage agent with Mortgage Architects and is formerly a successful real estate broker/Accredit Buyer Representative (ABR) with 30 years past real estate experience. Steven can be reached at 905-875-2582 or EMail: steven.porter@mtgarc.ca

Reverse Mortgages: The Good, and the Misunderstood

Most homeowners dream of the day they make their final mortgage and own their home outright. Few think about what it might be like to have their home make payments back to them.

This is called a reverse mortgage, where for those of a certain age and who own their home outright or have a substantial equity position can take advantage of that equity in their home, through the lender, who in-turn provides a portion of that equity back to the homeowner. 

The CHIP Reverse Mortgage, allows qualified individuals to continue to living in their home without ever having to make any payments, and at the same time receive a lump-sum (single advance of all available funds) to be used for whatever you like and/or subsequent advance (partial initial advance and open for future advances). Typically, the loan does not have to be repaid until the house is sold or the homeowner passes.

While the majority of homeowners of all ages continue to take the "re-fi route" when it comes to pulling additional capital out of their homes, a growing number, baby boomers in particular, are turning to a reverse mortgage as a way to supplement their retirement income.

Reverse mortgages can be beneficial for seniors with little to no income who wish to remain in their current home but may have various types of medical or life expenses (debt, renovations/improvement, travel, help children/grandchildren) to pay for and are  on a fixed income and can't afford or qualify to take on more debt. 

The typical maximum a homeowner can get in a CHIP Reverse Mortgage is up to 55% of the value of the home (dependent upon age, location and type of home). There is no income qualification for a reversed mortgage, so if you are the age of 55 or older and you decide to stop working you can choose to live off of your home as opposed to struggling to make payments each months.

For more information about the CHIP Reverse Mortgage or Income Advantage plan, call me, Steven Porter, Mortgage Agent and Certified Reverse Mortgage Specialist at 1-905-875-2582.

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Real Stories, Real Life, Real Clients

 

For Millennials, buying a home is a distant dream unless parents help with down payment . . .

 For parents, a reverse mortgage can provide funds            

Young Canadians living in hot housing markets such as Vancouver and Toronto are increasingly looking to their parents for help with down payments when it comes to purchasing their first home.  And, for parents who have seen the value of their homes rise dramatically in the last 10 years, a reverse mortgage is often an attractive way to assist adult children.

That's according to HomEquity Bank experts, who are helping more Canadian seniors set up reverse mortgages so funds may go to adult children needing a down payment on their first home.  

And, financial experts are seeing the same trend of parents helping adult children purchase a first home.

"Ten years ago, this topic rarely came up as most seniors were more concerned with remaining self-sufficient. And, first time homebuyers were purchasing houses on their own. That's changed. Up to 30% of my clients aged 60+ now want to discuss to what degree they can help their adult children financially," explains Rona Birenbaum, financial planner and founder, Caring for Clients.

In fact, it's become such a large part of its service offering that Caring for Clients created a comprehensive, 20-hour assessment program to help clients best determine:

• What is a safe amount to provide to adult children?
• How to be fair and equitable with all children.
• With the amount of money provided, what options are available to adult children? For example, what size mortgage is viable if using funds to purchase a first home?
• How can they protect their money gifted to adult children?

"Most parents want to know that they can protect their money and still lend funds to adult children wanting to purchase a home. By setting up the financial assistance as a zero-interest mortgage, registered on the property, the funds are protected. So, in the event of divorce and the sale of the home, the money goes back to the parents," adds Ms. Birenbaum.

However, if over the long term the marriage does not break down, the parents simply de-register the mortgage and the money is considered a gift, she notes.

"Without help from parents, it's getting to be next to impossible to get into the housing market – especially in Toronto and Vancouver," explains Ms. Birenbaum.

Adds Yvonne Ziomecki, SVP, HomEquity Bank: "The seniors we work with to provide reverse mortgage solutions tell us without financial help, their adult children would be locked out of the housing market.  So, tapping into the equity of their home and providing a down payment becomes an important way to give their children a way to enter the real estate market."

For many first home buyers, condos are a way into the real estate market. The average cost of a condo in Toronto, according to information released in April, 2016 by the Toronto Real Estate Board (TREB) is $393,589. In Vancouver, according to information released in January, 2016 by the Real Estate Board of Greater Vancouver, condos now sell for, on average, $466,600.

HomEquity Bank, the only Canadian bank working exclusively with seniors, provides funds through its CHIP reverse mortgage solution www.chip.ca. Seniors can supplement their income, or tap into the equity of their home, via reverse mortgage monthly or lump sum payments.

About HomEquity Bank

HomEquity Bank is a Schedule 1 Canadian Bank offering the CHIP reverse mortgage solution www.chip.ca.  It was founded 30 years ago as an annuity based solution addressing the financial needs of Canadians who want to access the equity of their top asset – their home.