On One Condition!

Get a few extra days to think and research your investment, while ensuring you've got the deal if you want it. You do this by putting in an offer with conditions in it. We always do this so we have a way out in case our financing doesn't work out well, the inspection turns up big problems or we find a better opportunity.

To give yourself a few extra days of thinking room, while ensuring you have the property if you want it, put in an offer "subject to" financing or an inspection. This will usually give you 5 - 10 extra days (identify in the offer that they are business days) to get everything in order. A deposit of $1,000 should hold the property in the meantime. If you decide to walk away in that 5 - 10 day timeframe then you get your money back, and the property goes back on the market.

We often find there is significant pressure to put down a larger deposit. Agents will say that this shows you are serious. A larger amount down can be challenging if you are doing a deal like we often do that requires, for example, refinancing one property to get the downpayment for the second, getting a Vendor Take Back mortgage to help reduce the required down payment, or if you are pulling your down payment out of RRSP's or somewhere else.

We have found that a way to work with this request is to say you will pay a $1,000 deposit conditional upon acceptance of the offer by the vendor. Then, pay an additional $5,000 deposit or more, upon the removal of conditions. Once the conditions are removed, the deal is very hard to walk away from and you have had another week or two to pull together a little bit extra money to solidify the deal.

It's important to remember that putting in an offer shouldn't be stressful as long as you have a condition that allows you to back out. The more important consideration is whether your offered price works within your goals. Now, get out there and start making some offers! Practice makes perfect!

Published August 15, 2006

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