Making an Offer on a Condo
Before making an offer to purchase the condo, it is very important that you have been at least pre-qualified or better yet pre-approved by a mortgage lender.
This is one of the best negotiating tools a buyer can have. It shows the seller that you are financially able to purchase the condo. After you have found the condo that's right for you, it's time to make an offer.
When you are buying a condo or townhouse, there are some issues that the seller is obligated to disclose, usually on the property discloser statement. For example, in most provinces, it is illegal to withhold information about major physical defects on the property, but, these disclosures don't always paint the entire picture of the health of the property. Here are six questions you may want to ask that can offer additional insight into the prospective condo before you make an offer to purchase the condo.
1) Why is the seller selling? This question may help you evaluate the "real value" of the property. Is there something about the property the seller does not like? If so, you may be able to adjust the offer to purchase accordingly.
2) How much did the seller pay when they purchased the condo? This question can, in some instances, help the buyer negotiate a better deal. However, it is important to remember that the purchase price is influenced by several factors, like the current market value and any improvements the seller may have made to the property. The original purchase price might not have anything to do with the current value of the condo or townhouse, but if the seller is motivated and there is a lot of equity, you might be able to get a better deal.
3) What does the seller like most and least about the property? By asking the seller what he or she likes most and least about the property, you might get some interesting information. In a few cases, what a seller likes the most about a home might actually be something the buyer is looking to avoid. For example, if the seller describes his condo as being in a "happening neighbourhood," the buyer might consider this a negative factor because the area may be too noisy or busy for his or her taste.
4) Has the seller had any problems with the condo in the past? It is also a good idea to ask the seller if he or she has had any problems with the condo while living there. Has the seller had problems with leakage from the upstairs unit in the past? If so, even if the leak has been corrected, the floor and walls around the bathroom might have been damaged. You should also check that these items were repaired properly.
5) Are there any nuisances or problem neighbours? Use this answer to find out about any noisy neighbours, barking dogs, heavy airplane traffic or even planned changes to the community, such as a planned street widening. If the seller doesn't tell you, you can usually find these answers in the condo documents and this may give you insight on why the seller is really moving.
6) How are the public schools in the area? Because the value of a community is often greatly influenced by the public schools in the area, its an important to do some research. The Fraser Institute has a comprehensive report on Kelowna schools that can give you some insight into the quality of the area's schools.
Knowing all you can about a prospective condo, not only helps you decide if it's the condo for you but what offer to make as well. Our Condo expert, Mark Walker can help get your key questions answered and give you advice on what kind of offer to write as well.