Making an Offer on a Property
There are several ways you can buy property in Australia. The most common ways are at an Auction or by Private Treaty. In this article we will cover how to successfully make an offer on a property being sold by Private Treaty. It’s something that we as Buyers Agents do all the time and we have a few tips for you to improve your chances of success at the right price.
1. Ensure you have done your research and asked the right questions
- Before even contemplating making an offer, make sure you have first established the maximum you would consider paying for the property. Take the time to inspect other similar properties in the local area and follow up on their sale prices. Go to a few auctions to get a feel for the market and how competitive it is. If you need some assistance with pricing consider getting a professional to do a property appraisal for you.
- Take note of others at the inspections. Do they seem keen, what questions are they asking and were they seriously engaging with the sales agent?
- Ask the agent if any other buyers have requested contracts, building inspections or strata reports. This will give an idea of the level of interest from other parties
- Try to find out about the vendors, their motivations and anything that would help you make your offer more attractive
- Make sure you have completed your due diligence. Building inspections, strata reports, checking of contracts and other investigations should ideally be done prior to submitting your offer
2. Make your offer in writing to the selling agent
While you are not required to put your offer in writing, it’s usually best to do so. This confirms to the agent and vendor the terms and conditions of your offer and there is no ambiguity. It can also show that you are serious about your offer.
You will need to include the following details:
- The details of the property
- Your offer amount
- Settlement period. This can be either what is stated on the contract (usually 42 days), or a preferred timing. You could also nominate a different period because you know it would be more appealing to the vendor
- Include the offer expiry date and time so it will put pressure on the vendor
- Is your offer is subject to any conditions? Do you need to finalise due diligence (building inspection, strata search etc). You should state this with your offer
- State if the exchange of contracts is to include a cooling off period, or if the exchange is to be unconditional. In the case of a pre auction offer you will need to remove the cooling off period and you will need to provide a 66W certificate
- Try to include reasons for your offer amount. Include comparable property sales results and any issues arising from your due diligence.
- When you make an offer on a property that is competitively sought after, it is advisable to keep the conditions of the offer as simple and uncomplicated as possible.
3. Minimise the conditions of your offer
An offer that includes a signed contract and deposit cheque is likely be be far more attractive. An offer without any special conditions or cooling off period is also likely to fare better than an offer with preconditions and delays. Sometimes vendors will accept a slightly reduced price for the certainty of an unconditional contract.
Be prepared to negotiate but keep your limits clearly in mind.
4. Do not delay if your offer is accepted!
If your offer is accepted, you should ensure that exchange occurs as quickly as possible. Maintain regular lines of communication through to exchange of contracts. This will help to minimise the risks of the property being sold to another buyer (gazumping).
Homesearch Solutions can assist you make an offer on a property. Please contact us for further details by emailing Henry or phoning 0409 105 015. We offer a Negotiation service as well as a range of other services for buyers including our Property Search Service, Property Appraisal Reports and Auction Bidding.
You can see our buyers agent fees here.