After scouring the property market and stalking every last inch of REA and Domain, finding the house of your dreams and wanting to put in an offer is an exciting time in your life, and for most, not a decision to be taken lightly.
It’s important to understand the process of making an offer which allows you to hopefully achieve the best possible outcome in securing your dream home, or investment property.
1 – Understand the conditions of sale:
Before you write the offer, it’s important to understand from the Selling Agent, how they will be receiving offers on the property. At times, a seller may have conditions attached to it, but it’s usually the buyer that will attach these, with common things such as being subject to finance, subject to sale, or subject to a building and pest inspection.
Generally speaking, it’s more attractive to write an offer with less conditions attached, as it can put you in a better negotiating position.
2 – Do you market research on the neighbourhood and value of the property:
Before writing the offer, it’s helpful to understand the general market value in the surrounds of the property you’re looking to purchase, as this can sometimes determine on-sell value later on. The best way to do this is by conducting your own comparative market analysis, by looking at properties that have sold in the area in the last 6 months, matching the age, quality and attributes (if possible) of the property you’re looking at purchasing.
This can help you determine what a realistic price to pay for the property is, and an overall strategy for accomplishing this price.
Agent’s will also generally inform you of a rough price guide for the property prior to you putting in an offer in any case, but it’s helpful to understand the market conditions of the area anyway.
For those looking to purchase investment properties, take this opportunity to assess the current rental yields in the area.
3 – Understand the vendor’s motivation to sell
Every vendor has a different reason, and this can impact the conditions they attach to the sale, along with the price they’d look to accept.
Price isn’t always absolutely everything when it comes to a seller’s motivation to sell. In some cases, a vendor may be more motivated to accept an offer with a longer settlement period. Talking with the agent to try and understand their motivations behind selling can help you present an offer that’s more catered to their wants, making your offer more appealing.
4 – Line up your finance
If a seller accepts your offer, chances are you’ll need to move fairly quickly. Generally speaking, it’s important to gain conditional approval from your lender before making any formal offer.
5 – Decide on a price
The price you decide on will be determined by the range of factors considered in the earlier steps: the price of similar properties in the same suburb, the seller’s motivation, your budget, and overall desire to have the property etc.
Once you’ve decided on this amount, it’s time to sign seal and deliver it in writing, and present it to the agent.
6 – Indicate your interest to the agent
But wait! Before you submit this offer, make your interest known to the agent. Many people can make the mistake of holding their cards too close to their chest, and before they know it someone else has snapped up the property and it’s under contract.
Letting the sales agent know that you have a strong interest in the home, could also allow you to gain an understanding of whether any other formal offers have been made, and the terms and conditions required to make your offer more competitive.
7 – Make the offer
Any offer you make, should be stated in writing, including the price you’re willing to pay along with any conditions attached.
This offer is then put to the seller who can opt to accept or reject. If they accept, the contract of sale is drawn up, which both parties sign, and the property is then put under contract until the relevant conditions are met, before the property officially changes hands, and it’s all yours!
Offers can be made on a property in any type of property sale. This means you can make a formal offer on a property before an auction, as part of a tender process or in the instance of a private sale.
Looking to buy or sell your home?
Our expert negotiators are rearing and ready to help you. Give us a call today on 08 6168 7471. You can also view our current gallery of houses ready for you to call home here.