Whether you’ve bought and sold a property before or this is your first foray into dealing with a property purchase, the fact remains that it can be a nerve-wracking experience.
With significant amounts of paperwork, finance, nuanced negotiations, formal checks and more to manage, it’s easy to see why many view it as overwhelming. One of the best ways to navigate the process of making an offer on a house is to familiarise yourself with it first and ensure you are well-organised.
In this guide, we will discuss our top tips for making an offer on a house and how to enjoy a stress-free, streamlined experience from start to finish.
Making An Offer – What Does It Mean?
Just as it sounds, making an offer either verbally or in writing is the formal step of telling the selling agent what you are willing to pay for a property and waiting for them to inform the vendor (seller).
It is best to always make a written offer over a verbal one as this is taken more seriously. This can be as simple as sending your offer via email, however, the agent will advise you on their preferred practice.
Are There Formal Rules For Making An Offer?
While there is legislation in place regarding the way in which offers are handled by agents and expectations regarding transparency, there is no set process for making an offer. As mentioned above, the selling agent will advise regarding their expectations and whether a verbal or written offer is preferred.
How to Make An Offer On A House
To give yourself the best chance of securing your dream home, particularly in a highly competitive market, it pays to be prepared. Here is an outline of everything you need to do or should have in place prior to making an offer and following your offer being accepted.
There is little to be gained in avoiding a bank or mortgage broker until you have found your preferred property. Seeking pre-approval of an amount prior to beginning your search can help you avoid disappointment and guide you to homes that are within your price range.
Keep in mind that pre-approval is not a guarantee of funds and there will be additional steps required by a bank or financial institution before you can access them. This will include additional paperwork as well as having a valuer attend to the property in question to ensure they agree on the amount being borrowed.
Engage A Solicitor Or Conveyancer
You should always have the contract of sale read over by an experienced professional such as a solicitor or conveyancer. Be sure to check that your expert has the time to review your contract in a quick and timely manner, you will usually need this done within 24 hours of making an offer.
The reason you have your contract reviewed is to ensure there is nothing unusual in the terms of the sale and that you are making an informed decision.
Do Your Research
Before you make an offer, it is important to be aware of recent, comparable property sales in the area. This can help you to ensure your offer is neither over nor under-inflated. While we understand how easy it is to make an offer out of love for property, this should not cloud your judgement as this can see you pay much more than necessary.
Just as equally, trying to pay less than a fair market value could see you lose the property altogether or have your offer swiftly rejected.
Attend The First Open
While this may not always be possible, attending the very first open home for a property can quickly indicate how much interest there is in the property. If people are lining up around the block, you will quickly see how competitive you’ll need to be should you decide to make an offer.
Likewise, an open home with minimal interest could help you save money as it indicates the property has fewer interested parties. This is not always the case though, so proceed with caution.
Determine Your Offer And Any Conditions
If you wish to make an offer subject to conditions such as financial approval, settlement terms or a building and pest inspection, be sure to make this clear to the vendor. While most vendors will opt for an offer with fewer conditions and the best price, it is still possible to negotiate.
Make sure you are comfortable with the amount you offer and be clear with yourself about where you will draw the line. Buying a home can be exciting and it is easy to get caught up in it all, preparing yourself in advance for what you are willing to pay and what conditions you require can help you avoid trouble later on.
Get In Early
‘The early bird catches the worm’ is a cliché that can easily be applied to real estate. While you may be tempted to wait and see what happens following a quiet first inspection, this is not always a great strategy.
Offering a fair price early on could see the buyer quickly accept and you won’t be battling the competition. Waiting too long can see more interested parties emerge and cause the buyer to hold out for more.
Offer Your Best Price
Put your best foot forward and don’t play games, particularly if you really want the property.
Giving a genuine offer from the outset is one of the best strategies that can help you to achieve your home ownership goals and offering an unfairly low offer is not going to win over a vendor.
If you’ve been searching for months or years for your ideal property, don’t risk losing it simply to save a few thousand dollars.
Pay The Deposit
Once your offer is accepted, you’ll be required to pay a 10% holding deposit, which is held in the Real Estates trust account. This does not guarantee your purchase however and will be returned to you in the event the offer is later rejected or you pull out of the sale due to the results of a pest and building inspection or other conditions not being met.
In the case of financial issues, you may need to ask for more time to negotiate, however, this risks you losing the deposit or facing financial penalties.
Vendor Signs The Contract
Once the deposit is paid, any conditions have been met and the vendor signs the contract, you’re officially on your way to moving in.
Now you’ll hand over to your solicitor or conveyancer to process the legal paperwork and organise the final transfer of funds at settlement.
Knowing How Much To Offer
The agent selling the home is the best indicator when it comes to understanding how much the vendor is hoping to sell for. However, this does not mean you have to offer this amount.
Should you wish to offer below their listed price or indication given by the agent, you’ll need to give reasons why for it to be genuinely considered. If it is due to visible damage or problems with the house, state this as part of your offer.
If you have seen similar properties in the area selling for less, show this proof to the agent also – this demonstrates you have done your research and gives credence to your offer.
What Happens If I Change My Mind?
Are you having second thoughts and want to withdraw your offer? If you have paid a deposit, but no contracts have been signed, it may be possible to do this without any penalties being applied.
If a deposit has been paid, contracts have been signed by both yourself and the vendor and the cooling-off period has finished, things become significantly more complicated.
If you find yourself in the latter situation, it is best to speak with your solicitor or conveyancer as well as the agent as quickly as possible to find a resolution. Be prepared for the fact that you may well lose your deposit and possibly incur other penalties.
How We Can Help
At Complete Conveyancing Solutions, we offer a tailored professional service designed to keep your home buying experience an enjoyable one free of complications. With a focus on transparency, we guide our clients through every step of the buying and selling process, keeping them informed and up-to-date at all times.
We understand the complexities and emotions that are so often involved with making a property purchase and do our utmost to keep stress to a minimum. With over 20 years of experience conveyancing across Victoria, we have seen and done it all. From straightforward settlements to complex negotiations and contracts, we have the skills and expertise to handle every situation with ease.
We are passionate about delivering a boutique, one-on-one service that goes above and beyond. It is this dedicated approach that has seen so many of our clients return to us again and again. To experience the Complete Conveyancing Solutions difference, contact our team today at 03 5787 2250