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Purchasing a property can be a daunting undertaking and requires hours of research and due diligence. If you think you have found the perfect property and you’ve conducted all the necessary homework, it is wise to first have pre-approval for your finance in place to ensure your offer is more enticing to the seller. Prospective buyers will often skip this step in the process and make an offer on a property before their finance has been approved. However, in the event they are unable to obtain finance approval, their offer will lapse, resulting in a lose-lose situation for both buyer and seller. Pre-approvals not only reassure the seller, but will provide a guide as to how much money you have to work with, allowing you to source properties that are well within your price range and realistically narrow down your choices.
The key to making a successful offer on a property is tailoring it to suit different selling methods, which comprise of a private treaty, auction or tender, among others. Here are my top tips to making an offer on a property and what you should keep in mind regarding different selling methods.
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Be prepared to negotiate. Negotiating the property price is crucial to secure a worthwhile deal. This is particularly important during private treaty house sales, as sellers are prepared and more likely to consider an offer that is below their asking price. In private treaty sales, the agent and seller determine a sales price and will often list the property at a higher price, with the expectation that they will receive lower offers. Your negotiations will also be more successful if you have pre-approved finance, as you will be able to make an unconditional offer on it.
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Offer your best price upfront. If you have found a property you are interested in placing an offer on, put your best price forward from the get-go, but set a short deadline on the offer for acceptance. This is crucial when purchasing a house through a tender sale, which is similar to a silent auction, whereby a seller receives offers from potential buyers by a specific date. However, prospective buyers are not aware of competing offers. In these situations, your best offer can help you avoid being outbid by another buyer. It is also important to note that offers in a tender sale will not be accepted before the closing date.
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Seek out a professional to assist with your offer. Use the services of a lawyer or conveyancer to help you include the correct terms and conditions within your offer. This will ultimately protect you and can make your offer more attractive to the vendor. Prior to auction, agents are likely to provide a contract, and engaging with a lawyer to check over and negotiate this contract on your behalf is important. Consulting with a professional can also help you determine the most appropriate offer to make, giving you added peace of mind. It is important to remember that regardless of the method used to sell a property, once you make an offer and the seller accepts, it becomes a legally binding contract.
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Attend the first open for inspection. There is power in knowledge and conducting extensive research before putting an offer on a house is vital. Take the time to research market prices to find a reasonably priced property in the areas you are considering purchasing in and, be vigilant in attending the first open for inspection on any houses that interest you. This is a necessary step before making an offer because you will be able to scope out other interested buyers.
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Be swift with your offer. If you think you have found the right house for you, after thorough research and inspections of the property, it is wise to put an offer in quickly. Being swift with your offer also applies to auctions. If you have your heart set on a property and want to avoid the stress of the bidding process, you will have the opportunity to make an offer for the seller to consider the day before the auction. Whether you’ve chosen to purchase a property through private treaty, tender or auction, consider making your offer subject to a satisfactory building and pest inspection for added protection.
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Be wary of submitting multiple offers on multiple properties. It is not always wise to put all your eggs in one basket. Submitting multiple offers on a house can help you to secure a property more easily. This is because you will be providing the seller with more than one option, under different terms and conditions, one of which they are likely to be drawn towards. It also shows that you are willing to work with them. For example, you can put in one offer that includes a higher price with a shorter settlement date and another, lower-priced offer with an extended settlement date. However, be wary of submitting multiple offers on different houses. You can run the risk of your offer being accepted unconditionally and can face hefty penalties should you be unable to commit to the sale.
About Dominique Grubisa
DG Institute CEO and founder Dominique Grubisa has 25 years’ experience as a practising lawyer, debt management specialist and wealth management educator. She founded DG Institute in 2009, and is an experienced property investor, developer and entrepreneur. Dominique is also a seasoned speaker and media commentator who has provided commentary for major outlets including Sky News, news.com.au, Yahoo Finance, and Sydney Morning Herald. Dominque is a two-time winner of the ‘Female Entrepreneur of the Year in Asia, Australia or New Zealand’ Stevie Award in 2018 and 2019, and was a ‘Businesswoman of the Year’ finalist in the MyBusiness 2019 Awards. For more information about DG Institute, visit dginstitute.com.au.
