Buying a house or residential property, no matter how experienced or inexperienced you are is equal parts exciting and daunting. It is most likely the largest financial purchase you will make in your lifetime and requires you to be on the ball and ready for anything.
There’s lots of legal paperwork and finances to get in order to enter the property market, negotiations to keep track of, and what to do after your offer is accepted. Not to mention the emotional output that you need to control.
Many houses go to auction, but at the moment there is a lot of competition in the market which means that many buyers are keen to put an offer in ahead of auction if there is one scheduled.
Putting in an offer on the home you want, whether before an auction or for a private sale, is something that you may wish to do, both scenarios have a similar process surrounding it.
Many prospective buyers make the mistake of not showing their interest in the property until too late, making an offer can put you ahead of the standard buying process.
If you choose to make an offer on a home, it needs to be done in a formal manner.
You need to write an official letter offering to buy the property. This will then be sent to the seller.
An oral agreement of offer can be made either in-person or by telephone but due to the verbal nature of this offer it is not considered as serious as a written agreement.
Depending on the vendor and agent’s preferences, the offer may take the shape of an email, a signed document, or a formalised agreement as initiated by the vendor.
You’ve found your dream home and want to make an offer — what’s next?
Anyone looking to buy a home knows that the auction process can be stressful. Luckily, if you’re looking to avoid buying under the hammer, you can put forward an offer on the home you want, just as you would through a private sale.
So if you’re serious about making an offer here are our steps to proceed to get the optimum contract of sale conditions:
1. Get Pre-Approval of your finance
2. Understand the section 32 and the contract.
3. Make the offer, decide on the offer and the conditions surrounding the offer
4. Attend an Open for Inspection
5. Inspect the property thoroughly and know the property as well as you can
6. Make the offer in a timely fashion – show your intention
7. Offer your best price
8. Negotiate and Understand the negotiation process
9. Vendor Response
10. Can I withdraw an offer
Make the process simple. Get your finance pre-approved so you know exactly what resources you’re working with, and you don’t waste anyone’s time.
Before you can make an offer, you must know your limits. Buying a house involves calculating how much you want to pay for one.
A pre-approval is a useful tool for determining whether or not a bank is likely to approve you for the mortgage sought.
Contrary to what you may believe, however, pre-approved is not a contract and it doesn’t become one until you fulfill all the lender’s requirements.
Select Legal is available to you to be engaged to ensure all of the legal documentation is in order.
Having a Select Legal available to read over contracts is a must. Once your pre-approval is approved (or you’ve decided you don’t need it) it’s time to engage Select Legal who will quickly and efficiently read over a the section 32 and the contract, to determine if the contract meets requirements as set by the Victorian legislations.
Select Legal will do this in a timely fashion as typically you’ll need a contract read within 24 hours.
The process of making an offer actually quite simple. First, you should find out how much houses cost in your area. Then, you should contact a realtor who will help you find a home that fits your budget. Finally, you should negotiate with the sellers until you reach an agreement. You can do this through a phone call, written communication, or even in person.
It’s not the actual act of offering that sets you apart from your competitors; rather, it’s the preparation leading up to the sale. You need to be knowledgeable about your finances, understand the suburb conditions, scope out the property, and research the market before you start selling.
Attending an open for inspection for a property is extremely important. It allows you to gauge the level of interest as well as assess the quality of the home.
it pays to show up to the first open for inspection as if there are a lot of people, check to see how many are asking for copies of contracts or asking about early offers. This should tell you what competition you’re up against and you can set your offer accordingly.
If the open for inspection is poorly attended and the property is up for auction, a vendor may be more likely to consider an early offer.
If you are unable to attend the first open house, always ask the real estate agents how many people have shown an interest and what their level of interest was. Showing interest by asking questions is a great way of letting them know you’re serious, which might be enough to get you into the next open house.
Home inspections can be daunting, if the home is brand new it will be covered by a building warranty, but older homes do not.
You can do your own Home inspections by downloading a Home Inspection Checklist and following same, or you can employ and get advice from a professional property inspector, who may also be a builder, to make sure they’re comfortable with the structure of the property. Alternatively you may know a competent trades person that you can get advice from.
A professional property inspector will provide you with a written report with all the items they’ve looked at, which will also be given to the agent upon request. Anything in need of repair will come under either a major structural defect or a minor structural defect. You should also get a pest inspection done in conjunction with the property inspection.
Major structural defects mean the property has not passed the inspection, while minor defects are allowable within the contract.
If you feel that interest in the property is low, it’s tempting to delay putting in an offer in a bid to make the seller desperate. However, your best bet is to get in early and confidently, and set the seller a quick deadline to get back to you. This puts you in an ideal place to negotiate. A reasonable response period to set would be about 48 hours, this gives the seller time to decide but limits other buyers from getting in before you.
Don’t be afraid to turn up the heat on the vendor by putting your best offer out there early in the campaign, and asking for a quick answer, as it will put you in the best position to negotiate.
As a potential buyer and a ‘real’ buyer, you should absolutely refrain from “playing games” with the real estate agent as it erodes trust.
Real estate agents do this every day, they’d rather deal with upfront buyers than people trying to pull the wool over their client’s eyes. They know that most buyers who make an offer on a home prior to auction are doing so either because they want to snuff out the competition, or because they’re hoping for a bargain.
You need to take the attitude that if it’s a home you love you may have to stretch yourself a bit beyond what you want to, do it, because you may not find another home like it.
Don’t hold back until the auction, as the owner WILL consider all offers.
You might think that the highest offer will always win but it’s not the case. A good offer, in the eyes of a vendor, is a mixture of the price as well as the conditions attached to it. Fewer conditions on the sale contract make a more attractive offer, but price is obviously a huge bargaining chip.
Some offers will have both conditions on the contract of sale attached and some offers will have no conditions, this is what’s called an unconditional offer.
While every vendor dreams of getting a high price with unconditional offer the reality is that many houses aren’t perfect and buyers don’t often have endless supplies of cash.
If you are a potential buyer and you’re putting in an offer, there is a high expectation of negotiation, until the purchase price has been agreed upon. You’ll probably be negotiating the house price against other buyers, so whether you’re dealing directly with the seller or via an agent, you want your offer to stand out.
Remember, your main priority is to make it easy for the seller. Do some research and learn about the seller’s situation. If they’ve already purchased another home, offer a settlement date that lets them avoid bridging finance or finding temporary accommodation between settlements.
If a counter-offer is provided by the vendor, the two parties may engage in a bartering process in an attempt to reach a sale price and agreement they’re both happy with.
Once the vendor accepts an offer of the agreed purchase price, then there are still some hoops to jump through.
There’s a set period of days during which you must meet any conditions you’ve attached to the sale.
It usually takes a few days for bank approvals and building inspections to be completed.
When the deadline has passed and the conditions are met, the deal is final. If they don’t meet the conditions, then it’s best to renegotiate or ask for more.
If the home hasn’t passed the building inspection then you can consider whether you’re comfortable with the state of the home and potentially lower the offer to cover the cost of repairs.
If the finance hasn’t been approved then you’ll need to ask for more time (which can result in financial penalties) or risk losing the deposit.
Once this is all finalised, then you are the owner of the home.
Once a contract has been signed by both parties, a deposit has been paid and the relevant cooling off period is served (if applicable) it’s difficult to withdraw an offer without being penalised.
If you change your mind at any point before the contract has been signed by yourself and the vendor then normally you won’t incur penalties.
If you do change your mind it’s best to speak with your legal expert and the agent as quickly as possible.
Regardless of whether you are planning to buy or sell a property, Select Legal is ready to assist with the conveyancing process.
The advantage of engaging Select Legal is that all your conveyancing needs are met, whether they be standard or extremely complex, where our solicitors can attend to additional legal work required which includes drafting special conditions, drafting agreements such as a licence agreement or lease, letters resolving disputes etc depending on the requirements of each matter.
Our knowledge of the process and attentive service (as shown in our Google Review history) is what sets us apart from others in this field. Depending on the needs you have, Select Legal is ideally qualified to handle your transaction and ensure your purchase or sale goes through all the required legal checkmarks.
We also have the expertise to perform electronic conveyancing using the Property Exchange Australia (PEXA) digital property network.
Contact Select Legal today for all your conveyancing needs or request a quote which will only a few minutes.
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