Making an offer on a property – where to start

Amid the coronavirus restrictions around social distancing, property buyers will now need to make an offer privately to purchase a home.

Some say making an offer on a property is similar to playing a game of chess – each party waiting to see what move the other party is going to make.

What is the process?

The process of making an offer on a property can vary from state to state. For some areas, the first offer can be verbal, for others, it is written. Make sure you’re across the rules and how the process works before you start.

It’s often best to make the offer in writing to the agent – this eliminates any confusion concerning what the offer and conditions were.

The negotiation process begins when you first meet an agent. They will likely ask a number of questions to understand your situation and formulate an idea of what your needs and your budget are.

Before getting to the offer, this relationship with the agent might consist of a number of phone calls, second and third visits to the property.

During this process and before you make an offer remember the following:

• Have a clear understanding of the process. Ask the agent to explain how they intend to take offers on the property, then check with your solicitor to ensure they are happy with this. It’s a good idea to seek advice from your bank or financial adviser to ensure you can meet any terms.
• Know what price you want to pay for the property and work out your strategy to accomplish this. Remember that this is a negotiation so go into it knowing what the maximum price you’re willing to pay is.
• Research the property fully and ensure you’ve satisfied all your requirements.
• Have an understanding of the vendor’s motivation to sell, their preferred settlement date and any other information that may make your offer stronger.
• Remember to be patient. Some property offers can take a while and they can be stressful. Don’t rush offers if you don’t need to and consider putting a time limit on any offers you do make.

Should I get a valuation?

It can be a good idea to get a registered valuation on the property if there are not enough comparable properties to make an estimated guess.

Although this is generally done as part of the loan process, your negotiations would have already taken place.

If you want to get your offer on the table, you can always add a condition that it is subject to a valuation. However, the vendor might not accept this condition and you might miss out on the property.

If you are thinking about getting a valuation as part of the offer process, check with your lender to enquire which valuers they use to make sure it can be accepted as part of the loan application – you don’t want to pay twice.

Do your research

One of the biggest mistakes buyers often make is not researching the property fully before making an offer.

Speak to the agent to get an idea of the vendor’s asking price.

Study other comparable properties that have sold in the area recently, which will help you determine how much you think the property is worth and make an informed offer. Realestate.com.au’s Track My Property tool provides price estimates for properties across Australia.

If you’re interested in a property that is going to auction, ask the agent if the vendor is considering pre-auction offers.

Be upfront if you’re interested in the property. You don’t have to give an agent your life’s history but enough information for them to know to contact you and keep you in the loop if there is movement on the property.

*Making an offer on a property – where to start was written by Charlotte Cossar and published on Realestate.com.au