Making an offer on your dream home can be a daunting task. There’s paperwork and finances to get in order, negotiations to keep track of, and what to do after your offer is accepted.
Putting in an offer on the home you want, whether before auction or for a private sale, is a similar process.
All you have to do is contact the agent and let them know what you’re willing to pay (and make sure you’re researching similar properties on the market beforehand). You can also formalise the offer in writing.
There’s a subtle art to making an offer. You’ve got to be thoughtful, strategic, and timely.
Here are some tips to give your offer the best chance of being accepted.
Buying a house by making an offer is usually less stressful than bidding at auction. Picture: Getty
Jellis Craig Doncaster director Andrew Keleher says if you’re considering making an offer on a property, it pays to show up to the first open for inspection so you can gauge the level of interest.
If the open for inspection is poorly attended and the property is slated for an auction, a vendor may be more likely to consider an early offer.
“If you’re at an open house and there’s lots of buyers asking for copies of contracts and asking, ‘Will you accept offers prior to auction’, then you can start to get a bit of a feel of whether or not it’s going to be a strong campaign,” Keleher says.
If you see that there aren’t many potential buyers at the first open for inspection, the inclination might be to wait a while before putting your offer in, in the hope that the vendor becomes desperate and may accept a lower price.
But Keleher says that strategy often backfires, as it allows time for other buyers to emerge.
“Often what happens is over the four-week program we meet a new buyer and second and a third buyer, and there’s new competition that there may not have been if they had have put their best foot forward.”
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.
Get into the market: estimate your borrowing power
“If I’m buying a property, I’d want an answer (from the vendor) generally within 48 hours. I want to put pressure on the vendor to make a decision that’s fair, but I also want to put my cards on the table and not hold back,” Keleher says.
“The longer it takes, the more time you give other buyers a chance to reconsider their position or to finalise getting their finance approved or having a chance to get a builder through.”
Consider: Getting a property valuation during the negotiation process.
Selling a home can be arduous, so vendors often look for the path of lease resistance when it comes to negotiating a deal.
This means that if your offer has conditions attached to it – the most common being that the offer is subject to finance being approved – it will hold less appeal.
“I had a client … and he’d offered $1.7 million but he was subject to finance. He was very confident that the finance would be approved, but then somebody matched his offer unconditionally and the vendor went with the offer, and he was very upset,” Keleher says.
“We’ve often had vendors accept offers that are lower and unconditional, rather than go with an offer that is higher but with conditions.”
Most buyers who make an offer on a home are doing so either because they want to snuff out the competition, or because they’re hoping for a bargain.
But Keleher suggests that offering low rarely yields results.
“Don’t play games with the agent. The people that are most upfront with us are the ones who are generally going to be treated as the most genuine buyers.
“If you want to buy a home, don’t look at it that you have to buy at the cheapest possible price. Take the attitude that if it’s a home you love and you have stretch yourself a bit beyond what you want to, do it, because it could take you six months to find the same home again.”
“Don’t hold back and say, ‘Look, on auction day we will pay $50,000 more but for the purpose of this offer I want to offer low’, because of course an owner isn’t going to consider it.”
Remember: Keep your emotions in check when you put an offer in on your ‘dream home’.