Okay, you've done your online property hunt, you've completed your property walkthrough and you love what you see, the next step is to put in an offer...
...but where to start, what's the right price to put on the table and how much interest should you show?
This is one of the biggest purchases you will make and getting the initial offer proceedings right will help you move forward with confidence, knowing you are not starting above the value point.
Making a private offer to purchase a home is one of the new quirks of buying a property during coronavirus restrictions. Getting your head around the offer process is something you need to put on your essential property purchase to-do list. Even as restrictions ease, you never know how the tables might turn in the shaky first steps forward and which properties might choose to go ahead with online offers, even after the COVID-19 pandemic is all but over.
You obviously want to go into a property buy knowing what you are doing. Knowing just how much wiggle room you have in that property value bracket can give you confidence on knowing that you are putting forward a strong, but fair offer.
One nice silver lining with making an offer on a property is you have to switch on your patience and go slowly, waiting for the other party to respond before you can adjust your strategy and get your next move organised. So many people bring too much emotion into a property purchase and rush to win, this forced slow down might be agonising but it does you a favour in terms of forcing you to take your time, consider all your options and cool off after putting a price on the table.
How will my offer be submitted?
The rules for how to submit your office will vary so it's important to start by following the instructions given to you, to the letter. That's step one in your game of patience. Usually, offers are received either verbally or in writing. Whatever the case in your state it's important to get a submission outline from your agent and check with your conveyancer that everything requested is above board and legal.
Above all, take your time, do your homework and set aside time to think and present your offer professionally, as it is requested.
When should you make an offer?
After you have seen the property in person, spoken to the agent in detail about your interest and the property history, completed the background checks you can start to accurately formulate your offer price. Most people view a property several times, initially they will do a general check to see that the property is actually as listed and matches the photographs as well as meets requirements. With that box checked, it's still important to return for more thorough checks as well as to get a feel for the neighbourhood at different times of day and week.
Who do I make the offer to?
You are best to place your offer directly to the agent and give yourself adequate time between viewing the property and making the submission. It's best to let your agent know you are interested in making the offer so they can give you the guidelines on their expectations and terms. Make an appointment to do this no matter if it is verbal or in writing and be sure to take the time to go through the conditions with the agent to clarify any issues or terms.
Should I stealth in at the last minute?
There is no advantage to being secretive about your intention to buy. The best way to proceed is to be upfront in your interest from the start and get to know the agent well. You must provide the agent with the details they need to contact you and let you know if there are any updates or changes to the situation.
Who needs to know you will be making an offer?
It's best practice to play an open hand and let all the parties involved in your purchase know you intend to make an offer. This way you can be sure to meet all the terms from all points of interest.
-The real estate agent
-Your lending bank
You should be seeking advice from these experts on what to do and let them know what the submission terms are ahead of time so any bumps in the road can be addressed before you set things in motion.
Know your stopping point
Once you make an offer you can expect counter offers and ongoing negotiations until a suitable medium can be reached. This can go on for a while and you may feel a lot of pressure to go above your preplanned price. You need to know with absolute certainty what your maximum price is and stick to it.
What to take into account when making your offer
There are some things that a seller (through the agent) must disclose so you want to be sure you have covered all these points (LINK TO PREVIOUS BLOG: )
One of these key elements is knowing the motivation for the property sale, including the proposed settlement period. If you can match their urgency for a fast sale or be ready to stretch things out for a slow sale you can create a stronger position for yourself.
In most cases, the expected selling bracket is included with the property listing. At the very least you will have had enough in-depth conversation with the real estate agent for the expected sale price to have been conveyed to you at this point in time. If you disagree with the price proposed you're best to discuss your concerns with the agent as well as your bank.
A purchase this size needs to be backed up with research so do whatever you can to get an idea of local property prices to know what a fair asking price should be.
Rather than get frustrated by the slow back-and-forth process of a private offer on a home, embracing the conditions are giving you every opportunity to get your best price and think your buying decision over with care and consideration, it might just be the best thing that happened to you.
If you have any doubts or need any clarification your conveyancer will be able to help clear up the process for you.