When you’re ready to buy a property, the offer you put forward is one of the most important actions of the purchase process. If you make an offer that’s too low, you may lose the property completely. If you make an offer that’s too high, you may end up spending more money than necessary.
Your goal should be to compile the offer so you get the best deal possible. To achieve this, the major point to remember is that a great offer has many more components than just the price, though this is a great place to start.
The first step in making a successful offer on a property is to be smart about your research. You should look at comparable properties in the area and see what they have sold for recently. Review the range of properties on the market, and take note of the reasons why some are priced higher than others.
This will give you an idea of what the property is worth and how much you should be willing to pay for it.
In many cases, real estate agents will give you a price guide however it’s important to know agents will guide at the lower end of the seller’s price expectations to ensure they attract interest in the property. Determining the price of a property can be a challenge so if you really want to jump ahead of your competition, take a look at our Buyer Success Pack which covers how to pinpoint your property price.
The next step in preparing your offer is to consider aspects that will influence the components of the offer. There’s a wide range of influences that should be considered. These include the economic environment (is the market running fast or slow), the seller’s situation, the agent’s style, infrastructure changes (eg is a new development planned for construction soon), and key dates or deadlines like the end of the financial year, school or Christmas holidays. Gather the facts together as these should influence the components of your offer.
When you’re sure you want to move forward with an offer, request a copy of the contract. In most Australian States and Territories, the contract will contain essential information that will determine the potential of the property. Ideally, have your solicitor read through the details and conduct relevant searches to ensure you won’t have any nasty surprises if you’re successful with the purchase.
Compile your offer
Next, use the information you have collected to compile your offer. At a bare minimum this should include the following items.
• Duration of the cooling period.
• Indicate whether the offer will be subject to successful finance approval, and successful building + pest inspections.
• The amount of deposit.
• Settlement duration – ie – how many weeks between exchange and the date the property becomes yours.
Once you have the basics in place, the way to really amp up your offer is to use ‘special conditions’ to make your offer really stand out. This is where you can be very tailored – for example letting the seller take a coveted component of the property, or include an extra enticement such as covering their removalist costs.
If you’ve been looking at property for even just a short while, you will know buying successfully is not as straight forward as it seems. If you want a streamlined, step by step process to buying property through direct offer, check out our ‘How to buy a property through direct offer’ component of our popular Buyer Success Pack – click here for details.
About the author
Debra Beck-Mewing is the Editor of the Property Portfolio Magazine and CEO of The Property Frontline. She has more than 20 years’ experience in buying property Australia-wide and has extensive experience in helping buyers use a range of strategies including renovating, granny flats, sub-division and development. Debra is a skilled property strategist, and a master in identifying tailored opportunities, homes and sourcing properties that have multiple uses. She is a Qualified Property Investment Advisor, licensed real estate agent and also holds a Bachelor of Commerce and Master of Business. As a passionate advocate for increasing transparency in the property and wealth industries, Debra is a popular speaker on these topics. She is also an author, podcast host, and participates on numerous committees including the Property Owners’ Association.
Follow us on facebook.com/ThePropertyFrontline for regular updates, or book in for a strategy session to discuss your property questions.
Disclaimer – This information is of a general nature only and does not constitute professional advice. We strongly recommend you seek your own professional advice in relation to your particular circumstances.