Making an offer on your dream property can be daunting. So we’re here to take you through the process, from start to finish, in order to give you the confidence you need.
Putting forward an offer to buy a home isn’t as simple as writing down a number. You need to do your research, read your contract and make sure your budget is airtight before taking the plunge. If you’re feeling a little daunted, here’s a good place to start.
Step 1: Your own research
A reasonable offer will be grounded in your own research of comparable sales in the area.
Look to sold prices of other similar properties in the area to ground your research before making an offer. Picture: realestate.com.au/buy
Frank Valentic, owner of Advantage Property Consulting and buyer’s agent on The Block says price comparisons are always the best place to start when considering making an offer on a property.
Valentic also recommends contacting the owner’s corporation, if buying an apartment, as well as the local council to determine if any surrounding development will affect the future value of your property.
Step 2: Legal review
“You should always have your conveyancer review the contract of sale documentation,” Valentic warns.
Why? It’s your conveyancer’s role to go through the document with a fine tooth comb, checking the title and ensuring it is clear of any caveats, and to see if it has any restrictions you need to be aware of such as easements, heritage overlay or single dwelling covenants.
“Your conveyancer should also check if there are any outstanding monies against the property which will become your responsibility at settlement, and what the outgoings are. Also, there may be bodies or parties who have a vested interest or claim to the property such as government roads organisations or telephone companies,” Valentic says.
Step 3: Building inspection
A building inspector will be able to conduct a thorough check of the property. Picture: realestate.com.au/buy
A building inspection is a vital step to precede making an offer on a property, to ensure the structure is sound and stable before you part with any cash.
Even if the building is structurally sound at the time of purchase, a building inspection may also reveal big costs for hidden repair issues down the track that you need to be aware of going into the sale in order to negotiate a discounted offer.
Step 4: Pre-approval
Pre-approval will confirm your lending capacity based on the information you provide about your financial situation, and help you determine what your limit actually is when negotiating the final price you’re prepared to offer.
Ensure you have all your financial ducks in a row before seeking pre-approval. Picture: Getty
Your bank can assist you with the pre-approval process, which will involve working with you to assess your financial situation to give you a realistic picture of how much you can borrow.
They will weigh up information you give them like: what you owe, how much you own, what you earn and your general living costs.
Step 5: Make an offer!
After checking off all of the above, you’ll be held in good stead to make your offer!
Valentic says you should always put your offer on a contract, preferably with a deposit cheque attached, to show you are serious. His tips for negotiating that golden price?
“Start under where you are prepared to go and put a longer settlement than desired to give yourself somewhere to negotiate from,” he offers.
“Always put a deadline on your offer and make your offer an uneven figure, for example, $571,000, to support the idea that you have pushed yourself to your absolute limits.”
Happy negotiating.
This article is prepared by realestate.com.au in partnership with ING Bank (Australia) Limited ABN 24 000 893 292 (‘ING’). The information in this section is of a general nature only and does not consider your personal objectives, financial situation or particular needs. Where indicated, third parties have written and supplied the content and ING is not responsible for it. ING makes no warranty as to the accuracy, completeness or reliability of the information, nor do we accept any liability or responsibility arising in any way from omissions or errors contained in the content. ING recommends that you obtain independent advice before you act on the content. Realestate.com.au uses ING’s trademarks under arrangement with ING.
This article was originally published on
4 Oct 2018 at 4:22pm
but has been regularly updated to keep the information current.