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  • 5 things to consider before making an offer

    5 things to consider before making an offer

    As a real estate agent, I enjoy the satisfaction where both the vendor and the buyer are happy with the sale and the property takes on a new lease of life with the new owner.

    It is the job of the agent to represent the seller’s interest in the property and give every buyer the best chance to secure the property at a fair price and on terms that are acceptable to the vendor.

    As a buyer, before making an offer, there are several things that you need to ensure so that the agent can best represent your interests and give you the best chance to make that offer successful.

    To be effective, an offer should be submitted: 

    • Unconditional
    • In writing and signed  
    • Accompanied by a cheque for an amount recommended by the vendor’s agent.   

    You should also advise that the offer is only valid for 24 hours or with in a certain time frame.

    Before submitting an offer, it is recommended that you undertake the following checklist:

    1.  Understand the Contract

    It is the buyer’s responsibility to understand the contract in full. Don’t rely on the agent as they are not able to provide you with any comment on the accuracy of any information contained within the Contract of Sale.

    No matter how experienced you are as a buyer, you should engage the services of a specialist property lawyer or conveyancer. 

    These people will be able to check and explain each section of this important document, including the impact of local planning or zoning classifications/changes, easements or special overlays that restrict the way you can use the property.

    Only once you are comfortable with the Contract of Sale, should you proceed with an offer.    

    If you’re buying off the plan, there will be additional factors to consider because the property is not actually built. The developer will need to provide details of completion/sunset dates and construction stages and how these affect progressive payments and what happens with your deposit funds, as well as what deviations to the plan/schedule are permitted.

    2.  Confirm your finance

    This might sound obvious, but you need to have your finance available or approved by your lender in writing before you make an offer. Offers ‘Subject to Finance’ are not as effective as an Unconditional Offer and really don’t give you the best chance of securing the property, especially in a competitive environment.

    3.  Understand all the costs

    You will need to confirm the required deposit and have the balance of funds ready for the agreed settlement date. Remember that your budget needs to include stamp duty, legal costs as well as disbursements that could include body corporate charges, council rates or water levies that may be due at time of settlement. These all need to be covered by the purchaser.

    Further costs not directly linked to settlement may also include property inspections, insurance, relocation/moving charges, immediate repairs or renovations, design or drafting, renovation applications, cleaning and potential interim accommodation, so the total cost of the purchase is greater than the actual offer amount.

    It’s worthwhile considering that becoming a home owner may involve new costs additional to renting, living with parents or even moving from a previous owned property.

    4.  Control the emotions

    This is true for any buyer, however especially true in the case of first time buyers who are excited about their purchase. 

    If you are buying as a couple, you both need to be on the same page. Making an offer when you are not unified is unfair on each of you but also the agent and the vendor.   

    5.  Professional help or experience

    Understanding the contract is one thing, understanding what you are buying is another. 

    Property inspections are an effective way to check for unforseen conditions that could adversely affect how you use the property or expenses to rectify or material for repairs.

    Better to resolve this before you make an offer and use this process to determine if the property is right for you.

     

    About the author

    • Nikki McCarthy

      It was Nikki’s role on property show ‘On Display’ (CH9) that led her to residential real estate. She understands what it takes to get the best results when buying or selling a home having worked with developers and agents through the course of the show.

      Nikki is now living the dream and working closely with clients as she continues to pursue her love of all things property. It is her goal to work closely with her valued clients to achieve the best possible results when buying or selling their home.

      Nikki McCarthy
     

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  • Disclaimer:

    The information here is of a general nature only and is not intended to constitute financial or tax advice. You should consult your professional adviser, accountant or taxation expert for advice specific to your personal circumstances.