Submitting a formal offer on a house is actually a very straightforward task. It generally entails formalising the offer in writing and submitting it to the vendor's agent.
However, there are always a few tips and tricks that can help to differentiate your offer from the competition. If you are serious about a house, don’t cut any corners. Make sure you put yourself in the best position possible.
Attend the first open home
So you have done your research, you’ve highlighted a couple of houses you are interested in and the first round of open homes is coming up, attending them is a no-brainier, right?
If you are interested in a property, it pays to attend the first open home. The obvious reason is so you can walk through, get a feel for the house and envision making the space your own. But, another key reason for attending is so you can scope out your competition and gauge the interest.
If there is a fairly poor turnout and the house is up for auction, you may find the vendor may be more welcoming of early offers. However, if there is a strong turnout with a number of people inquiring about contracts or asking for more information, you may be in for a fairly tough campaign.
Get in quick
Regardless of the perceived competition, if you are serious about submitting an offer, get in early and quick. Getting in early will put the onus on the vendor and it’ll signal you as a serious buyer.
If there was a poor turnout, your thought process may be to ride it out, in the hope the vendor drops the price. However, do you really want to risk someone snapping it up while you wait?
Submitting an offer early on in the piece will force the vendor to make their mind up earlier then they may have liked. Even if they reject your offer, you’ll then have a clear picture of their realistic expectations. From there you’ll be in a good position to either start negotiating or table another offer.
Remember the longer you take to submit an offer, the more room you are leaving for others to come in and snatch it away from you.
Unconditional is preferred
Selling a property is not an easy process and most vendors don’t want the process to draw out for too long. Thus, you’ll find a lot will look for the easiest route to close the deal.
As a result, if you are able to submit an unconditional offer, your bid will become a lot more appealing to the seller.
Conditional offers that may be subject to financing or inspection arrangements, tend to be less attractive. Although, this is not to say they won’t be accepted.
However, if a conditional offer and an unconditional offer is submitted with similar prices, chances are the vendor will be more likely to accept the unconditional offer.
Make a fair offer
If you are serious about purchasing a house, don’t attempt to lowball the vender in the hope of securing a bargain. The best thing you can do is submit a serious offer straight up.
A lot of prospective buyers may try to offer significantly lower than their break-even point, but this rarely works. If you do attempt this, you run the risk of running into major issues.
Firstly, vendors and agents may not consider you a serious option, thus they may not review your offer seriously or keep you in the loop if other offers are made. Secondly, the chances of someone submitting a serious offer, closer to the asking price, is quite high.
If you initially submit a respectable offer, you’ll have a better chance of being able to negotiate the price or terms of sale later. If you find a house and fall in love with it, don’t run the risk of missing out.
If you need to, don’t be afraid of paying right up to your limit or even a little over. Because if you don’t and you miss out, you never know how long it may take you to find something similar.
Submitting an offer on a house is a big decision, one that needs to be carefully thought out and planned. Remember, if you submit an offer and it’s accepted, you are legally obligated to finalise the purchase. If this is your first time making an offer, make sure you have discussed your options with a trusted adviser and you understand exactly what you are getting into.
Whether you are a first-time buyer or a seasoned investor, we are on hand to discuss the option available to you. Don’t go into the process blind, contact us today!
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