House Buying: 6 Steps On How To Make An Offer
House buying is difficult. Making an offer to purchase can be very stressful.
Before you make an offer on your dream home or invest in your growing property portfolio, you need to be confident that you've taken all the steps to ensure you are making the correct decision.
Making an offer on a house is the easy part. Catch up with the real estate agent who has the property for sale, advise that you wish to make an offer, put your offer in writing and let the agent put it to the seller.
If that has your heart beating a little faster than usual, that's normal.
Most buyers might think they are signing their lives away, but that's not the case. An offer is purely an offer; not a legally binding contract.
The offer must be accepted by the seller, and the buyer is protected by a compulsory cooling-off period, just in case they change their mind, plus there are other conditions your solicitor can advise you about.
In this article, we'll look at the key steps you need to make to buy with confidence. There is a knack for making the right offer that gives a buyer a winning edge. Let's look at what you need to do.
1. Research, Research and Research
Work out what you really need and do some online research. Check out Australia's biggest real estates portals like Domain and REA. These two portals have most of the country's properties for sale.
Define the area you want to be in, and enter your minimum and maximum bedrooms and your price range.
2. The Must Visit - The Open For Inspection
Even if you have had a private inspection of the house, you must return by attending the public open for inspection. Here's what you can discover:
(a) See how many people are attending. If there are lots of people; you've got competition. You'll need to make an offer, sooner than later.
(b) If the open inspection is poorly attended, ask the agent why he/she feels the numbers are low. Maybe the property is going to offer? Will the seller accept offers prior to the auction?
3. Make Sure You Have Your 'Finance' Ducks In A Row
Simply put, get pre-approval for finance.
You need to know how much you can comfortably spend. Although not a guarantee, a bank pre-approval for a loan gives you good confidence about securing a home loan.
4. Making An Offer - Early And Solid
If you've done your search, visited a number of properties, worked out all the pros and cons and believe you've found your dream home, then make a confident offer early and at a solid price.
By going early you show the real estate agent that you are a serious buyer; one worthy of more attention.
It places you ahead of the pack and helps build a relationship with the agent; something that helps get the agent to 'work for you'.
Make a good offer. Making low or silly offers puts you offside with the agent and the seller; many times getting you relegated to the back of the pack. And that's not the position to be in; last!
5. Go Unconditional If You Can
Making an unconditional offer puts you at the top of the class.
Most offers come with conditions. Subject to finance, subject to selling another house or subject to another inspection, maybe with a third party.
Unconditional offers give peace of mind to the seller and are more likely to proceed.
6. Give Your Best Offer
Giving your best offer applies in both slow and fast markets.
If the market is buoyant, prices are moving upwards and stock levels are low, there will be strong competition from lots of buyers trying to secure the property. It's important to offer your best price. There's no guarantee you'll get a second chance.
In slow housing markets, the good property is more sought after. There are fewer sellers on the market (because they are unable to buy a replacement property due to a lack of choice) resulting in the prime property being snapped up. Leading with your best price can knock potential buyers out of the race, handing you the home on a platter.
If you've done your research, inspected enough homes and arranged your finances in advance, you can feel confident that you won't be making an offer that is over priced.