A lot goes into the buying process of property, with many stating that the most daunting moment of home buying is making an offer on their dream home.
It’s not unreasonable to think this way, as there’s a bulk amount of paperwork to go through, and that’s not including the financial aspect of the purchase. On top of that, negotiations aren’t for everyone, with individuals often opting to put in an offer without haggling, and not a single thought can be put into everything that needs to be done once the offer is accepted.
It’s exhausting just to think about it. Thankfully, this article is here to de-mystify the frightening task and showcase that it’s not as difficult as it first seems as we show you how to make an offer on a house.
Connect all your utilities in just 8 minutesConnect your Utilities
Defining the Term ‘Making an Offer’
There are several ways to make an offer on a house. The most common and official way is known as a formal offer. A formal offer on a house is done in writing and submitted to the selling real estate agent, who will subsequentially pass the offer onto the vendor.
This written offer comes in several forms, most commonly over email but also completed over pen signature or a contract signing. The form will typically follow the agent or vendor’s preference.
A verbal offer can also be made with the agent in person or over a phone call, but this is not seen as a concrete offer and is not taken as seriously as a written offer.
Make the Right Proposal
Another negative of a verbal offer is an agent or vendor may hold your offer in as high of a regard as a formal offer from another serious buyer.
It’s best to gain an understanding of what the agent is like and assess what written offer works best, whether that be meeting the sales agent in person or sending an email.
There are specific things to include in your written offer to ensure the offer is as official as it could be. These things are:
- Your name, address, and contact details.
- The seller’s name, address, and contact details.
- The property address in question and the purchase price you’re offering.
- Any relevant financial data, including deposit and lenders information.
- Settlement date should you pay cash upfront.
- Any additional contract terms (items included in the sale i.e. appliances, renovations, repayments, etc.)
- Potentially waving off any cooling-off period
Patience is a virtue, but when it comes to home buying the slow and steady don’t seem to win the race, no matter how many open homes you’re visiting.
There are too many instances of an individual contemplating whether they should place an offer on their potential new home or not, only to find out the property has gone ‘under offer’ and you’re left looking for your next home. While an offer doesn’t need to be placed immediately, inform the salesperson about an expression of interest.
Monitoring other potential buyers is also vital, as you can request that the salesperson notifies you if any formal offers are made, therefore you can gain a greater understanding of the situation and make a potential counteroffer with a better purchase price.
Additional Contract Terms
As mentioned earlier, additional contract terms can be mentioned in your offer. Typically these terms are discussed before being mentioned in the offer, as a blindside of terms for an offer may not sit lightly with the vendor.
Additional contract terms can help levy any risk that’s typically found throughout the purchasing process. Terms in the contract could allow you to conduct a more thorough inspection of the property, as well as address any concerns the seller has before any mention of the settlement date.
Examples of contract terms are:
- Pest inspection (ensuring the property is infestation-free, and there’s no structural damage from termites).
- Building inspections for any structural issues involving the home.
- Utility clauses (electrical, gas, plumbing systems to be in working order).
Get Conditional Approval
For those who are unaware, conditional approval means that your home loan has been assessed and approved, at least from a principle standpoint.
This pre-approval will allow you to get a better grasp of your borrowing power and give you a better understanding of your price range and how much you can afford for the property.
This approval will not only allow you to grasp a better valuation of your financial situation, but it will also place you in a better position in the seller’s eyes, as it will assure the seller you’ll be able to reach their asking price and hopefully reach the contract of sale.
Determining Price Offer
While a seller may have a set price in mind, not all buyers will agree with the house price, allowing room for negotiation and potentially a chance to net a lower price (instead of settling on the highest price).
The best way to favour your price preference is to conduct thorough research. This can be done by searching for similar properties in the same property market, allowing you to assess a typical house in the area and see if the asking price matches up with the rest of the property values.
Attending open houses, seeking external financial advice, and chatting with local real estate agents is another way to get a cut above the rest when determining the sale price and allowing you to get the jump on a great first offer.
Employ a Conveyancer
For the completion of the offer, it’s recommended you look for a settlement agent (also known as a conveyancer).
As this portion of the home purchasing process requires a bulk of paperwork, a conveyancer will be able to:
- Attend settlement on your behalf.
- Initiate required inquiries targeting any rates, titles, and zoning of the property in question.
- File transfer ownership paperwork for the certificate of title.
- Double-check specific contract requirements before the settlement period.
For any other questions about moving home as a whole, we’ve put together the ultimate guide to moving house, which you can check out here. If you’re looking to get an early start on maintaining your new home, check out our home maintenance checklist here.
If you need help getting your utilities connected sorted, please call MyConnect on 1300 854 478 or use the Get Connected form here! All residents from Victoria (VIC), Queensland (QLD), New South Wales (NSW), Australian Capital Territory (ACT), and South Australia (SA) can get connected this very business day. If you’re a first home buyer and you’re unsure about using a utility connection company, this post here can assist you.