7 Tips for Making an Offer on a House
You've found your dream home and want to make an offer — what's next?
Anyone looking to buy a home knows that the auction process can be stressful. Luckily, if you’re looking to avoid buying under the hammer, you can put forward an offer on the home you want, just as you would through a private sale.
Here are our seven tips on getting the best deal out of making an offer on a house.
1. Making the offer
The process of making an offer is actually very easy. All you need to do is contact the real estate agent, and tell them what you’re willing to pay. The agent will liaise with the seller, and get back to you. You can do this via a phone call, put it in writing in an email, or even in person if you would like.
But it’s not the act of making the offer that will set you apart from your competitors – it’s the lead up. Knowledge is power – at the stage where you are making an offer, you should know your financial situation, have learned the suburb conditions, scoped out the property, and researched the competition.
2. Get pre-approved
Put yourself in the seller’s shoes – selling a home is tedious and sellers are often looking for the easiest way out possible. Therefore, you need to make the process easy for them, get your finance pre-approved so you know exactly what resources you’re working with, and you don’t waste anyone’s time. Before you can make an offer, you must know your limits. Learn more about getting pre-approved here.
3. Attend the first open for inspection
Attending the first open inspection for a property is important. This allows you to gauge the level of interest – if it isn’t busy then the seller is much more likely to take up an offer. If there are a lot of people, check to see how many are asking for copies of contracts or asking about early offers. This should tell you what competition you’re up against and you can set your offer accordingly.
4. Inspect the property properly
Home inspections quickly become overwhelming, but you need to be at your peak if you want to get in a good offer. While you’re scoping the competition at the inspection, make sure you’re getting (and retaining) information as efficiently as possible. You don’t have much wriggle room for hesitation when making an early offer. Make sure you’re doing open homes the right way with Gateway’s 10 Questions to Ask Your Real Estate Agent and our Home Inspection Checklist.
5. Offer quickly
If you found that interest in the property wasn’t hot, it’s tempting to delay putting in an offer in a bid to make the seller desperate. However, your best bet is to get in early and confidently, and set the seller a quick deadline to get back to you. This puts you in an ideal place to negotiate. A reasonable response period to set would be about 48 hours, this gives the seller time to decide but limits other buyers from getting in before you.
6. Offer your best price
Playing games with the real estate agent is a sure way to not be taken seriously. Real estate agents do this every day, they’d rather deal with upfront buyers than people trying to pull the wool over their client’s eyes. They know that most people making an offer pre-auction are either looking for a bargain or trying to cut through the competition, because presumably the property suits their needs. Don’t shoot yourself in the foot by under-offering and missing out to a higher bidder. Get a free suburb report and educate yourself on what you’re buying into, so you know your offer is reasonable.
7. Negotiation know-how
If you’re putting in an offer, expect to negotiate. You’ll probably be negotiating against other buyers, so whether you’re dealing directly with the seller or via an agent, you want your offer to stand out.
Remember, your main priority is to make it easy for the seller. Do some research and learn about the seller’s situation. If they’ve already purchased another home, offer a settlement date that lets them avoid bridging finance or finding temporary accommodation between settlements.
Of course, you don’t want to badger the agent about their client. Pose respectful questions such as, “is there a particular settlement date the seller is looking for?”, or ask the agent if there are any conditions that might make your offer more favourable. Remember, the agent wants to find the right person to buy the property - use their knowledge to your advantage.