7 steps to making an offer on a house

Are you looking to buy a home and ready to make an offer on your perfect property? To help make the process easier, RE/MAX sales agent Demo Foufas reveals his top seven tips that buyers need to keep in mind to help make a winning offer.

1. Engage the sales agent early

If you’ve found a property that suits your criteria and budget, then engage the sales agent early. According to Demo, it’s not uncommon for many prospective buyers to sit back only to enquire about the property when it’s gone ‘under offer’, at which point it’s too late.

Demo says that if you find a property you like, speak to the sales agent and make it known that you’re interested. At the very least, ask the sales agent to contact you should any formal offers be submitted so you have the opportunity to submit your own offer, according to Demo.

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Buying Your First Home with Demo Foufas: Connect Events highlights

Video transcript (PDF, 73KB)

2. Avoid verbal offers

According to Demo, it can be better to submit a formal written offer to show that you’re a legitimate buyer.

This should include:

  • Your name and address as well of those of the seller
  • Your offered purchase price and the property address
  • The financial details such as your deposit, your lender’s details or if you’re paying cash
  • The settlement date. This is the official date that the seller receives their money and you receive the titles to the property
  • The included chattels (chattels are additional objects in the house that are included in the sale of the property, such as dishwashers, built-in barbeques or fridges etc.)
  • Conditions of the sale
  • Additional contract clauses.

Demo says that buyers can meet with the sales agent to prepare the written offer before the sales agent submits it to the seller for their consideration. The agent should have the relevant paperwork and certificate of title available for you.

3. Use contract clauses to your advantage

Demo says that buyers should use additional contract clauses to de-risk the buying process for them. Including additional clauses can allow buyers to complete further due diligence on the property and have the seller rectify any issues before settlement occurs. Demo said some common contract clauses that buyers should consider include:

  • Pest inspections to check the property is free from timber pest activity or structural damage by timber pests
  • Good working order clause for electrical, plumbing and gas
  • Building inspections to check the dwelling is structurally sound
  • Swimming pool/spa clause to ensure these are in good working order.

4. Apply for finance pre-approval before starting your property hunt

Pre-approved finance - sometimes called conditional approval - will give you an understanding of how much money you can borrow to buy your home.

Demo says that it can also put you in a stronger position when it comes time to make an offer on a property. This is because a seller is more likely to favour a bidder with pre-approved finance as it provides more certainty that the buyer will be able to pay for the property, compared to someone without pre-approved finance.

5. Determine your offer price

Although a seller will often advertise their property for a particular price, this doesn’t necessarily mean you’ll have to pay that amount.

To ensure you’re paying the correct price for a property, Demo recommends completing your own research to see how much similar properties have been selling for in the area. As well as attending home opens to gauge pricing, sales information can be found on some property websites. Demo recommends speaking to local real estate agents as well.

A Bankwest Home Finance Manager can help you with a detailed property report.

6. Understand the seller’s motivations

Demo says that winning offers aren’t always about the highest price. Potential buyers also need to consider the conditions of the sale contract and what might appeal to the seller. To do so, it’s important to understand the owner’s motivations for selling by asking the sales agent some questions, such as:

  • Why are the owners selling?
  • How long has the property been on the market?
  • Have there been any formal offers received on the property?
  • How long have they owned the property for?

Demo says that different sellers have different motivations and by understanding these, potential buyers can use this information to their advantage. For example, a family selling their property to buy a bigger home may want a longer settlement period to give them more time to find, buy and move into their next home. Demo says that offering a longer settlement period in such instances could be the difference between successfully or unsuccessfully negotiating the purchase of a property.

7. Find a settlement agent

To finalise the sale transaction, you’ll need to engage the services of a settlement agent, sometimes referred to as a conveyancer. A settlement agent will generally:

  • Lodge documents to transfer the details of ownership on the certificate of title
  • Complete the necessary enquiries regarding the property’s rates, titles and zoning
  • Check special conditions of the contract have been met prior to settlement
  • Attend settlement on your behalf.

Demo says that most real estate agents will recommend a settlement agent. It can be beneficial to obtain a few quotes from a few reputable companies before deciding which settlement agent to use. It’s important to ensure that this is a written quote outlining all fees and charges, including any government costs.

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Things you should know

The information contained in this article is of a general nature and is not intended to be nor should it be considered as professional advice. You should not act on the basis of anything contained in this article without first obtaining specific professional advice. To the extent permitted by law, Bankwest, a division of Commonwealth Bank of Australia ABN 48123123124 AFSL / Australian credit licence 234945, its related bodies corporate, employees and contractors accepts no liability or responsibility to any persons for any loss which may be incurred or suffered as a result of acting on or refraining from acting as a result of anything contained in this article.