How to make an offer on a house
Making an offer on a house is the first step to getting the ball rolling on your home purchase. If you’ve found your dream home and are ready to buy, here are a few tips on putting an offer down.
Before you put in your bid for a house, it’s best to be prepared. Here are a few ways to help you on your homebuying journey:
Get pre-approved finance
Having home loan pre-approval could be the best way to show the owner you’re a serious buyer. This tells sellers and real estate agents that you have the means and are already preparing finances to make the purchase. Though pre-approval isn’t guaranteed approval, it’s the closest thing you can get.
Getting home loan pre-approval can take a few days, depending on which lender you are looking to buy through, so if you’re serious about buying a home soon, it’s best to get this out of the way first.
Start your home loan pre-approval application
Speak with a loans.com.au lending specialist about getting home loan pre-approval. You can also get pre-approval by starting your home loan application online today!
Have a pre-purchase home inspection
Getting a pre-purchase inspection to get a comprehensive look at the property before making an offer may be a good idea. There are only so many things you can inspect yourself. With a building and pest inspection report, you can learn about the true condition of the property and if there’s anything the seller didn’t disclose or may not know about before making your offer.
Review the conditions of the contract of sale
Sellers will have a contract of sale available that potential buyers can read before putting down an offer. In the contract, you’ll see important information such as zoning, registered interests over the property, title as recorded in the Land Titles Office, certain clauses, and the like. Before making an offer, it’s best to review it with a conveyancer or solicitor.
How to put in an offer on a house
With the highly competitive real estate market in mind, putting in a good offer can be the difference between getting the house you want and being lost among the other offers. Below are the steps to making a solid offer on a home:
Do your market research
Deciding on the right offer price is vital to the whole homebuying process. If your offer is too low, the seller isn’t going to give you the time of day. At the same time, you don’t want to put your offer too high and overpay. Before you go in guns blazing and offer more than the property’s worth, be sure to do some market research.
Look at similar properties in the area (as in, properties with the same number of bedrooms/bathrooms/features you’re looking for) that have recently sold.
See how much they sold for, how long they were on the market for, and so on. Having this research front-of-mind can be helpful when putting in an offer, as you can identify how much you should realistically be prepared to spend.
Free online property reports can also be helpful to get a snapshot of key details of the property you’re looking to buy.
Put your best foot forward
In a seller’s market, most experts advise that you offer your best price from the get-go to stand out from other potentially lower offers. This saves your offer from being discarded due to being too low, and it can help your offer stand out.
While you can definitely offer less than the asking price, if you really have your heart set on one particular home, it may not be wise. Many properties will sell with multiple offers on the table for the vendor to choose from. This means that the best offer will likely end up with the home.
With this in mind, it’s still helpful to keep your budget in mind. If the vendor simply wants more than you’re able or willing to pay, you should know when to walk away.
Be quick
Time is of the essence, especially if you’re in a seller’s market, so be sure to get in quickly with the seller. Attend the first inspection before setting your sights on one particular property, as it will always look different in person. Then, if you’re sure it’s the right home for you, be sure to put in your offer quickly to get ahead of the competition.
Submit the offer letter
Making a formal offer on a house needs to be done in writing so that it can be presented to the owner. When writing your offer, you will lay out conditions such as how much you want to pay for the home, how you will be paying for it (cash or home loan), when you want it to settle, and so on.
While you can make a verbal offer to a real estate agent, for the contract to be drawn up, everything needs to be written down. Sometimes, you may need to show a form of ID (e.g. your driver's licence) for your offer to be accepted.
If the seller decides to accept your offer, the next step from here is signing the contract and officially purchasing your new home.
Seek legal advice
Be sure to understand exactly what you’re agreeing to, and that you’re happy with the contract before you sign it. Once both parties have signed the contract, making any changes will become more difficult, if possible at all.
If you’ve put in your offer and had it accepted, before you sign any contracts, make sure to seek legal advice from a solicitor.
Can you withdraw an offer?
Once the contract is signed, it can be more difficult to withdraw your offer and depending when you withdraw the offer, you may be significantly penalised. Make sure you talk to your lawyer to understand your rights and options.
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About the article
As Australia's leading online lender, loans.com.au has been helping people into their dream homes and cars for more than 10 years. Our content is written and reviewed by experienced financial experts. The information we provide is general in nature and does not take into account your personal objectives or needs. If you'd like to chat to one of our lending specialists about a home or car loan, contact us on Live Chat or by calling 13 10 90.
