Deciding to purchase a new home can be an exciting, but stressful time.
While making an offer in itself is not a difficult process, buyers need to undertake ample research before formally putting a dollar figure and sale conditions in writing.
MARQ Licensed Agent Jason Anasson said purchasing property was all about the art of negotiation, and there were several ways house hunters could give themselves the best chance of success when making an offer on a new home.
Open communication with the agent
Knowledge is power so having an open and transparent line of communication with the selling agent will be critical to ensuring your offer is well considered.
Establishing good rapport with the agent from the get-go will also help you to determine how they operate and the structure of their sales campaign, as well as the vendor’s desired sale price and conditions.
“The most important ingredient to making a successful offer on a new home is to have a transparent line of communication with the agent for negotiation,” Jason said.
“Expressing interest to the agent is really important, as well as confirming their offer process because every agent will have a different process that they use,” Jason said.
“It’s also worth confirming with the agent if you might have another chance to increase your offer, or if you need to put your best and final position forward on the first occasion.”
Having pre-approval for finance is likely to make your offer more palatable to the vendor and will show you have done your homework in determining your budget and borrowing capacity.
“I recommend buyers get formal pre-approval on finance because it will strengthen their position when it comes to making an offer,” Jason said.
“It shows that they’ve done some due diligence in and around their financial position and it provides the agent and vendor with confidence that the buyer would be able to obtain funding needed to buy the property.
“A lot of people come through and may have done their sums on an online bank calculator thinking finance won’t be an issue. But in this day and age, if they have to go through the process from scratch, it could take a lot longer and there’s no guarantee that they will be able to obtain the finance or the figure they require.”
Making the offer
Presenting your offer in writing will support your position and show that you’re genuine in your intentions.
It’s important to have given the current market conditions, the property’s features and buyer competition sound consideration before making an offer. Be reasonable in your offer and open to negotiation if it doesn’t hit the mark on the first presentation.
“Having a solicitor or conveyancer lined up ahead of time is always recommended to make for a more timely and seamless transaction,” Jason said.
Buyers who want to try their luck with a pre-auction offer should make the offer unconditional and an attractive price.
“Pre-auction offers, in my opinion, need to be extremely strong to be considered because you basically need to remove any doubt from the vendor’s mind that they would be able to get more on auction day,” Jason said.
“So, you’ve almost got to pay for the privilege to secure the property.
“It’s a gamble for both buyer and seller. The risk is the seller could potentially get more on auction day or the buyer could pay less than a pre-auction offer.
“Many people prefer the transparency of an auction and knowing where they sit amongst the competition. But in the same respect it could be the situation where there’s a turning market, similar to now, and there may not be a huge amount of interest in the campaign. That buyer could present a pre-auction offer and be successful.”
It’s important to remember there are always other buyers in the market looking to make a purchase so if you have done your research, budget and are ready to buy, don’t hesitate in making an offer.
Being slow of the mark might result in disappointment if you miss out.