From making a bid to signing the contract, the final stretch of breaking into the property market is often the most stressful.
Give yourself the best chance of sealing the deal on your first home with these tips on how to make a winning offer.
Have your finances in place
Before you start house hunting, make sure your finances are in order. Sydney’s real estate market is a tough place for first-home buyers, and having a pre-approved mortgage is advisable before you make a bid or an offer on your dream home. Contact your bank or a mortgage broker to get a clear understanding of your budget, taking into account elements like stamp duty and legal fees.
You should also have a good solicitor ready and waiting; you’ll need to move quickly once your offer is accepted.
How and what to offer
A compelling offer should be both competitive and within your budget. Have a look at similar properties that have recently sold in the area to get a good idea of what’s appropriate. Bear in mind that, generally, your offer should propose a discount from the asking price of no more than 5%. For example, for an $800,000 home, you should try to make an offer above $760,000. If you go too low, the owner might not take you seriously enough to come back with a counteroffer.
Once you’ve decided on an opening offer, check with the agent on the best way to submit it. Most agents will require you to submit an offer in writing, often using a specific online platform or, perhaps, a common communication channel like email or text.
Communicate with the agent
Establishing regular and clear communication with the real estate agent is crucial. The negotiations will happen through them and they are your link to understanding the vendor’s expectations and motivations.
The agent must present every offer to the vendor, so when you name a price, ask them when they’ll put it to the vendor, and how quickly you can expect to hear back from them. If you don’t hear back, call them, especially if you’ve made an offer in writing and don’t hear within 24 hours. You may be one of many offers, so if you’re serious about a property, keep the negotiation rolling!
Your offer has been accepted! Now what?
Once your offer is accepted – fantastic, but don’t pop the Champagne just yet! The next steps are crucial in securing the property and finalising the details of the sale.
Pay close attention to the deposit amount required, and ensure the funds are readily accessible in your account. In New South Wales, you typically pay the minimum deposit (0.25% of the purchase price) when your offer is accepted and the remainder when the contract becomes unconditional (before the cooling-off period expires).
Once you receive the contract to be signed, move fast. The vendor is unable to sell to another buyer after they have signed. This means that as long as the vendor hasn’t signed the contract, they can still accept any other offer.
As soon as you receive the paperwork, you have two choices: sign it immediately, which will then pass it onto the owner to sign, or send it to your solicitor or conveyancer first, who hopefully is expecting your call. Organised buyers can turn this process around in hours, sometimes less, but if you have not yet given your solicitor a heads up and are waiting for them to review the contract, it could take a couple of days.
Once both contracts have been signed, your solicitor or conveyancer will still have time to review the contract carefully during the cooling-off period, but if you pull out of the sale you will lose your 0.25% deposit. Remember that the typical cooling-off period for properties in New South Wales is five days, although this can be negotiated. This gives you time to conduct the building and pest inspections, finalise the details of your new mortgage and ensure you’re happy with all the terms and conditions.
It’s no secret that breaking into the real estate market is challenging, but with a clear understanding of the purchasing process, you can navigate it with ease. If you’d like further information on how to make a winning offer or manage the buying process, reach out to our team using the contact details below.
The information referred to in this article was obtained from publicly accessible sources from W Legal Group and NSW Fair Trading. The information provided in this blog post is for general guidance only and should not be taken as personal advice. We do not accept any liability for any errors or omissions.
Prudential Real Estate Campbelltown | (02) 4628 0033 | campbelltown@prudential.com.au
Prudential Real Estate Liverpool | (02) 9822 5999 | liverpool@prudential.com.au
Prudential Real Estate Macquarie Fields | (02) 9605 5333 | macquariefields@prudential.com.au
Prudential Real Estate Narellan | (02) 4624 4400 | narellan@prudential.com.au
