CALL 1300 GO BEYOND
MAKING OFFERS AND ACCEPTANCE
This really only applies if you're buying an established home but it was what I found to be the most daunting part of the experience. I remember whispering to my wife in a room full of people about what we should offer while trying to make sure no one else could hear our conversation.
The important thing is to do your research before you even go to the viewing, and try to gauge how much demand there is for the house. Generally speaking you will know by how long the house has been on the market, the amount of people at the viewing and sometimes you can get hints from the agent as to what offers are already on the table (this is obviously assuming the agent isn’t trying to push a sale so tread lightly here).
There are also some seriously good resources online at reiwa.com.au.
For houses that have been listed for a while you could probably be conservative with your offer in the hope that it gets accepted. Be reasonable here because an offer that is too low won’t win you any favours with the seller and in reality $50,000 discounts are not really common in the first home buyer market but you will need to gauge this at the time.
If you stumble across a house that seems like it is well-priced and has a few offers on the table, try to avoid round numbered offers and go with an obscure amount – I won the offer on my house by a mere $1000.
It’s worth noting that just because you have the highest offer doesn’t mean it will be accepted either, so make sure you have a preapproval to give the seller peace of mind. Plenty of deals fall over because of finance declines and people with large deposits typically sit better with sellers.
Remember, a well priced house will sell. It's simple economics.
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CONDITIONS
When you finally make the offer, it is a legally binding contract so remember to include the conditions, subject to finance and pest/building inspections. These caveats let you withdraw from the deal if the house is riddled with termites, for example. Keep in mind though that too many conditions may cost you the house if there are several offers on the table, so keep it simple.
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HOUSE AND LAND PACKAGES
If you are shopping for house and land packages or off the plan apartments they are generally priced depending on the features you pick in your house but that is not to say you can’t barter on price. In fact, given how competitive the market is in this space, it is not uncommon to get some freebies. If you don’t ask you don’t receive.
ACCEPTANCE
So you have made your offer and the seller has accepted it. You now need to satisfy the conditions attached to your offer. This will involve getting pest and building inspections and approaching your bank for formal finance approval. If you have obtained preapproval this will generally be faster and all you will need to do is provide a copy of the offer and acceptance to your bank or mortgage broker.
If your preapproval has lapsed or you never got one you will need to complete the full application process as mentioned earlier. The time it takes for a bank to complete this will vary; some can turn around applications in a couple of days while others may take a couple of weeks. The strength of the applicant’s financial situation will also influence this. Logically it is easier for a bank to approve a high income earner with a large deposit over a lower income earner with a small deposit.
It is now worth getting home and contents insurance. There are different opinions around about when to get insurance but generally you should do this pretty early in the process because it is better to be safe than sorry. It is also worth noting that a number of banks require this for settlement.
Remember that the conditions set out in the offer will have to be performed within a specified time frame so work quickly.
