Finally found your dream home after months of house shopping? Fantastic! It’s a great feeling, right? However, the process doesn’t stop here. There’s actually still quite a bit of work to be done once you find the right house. Now it’s time to put in an offer that the seller (hopefully) accepts. But, how do you make an attractive offer that stands out that the seller is going to accept? Read on to get our tips and tricks to make an attractive offer (for both you and the seller).
Consult your solicitor
It’s a very good idea to have a chat to your solicitor before you submit your offer to the vendor. Your solicitor will be able to advise you on what you should include in your offer, and your solicitor will also be able to advise you on what due diligence should entail. Due diligence usually includes things such as checking the LIM report, getting a builder’s report, finance etc.
Your solicitor will also review the sale and purchase agreement so you know exactly what you’re signing and the solicitor can flag if there’s anything unusual in the contract.
Confirm your finances
Hopefully, you already have a pre-approval (you really should have one before you start house hunting so you know your budget). Once you have found your dream home and you’ve made an offer (which will most likely be conditional if you’re a first home buyer), you need to get the home loan approved by the bank. That’s why for most people it’s a really good idea to include that you can cancel the offer if the bank won’t lend you the money. Otherwise, you will have a bit of a problem. So as a rule of thumb you should include this in your list of conditions.
So you need to give your mortgage broker a ring once you’re ready to put in an offer on a house so they can get to work on getting your home loan approved.
We just mentioned above that most first home buyers do conditional offers, but you can also do an unconditional offer. In a conditional offer you attach conditions such as the right to cancel if the bank won’t lend you money, the builder’s report is unsatisfactory … Your solicitor will be able to advise you on which conditions you should include. If the conditions aren’t met you can cancel the offer and simply walk away or you can negotiate the price again or ask the vendor to pay for a problem to be fixed (this is usually if something shows up in the builder’s report).
As mentioned the majority of first home buyers make conditional offers. Naturally, for vendors an unconditional offer is usually more attractive as it doesn’t include a list of conditions that need to be met, however, for most first home buyers making an unconditional offer isn’t an option.
Let’s say you’ve decided to make a conditional offer (because that is the case for most first home buyers), now you need to decide which conditions to include. It’s highly recommended that you consult your solicitor about this.
Get your solicitor to go over the sale and purchase agreement
The sale and purchase agreement is drawn up by the vendor’s solicitor, and it’s highly recommended that you get your solicitor to review it. The contract will most likely contain information and jargon that is a bit tricky for the average person to understand, and since you’re not exactly dealing with sale and purchase agreements on a daily basis, you probably won’t notice if there’s anything unusual in the contract. So, leave it up to the professionals. This is also the reason why you need a power team so you’re surrounded by experts and thereby receive the best advice so you don’t end up making a bad investment.
But, how do I make my offer more attractive?
Now that we’ve covered what you need to do in order to make an offer, let’s look at how you can make your offer stand out so the vendor just cannot say not.
Have a pre-approval
We’ve said it before, but make sure you have a pre-approval. By having a pre-approval you can act faster, making your offer more attractive.
Be flexible on settlement date
For many vendors it’s a big plus if you’re flexible with the settlement date. You can even check beforehand with the real estate agent and see if the seller prefers a specific settlement date.
Work through the conditions quickly
When you list conditions that involve third parties (such as a builder to do a builder’s report), let the vendor or the agent know that you are already in contact with these people, and you can move quickly once the vendor accepts the offer.
Keep your timeframes short
No seller wants to wait weeks and weeks for the conditions to be met. For first home buyers a conditional offer is usually 15 days. You want to give yourself enough time to get the work done but you also don’t want the vendor to wait longer than necessary.
By following these tips and tricks and working with the right professionals, hopefully you’ll be living in your dream home in no time.
Everything shared in this blog post is general financial advice. For financial advice tailored to you, please book a meeting with us.