Making an offer on property

[donlou]

G'day all,

We are currently going to house ' Opens' with a view to purchasing a property soon. What is the process for making an offer? Can you talk to the real estate agent at the open and make a verbal offer or do you have to make a written offer?

Any advice greatly appreciated.

Thanks in advance.

DonLou

[V-Bird]

The Agent at the open day will have contracts ready for signing. All you do is agree a price and you can sign-up there and then. Another 4 weeks you could be in.

They don't mess about here.

[cliffy]

We have always submitted and offer in writing, with contracts from the estate agent, and they have phoned us back later to say whether it has been accepted, or in one case, to ask whether we would like to revise our offer up, as the vendor wanted more. Then you have to go and sign the contracts.

You should have all your finance in place before you make an offer, but can make it subject to finance and definitely subject to a satisfactory building inspection, in case there are any unseen problems.

[snifter]

We always took an offer form, were clear how soon we had to get our offer in by. We left our contact details so if they had an offer out in in the meantime they would contact us and say we had till the end of business that day to submit our offer so they could present them to the vendor to choose.

 

This have us a bi of breathing room to not impulse offer and to go away and research it's sold history etc and to be happy we were putting in an offer we were happy with or not over the odds.

 

Once our offer was accepted we then signed the contract, had the 48 hour cooling off and got the building inspection done. After that cooling off period there is no backing out (unless finance falls apart) and both are locked in.

 

We asked for a 5 week period till settlement. We also got our building insurance in place from when the cooling off ended.

 

Finance is ideally in place but subject to finance is fine so long as vendor happy with this.

[Toni]

Unless you have "cash" then I would always put the subject to finance clause in. If anything happens and the bank gives you the wrong info and you then can't go through with the contract then you may lose your deposit and the banks always have their "out" clause where they are not liable.

[Guest Guest75]

Unless you have "cash" then I would always put the subject to finance clause in. If anything happens and the bank gives you the wrong info and you then can't go through with the contract then you may lose your deposit and the banks always have their "out" clause where they are not liable.

 

Totally agree with Toni- wise advice.

[Guest Guest75]

 

Finance is ideally in place but subject to finance is fine so long as vendor happy with this.

 

"Subject to finance" is standard here,vendors are used to this as are the agents......

[snifter]

"Subject to finance" is standard here,vendors are used to this as are the agents......

 

Yes I know that's why I said 'ideally'.

 

We discovered that pre approval can sit and languish for weeks as it's not a priority for them and so on advice of our amazing broker put offers in without it. When we had one accepted the bank got to work approving.

 

I do know that a fair few properties we looked at recently, the agents did ask if we had finance in place already. One agent we got to know quite well said the number of people with subject to finance who then failed to get approval after an offer was accepted was increasing and a concern. If it had been one or two agents I'd have maybe not thought more about it but it was a fair number and in different areas.

[cormcvcr]

We have just purchased and put offers in on a couple of properties before landing lucky with this one. Our broker told us that you should always tick the finance box anyway just in case the property you are going for doesn't meet the value of the mortgage, that way you aren't locked in, you can still walk away at that point. ie. say the property is being sold for $500,000 and you are paying 10% deposit, which means you need a mortgage of $450,000. The bank check it out and the value of the property only comes back at $390,000 they won't give you the mortgage for the whole amount, which means you need to find the remainder of the cash yourself or walk away and by ticking the finance box even if you do have your finance pre-approved it allows you to do this.

 

This is an extreme case, but it can happen and better to be safe than sorry. It has obviously happened at some point otherwise it wouldn't be advised.

 

On a good note, how exciting for you!!

 

Good luck and happy hunting

[Andrew from Vista Financial]

Hi

 

Totally agreed with what others have said in relation to making an offer subject to finance, we always recommend this to our clients. We also recommend making it subject to a building/pest inspection.

 

In relation to Pre-Approvals, it is not a requirement to have one in place to make an offer but I would definitely recommend it for a range of reasons.

 

Snifter from what the Agents have said to you about those Pre-Approvals, I would bet that these are not real Pre-Approvals and what I mean by that is that they have been given by the computer only and not manually assessed, some banks/lenders give Approval very quickly (sometimes on the spot) however they are subject to almost everything in other words not worth the paper they are written on.

 

If getting a Pre-Approval best to get one that is manually assessed and subject just to security being a suitable property, we have never experienced a situation where a manually assessed Pre-Approval has been declined.

 

 

 

G'day all,

We are currently going to house ' Opens' with a view to purchasing a property soon. What is the process for making an offer? Can you talk to the real estate agent at the open and make a verbal offer or do you have to make a written offer?

Any advice greatly appreciated.

Thanks in advance.

DonLou

 

To answer your question, a formal offer will have to be done in writing eventually however it can be possible to discuss/negotiate verbally in the first instance with some Agents (other insist any offers are done in writing) so that you can get a feel for what the vendor may accept, we have done this with 2 properties purchased here.

 

KR

 

Andy

[jim and adel]

The advice of almost everyone who knows their way around would be to always tick the 'subject to finance' box regardless of whether or not you have the finance in place.

[Keith & Linda]

Your offer to buy and contract are one of the same, your offer price is part of the contract, this offer price might get crossed out and changed several times until an agreed price is reached. You can make the contract unconditional or subject to, - finance, building and pest inspections are the usual 3, and there is a time limit set on these 'subject to' clauses usually seven to fourteen days, after which the contract becomes unconditional. A completion date is also set at the time of offer/contract and this again is usually 28 days but this can and does vary.

 

I did once have an offer/contract on a property I was selling, it was from someone who worked in a solicitors office, and they put in 'subject to due diligence' whilst never experienced before by the estate agent, it turns out to be a basic get out of anything clause by the buyer, sure enough the 2 weeks later "sorry but after due diligence we will not proceed with purchase" so in effect this is good for the buyer to include but not so reassuring for the seller.

[donlou]

Hi guys,

Thanks to everyone for the replies, interesting reading and some good advice. Yes it is exciting too, SA will feel more like home when we have one !! Cheers everyone x

[jtct]

It can be quick too. We landed on 5th October (2011) - went to about 40 opens and put an offer in on our house 2 weeks later - we moved in 1 month later, bought lots of new stuff and the rest of our furniture arrived from the UK on Christmas Eve!

 

We stayed with our daughter for most of the first month apart from a week in The Fleurieu to give them a break and luckily their shed was big enough for all our purchases.