How to make the winning offer on a property

It’s easy to assume that price is the only factor that determines the winning offer on a property. But you may be surprised to learn that price is not the only factor. So how do you put your best foot forward? 

1. Research comparative properties

It’s important to strike a balance between what you think the property is worth and what the market is dictating. In your research, avoid getting too caught up on what the current owners paid for the property. The market has likely changed since then and the owners may also have improved the property. Instead, look at similar properties in the area that have sold recently and see what they went for, get a feel for the level of competition around the property (observe the number of people at the open home) and ask yourself a few key questions, like:

  • How badly do we want it?
  • Is it to live in or is it an investment?
  • How long do we think we will live here?
  • Is it in the school zone we’re after?
  • Are we looking for somewhere with potential for solid capital growth?

In terms of the last question, if the location is highly sought after, like a coastal property, you can be confident that it will grow in value, allowing you to be a bit more aggressive with your offer.

2. Ask the agent for a price guide

This will help determine where you position your offer.  For example, if you really love the property and are buying it to live in, you may offer somewhere in the middle as your first offer. But if it is an investment with no emotion attached to it, you could make an offer at the lower end of the guide. The mentality around buying to live versus buying an investment property is very different. We have seen people miss out on their absolute dream home for the sake of a few thousand dollars, only to end up having to pay even more 3 months or so later.

3. Put it in writing

To ensure your offer is taken seriously, ensure you put it in writing. Don’t just call the agent and tell them verbally. By law, all written offers must be presented to the owner. Verbal offers do not. A written offer also shows how serious you are.

4. Flexible terms can be enticing too

A good deal to an owner isn’t just about the price. Many are interested in good conditions of sale too. It’s about striking a balance between the two. Terms may include being flexible on the length of settlement or waiving the cooling off period. 

5. Having your finances in order

Having your finances in order puts you at a huge advantage. Ensure you let the agent know that you are ready to buy when presenting your offer, meaning the sale is not subject to finance approval or the sale of your existing property. If a seller is faced with two offers and one is subject to finance approval or the sale of a home while the other is not, then it is naturally very appealing to go with the qualified buyer, even if their offer is slightly lower.

6. Include a time limit with your offer

This tactic is less common but there are times when it can be useful as a means to create a sense of urgency. An example where this could be used is if there is uncertainty around what a property will go for. Including a time limit with a strong offer could be enough to clinch the deal.

7. Write a letter

For some sellers, it is important that their much loved home goes to someone they like. You could write a letter with your offer for the agent to hand to the vendor, explaining what you love about the home and why you want to buy it. Just be careful not to give all your cards away as this could lead the seller into thinking you’ll be willing to pay anything to secure it.

7. Help the agent help you

Maintaining open lines of communication with the agent will help them provide you with the best possible advice to secure the right property at the right price. While an agent works for the seller, it is in their best interest to help their buyers too.

Post by ShelMarkblog 28 Jan 2022 0