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Making your offer more attractive in a Sellers market

Prepare – Do your research  

Deciding on what to offer first up can be difficult. Before you make an offer, make sure you  understand the value and growth of the wider property market, the suburb and  neighbourhood and the popularity of the suburb you are looking at buying into. By doing  your research you’ll be in a better position to judge whether the home has been priced  fairly and how much you are willing to offer

Prepare – Make arrangements to obtain pre-approval Talk to a mortgage broker or a bank today and get it sorted. In this type of market you do  not have the luxury of time so having this in place is a bare minimum. Being in a position  where you know your budget and can make an offer without a finance clause could put  you in the box seat. 

Prepare – Attend the open for inspection 

Attending the first open inspection for a property is important. This allows you to gauge the  level of interest – if it isn’t busy then the seller is much more likely to take up an offer. If  there are a lot of people, check to see how many are asking for copies of contracts or  asking about early offers. This should tell you what competition you’re up against and you  can set your offer accordingly. 

Strategy – Offer quickly 

If you found that interest in the property wasn’t hot, it’s tempting to delay putting in an offer  in a bid to make the seller desperate. However, your best bet is to get in early and  confidently, and set the seller a quick deadline to get back to you. This puts you in an ideal  place to negotiate. A reasonable response period to set would be about 48 hours, this  gives the seller time to decide but limits other buyers from getting in before you. 

Strategy – Offer a flexible close (If you can) 

ask the seller if they need a shorter or a longer settlement to best suit their needs. If you  are one of two or three competing offers but your settlement date perfectly aligns with the  owners requirements then this could be your edge. 

Strategy – Offer shorter settlement terms 

Alternatively, if the sellers are keen to move on, you could beat out other potential buyers  by offering to settle in the shortest possible time-frame. 

Again, discuss this with the agent, as they will be familiar with the sellers’ circumstances  and know if they are hoping for a shorter settlement. 

If the vendor is waiting on the sale to finalise their new property, offering a fast  settlement could make your offer more appealing.

Strategy – Offer to rent the property back to the seller The vendor may be in a hurry to sell, for personal or financial reasons, but at the same  time stressed out about where they’ll live once the sale is complete. 

By offering to rent the property back to them for six months or so, while they figure out  their future plans, you’ll stand out from the crowd as a sympathetic buyer who has  compassion for their situation. That little bit of extra time to gather themselves could be  priceless to the seller, so check with their agent if this is something they would be  interested in and consider including it in your offer. 

Strategy – Negotiate other inclusions in the purchase that  benefit the seller (pool table they don’t want to take) Is there a large outdoor dining setting on the deck, which the vendor can’t be bothered  moving to their new place? Or a cubby house that their children have grown out of, which  would be a pain to relocate? Perhaps offer to purchase it as part of the sale, and bump  your offer up to reflect this. 

If the seller is motivated by convenience, this type of inclusion could seal the deal, as it  earns them a few extra dollars and saves the hassle of removing the item. Ask the agent if there’s room to negotiate such an inclusion in the contract. 

Along with price 

Terms – Waive conditions – Inspect the property at a visit  (Don’t increase your risk.) 

Most offers are “subject to” certain conditions being met – this can include the buyer  securing finance, satisfactory building or pest inspections, or the sale of your current  home. By offering to waive one or more of these conditions, you could expedite the buying  process and may sway the seller towards accepting your offer over another of the same  amount. Of course, be sure to get expert advice before offering to waive any conditions, as  an unconditional contract can be very risky. 

Provide pre-approval letter with the offer 

Terms – Make sure you have a sizeable deposit Deposits are part of the purchaser’s commitment to the transaction. 

Deposits provide the vendor with a measure of assurance that the purchaser will proceed  with settlement of the contract. This is because failure to complete settlement puts the  buyer at risk of the deposit being forfeited, which happens when they act in compliance  with the requirements of the agreement in relation to deposit forfeiture. 

All too often people try to make their offer as enticing as possible by attaching a large  deposit cheque for 10 per cent of the purchase price. The flaw in this strategy is that most  people negotiate to buy a property subject to various conditions (pest and building report, 

sale of another property, finance, etc.). The power of attaching a big deposit is lost or  watered down substantially by these conditional clauses. 

You might as well put down a token deposit (for example $1,000) till the conditions are all  satisfied and then pay the balance deposit up to 10 per cent. 

Bonus – Offer an unusual figure  

Making an offer of an unusual amount (think increments of $500, $1,000 or $2,000 rather  than the usual $5,000) can help you secure a property. 

While this amount won’t be noticeable over the life of your mortgage, it could be the  clincher that seals the deal for you when buying through private treaty. The other prospective buyers will likely offer a rounded sum, but a seller motivated by  achieving the highest possible price will naturally gravitate toward the larger offer, even if  it’s just a few hundred dollars. Consider it this way: if someone else offers $800,000, and  you offer $801,500, who is the vendor likely to choose? 

Bonus – Make your offer personal. 

Here’s one thing to keep in mind: Sellers, especially if they’ve lived in a place for a while,  typically have a sentimental attachment to their home. While they certainly want to get top  dollar for the property, they often also want to know that their home is being transferred to  good hands. Including a personal note with your offer about how the home would be a  perfect place for your children to grow up, how much you love some of the design  elements they incorporated into the kitchen, or something else detailing why this would be  the perfect home for you could go a long way. 

Note: I’m not a lawyer, and this shouldn’t be construed as legal advice. Think of this  blog as general information and get a legal opinion if you need it.

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