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How to make an offer on a property

Making an offer is one of the final steps towards owning your first home. It may seem complicated, but once you understand what’s involved, you’ll feel more confident about negotiating the best price for your new home.

The process of making an offer can vary between states and territories, but usually involves the following six steps.

The vendor (or seller) must have a contract of sale prepared and available for inspection before offering a property for sale. The contract usually includes:

  • A zoning certificate from the local council
  • A copy of the title to the property as recorded in the Land Titles Office
  • Copies of documents outlining other registered interests over the property.

After several inspections of the property and discussions with the real estate agent or vendor, you can ask for a copy of the contract and review it with your solicitor or conveyancer to ensure it’s acceptable.

Next, put your offer in writing to the real estate agent. This should include how much you’re willing to pay, any conditions such as repairs or deposit amount and a timeframe for moving in. Your solicitor or conveyancer will help you prepare a letter of offer for the property you want to purchase.

Your expression of interest will be passed onto the vendor and they will respond, kick-starting the negotiation process. You may be required to pay a holding deposit at this stage, to prove that your offer is serious.

The vendor can receive expressions of interest from other people and even exchange contracts with them if they can get a better deal. If this happens, your holding deposit is refundable. It’s a good idea to ask if anyone else has made an offer on the property, to assist your negotiations.

Once you have agreed on a price with the vendor, you will need to exchange contracts and pay the full deposit, which is usually 10% of the purchase price. Your home lender and solicitor or conveyancer will support you through this process.

You’ll need to arrange for home insurance at this time, as you are the owner of the property from the date contracts are exchanged. Your contents insurance can begin from the time you move in. If you’re buying a unit, you’ll need to arrange a Certificate of Currency from the Body Corporate’s insurer, to make sure the property is adequately covered.

In most states, there is usually a cooling-off period after contracts are exchanged, except when you buy a residential property at auction. During the cooling-off period, you can cancel the contract but you may lose your deposit. It’s important to check with your solicitor or conveyancer about whether a cooling-off period applies to your contact before you sign.

You should also check the property during this time to make sure the condition of the building and inclusions are as per the contract.

Settlement time is determined by the vendor but can be negotiated. Usually it’s around four to six weeks. This is when you pay the balance of the property using your home loan, including Stamp Duty. You’ll then receive the keys and title deed to your new home.

Tips for making an offer

Before you sign on the dotted line, keep these things in mind when making an offer on a home:

  • Making an offer on a property sold at auction is a different process and requires a calm and experienced approach. Talk to your home lending specialist by making an appointment online, by phone on 13 2224 or at your closest branch, to see what you need to have prepared before the big day
  • If you’re buying off the plan, there may be additional factors to consider. Talk to the developer to get a good understanding of the process and discuss with your solicitor or conveyancer before making an offer
  • Get conditional pre-approval so you have your finances in order and know exactly how much you have to spend
  • Know how much you can borrow and work out a negotiation strategy to make sure you stick to your budget
  • Research the market and look at comparable property prices in the area to help you negotiate a good deal. Download the Property Guide app.
  • Get your own building and pest inspections completed before you exchange contracts
  • Remember to be patient—don’t feel rushed into a purchase by an agent without good reason.

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