I will show you how to make an offer on a property, and also some really important things to consider when making an offer. Making an offer is really important, and crafting the right offer is important, so you don’t pay too much, and so you get the terms that you want on a property.
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The 3 Ways You Can Make An Offer On A Property
Firstly, what are the three ways you can make an offer on a property? This is the nuts‑and‑bolts, how do you actually do it?
1. In Person
You can verbally make an offer. You can be inspecting the property, or call the real estate agent, or pop into the real estate and say, “Look, I want to make an offer on the property, I want to offer X amount of dollars.” Say, $300,000 on the property.
You can do that verbally, which will then get passed on to the owners. Now obviously, there’s nothing in writing there. Whenever you’re making an offer, you’re not tying yourself into a contract and you are not saying “I am going to purchase this property if you accept this offer”, the contracts and things like that come later. So you can make it verbally.
2. In Writing
Number two is in writing, you can do this on a piece of paper. You can write a formal document and hand it to the real estate agent. You can write it on a napkin or even write the digits on your phone and just show him your screen. Some people don’t like saying it out loud, so they want to do it in writing. That’s another way to make an offer on a property.
3. You Can Make An Offer Online
You can make an offer even through the forms on realestate.com.au, or domain.com.au, where it says “Contact the agent.” You can make an offer through those forms, or you can send an email online and make an offer through emails as well.
I have done this before and had offers accepted. Some properties I didn’t end up buying, but I have had offers accepted through making an offer on the form on the real estate site. So it can be done. Not saying you should only use that strategy, but you can do it if you want to.
Important Things To Consider When Crafting Your Offer
What are some important things to consider when making an offer?
Price is not everything. There are a lot of things you need to consider when making a property offer, and you need to craft an offer that benefits you and benefits the owner who is selling to you as well. So you both want to agree on something that is beneficial to both of you.
Obviously, you need to consider pricing, and how much you want to offer for the property.
You also want to consider how much of a deposit you are going to put down. Are you going to put down the standard, which is about 10 percent, before the contract closes? Well, you can actually change that. Maybe you only want to offer a 5 percent deposit, or even less.
Standard cooling‑off period is around 7 days. You can extend that to 14 days, or you can make it however long you want, if you craft it in your offer. If you need a full month to do your due diligence, or maybe you just need two weeks, you craft that into your offer and say I want to make this offer, but I want the cooling‑off period to be 14 days.
You want to think about as well. Maybe you want a 30‑day settlement. Maybe you want a two‑week settlement. Maybe you want a 90‑day settlement. Settlement date is negotiable as well. So think about when you want to actually take over the ownership of the property and settle on the property.
Early Access To The Property
Early access is also something to consider. If you’re going to be renting out this property and you want to do some renovations to it, why not have a 30 or a 60‑day settlement, but gain early access to the property, especially if it’s vacant? You can then go in before you even own the property, and do the renovations. Paint the walls, fix up the garden, do what needs to be done before you actually take ownership. Then as soon as you own the property, you can then rent it out and all the work is done.
Your due diligence, you want to look into as well. You want to have time to do that, which is what the cooling‑off period is for. But you can’t actually put clauses in your offer to say that my offer and my deposit are refundable if the due diligence isn’t to my standard.
The Ability To Withdraw Without Losing Your Deposit
That brings us into the ability to withdraw without losing your deposit. In a lot of cases, if you withdraw from a standard property contract, you will lose your 10 percent deposit, but you can put it in the contract and in your offer, that I have the ability to withdraw at any time without losing my deposit, or if the due diligence doesn’t meet my standards, and you can make it ambiguous, so you can just decide that it didn’t meet your standards.
You can put that in the contract. So the property has issues, or things don’t work out, you can make it subject to finance as well. So if those things don’t work out, you can pull out and not actually be out the 10 percent you put down, probably just the small deposit you put to start the cooling‑off period.
And you also want to think about any other miscellaneous terms that you may want to get involved in that.
I hope that has given you some insight into how you can actually make an offer on a property, whether it’s verbally in person, in writing or online. Then you should now be aware of some of the important things to consider when you are making your offer on that property that you’re purchasing.
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