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| If you're thinking of buying, make your first offer reasonable. |
| Dated : 19 August 2008 |
If you are in the market to buy a new home and have found a place you like, then make sure your first offer is a good one.
Properties are selling slowly in the current market, but even so many sellers are in a position to wait a while and won't settle for a silly price. Even in the current market sellers are looking for serious purchasers.
If a property has been listed in the last couple of months, then any competent real estate agent will have discussed the appropriate price range with the owner and advertised it as such. While there can be exceptions, this general price range is usually a pretty reasonable reflection of the current market.
If your offer is unrealistic, chances are the sellers will simply walk way. There is always the opportunity to renegotiate and to present a subsequent offer to the sellers, but take care not to lose your opportunity to a more determined buyer. It's fine to try and save money, but don't lose the house in the process.
Once a purchaser and seller agree on terms for a property sale, they each sign the sale of contract. This becomes a binding agreement when the purchaser is informed that the seller has signed and accepted the written offer.
The sale contract includes the agreed selling price along with any conditions that might apply, such as finance approval. The commonly used contract in WA is the Offer and Acceptance document produced by the Real Estate Institute of WA.
Before the seller accepts a purchaser's written offer, bids may be still be received from other potential buyers. At this point, the seller can consider all offers at the same time and may choose to negotiate with only one of the parties.
The selling agent is required to present a purchaser's offer to the seller as quickly as possible. But the selling agent is also required to inform the seller of any other offers that are likely to proceed. The seller is not under any time constraint to reply to an offer, but the buyer can place a condition that sets an expiry at a specified time and date.
Ideally, a seller wants a quick sale, for the highest price, with the least number of complications. The 'dream offer' from a seller's perspective is an unconditional cash sale at the full advertised price. Few buyers are in a position to meet these conditions, but this example highlights the two most important factors that make up an offer to buy a property: the agreed selling price and the conditions applying to the offer.
So, it's wise to do your house-hunting homework, organise your finance early, be confident and give it your best shot.
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