Property Negotiations- Make an Offer

Congratulations!You have found a property you like. You may, at this point, choose to take a copy of the contract to your solicitor. You can now make an offer on the property, either directly to the vendor or through an agent. If your solicitor has taken the contract you may choose to submit a conditional offer, subject to contract – which simply means that you are waiting for your solicitor to read through the contract and make sure there is nothing in it that is of concern.

Before making an offer, do your homework carefully and make sure the price is fair. Be clear about what is included in the price – generally anything fixed is included and movable items such as refrigerators or washing machines are not.

If you really want this property and there are other potential buyers interested, offering less than the asking price might result in disappointment, as the seller will likely accept the best offer. However, negotiation can result in considerable savings.

Discuss your intended offer with the agent, but always keep in mind that agents act for the seller, not for you. The agent’s job is to get the best price for the vendor.

You might be asked for a small initial deposit as an indication of your genuine intent. This does not necessarily secure the property for you. The property might remain on the market and the seller may consider other offers. The word ‘gazumping’ is used to describe the practice of buyers offering a higher price or more favourable terms after the seller has accepted an offer.

It is disappointing for buyers, particularly if you have paid for building and pest inspections, but in N.S.W., there is nothing to stop the seller accepting the higher offer (Gazumping), although there is an unwritten code of conduct that dictates that an agent should keep you in the loop if your offer was first off the rank.

One of our clients was Gazumped by a last minute higher counter offer from another interested buyers. The clients were devastated when the selling agent worked behind the scenes to secure this other offer.

Once contracts are exchanged, any accidental damage to the property may result in financial loss to the buyer, so it is imperative that you arrange property insurance to start from the date of exchange. Insurers will usually issue a cover note in response to a telephone request, giving you up to twenty eight-days to confirm agreement to policy terms and pay the insurance premium.

Make sure your solicitor has discussed the finer details of the contract with you and you have received satisfactory answers before you sign the contract of sale.

Well done Congratulations

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