Recently put in an offer and been knocked back? Even though it was at the top of the price guide…
With the current state of the property market you may have noticed that some homes are being snapped up so fast they’re selling within the first 2 weeks – some before you’ve even had a chance to inspect the property! From our recent discussions with buyers many are feeling confused as to why their offer has been rejected, and in some cases they’re not even able to put one in. We break down what you need to know about putting in an offer and some tips on putting yourself in the best position to secure your dream home.
The ‘offer’ process.
In a sale by private treaty, agents are obliged to present all offers to the seller all the way up until contracts have been exchanged, including verbal and written offers. However after a seller has accepted an offer AND contracts have been exchanged, both the seller and buyer with the chosen offer are legally bound to continue with the purchase. Beyond this point agents are unable to entertain or present any further offers, even if it’s higher than the accepted offer. This is why you might have been told ‘no’ if you’ve asked to submit an offer.
So, what does this mean for buyers…
If you want to be a strong contender to put in offers that get accepted, you need to have a thorough and confident understanding of your financial position and potential special conditions. Having previously discussed with a mortgage broker and conveyancer or solicitor can help give you clarity to which properties you are able to put in strong offers for.
This knowledge can help you be prepared for private inspections and open homes as soon as you see the listings pop up and be ready to make a move fast. If you want to secure the home before the competition, seeking a copy of the contract and getting it reviewed by your solicitor or conveyancer can speed up the process of presenting your offer to the seller and their agent.
Attending the first open house can not only help you scope out the competition for the property but ask the agent questions that may help solidify your offer. Asking the agent about the seller’s motivation and requirements for selling (such as settlement periods) can potentially help align your conditions to meet their needs, putting you in a higher position to have your offer accepted. Every vendor has different reasons for selling – and depending on their needs price isn’t always the deciding factor.
And what about sellers…
Yes, it is amazing if your agent has managed to sell your house in the first week of being listed *but* you shouldn’t compromise the best potential offer for a quick sale. Buying is huge and for many people in the market being able to inspect a home, decide it’s the one, organise their finances/conditions and come forward with a solid offer within a week or two just isn’t a reality.
It’s crucial for your agent to understand who the likely buyers for your home are – if they’re families their movement through the sales process is going to look different than if your likely buyers are investors or first home buyers. And your home’s campaign and sales timeline should be reflective of the likely buyer to get the best potential offers.
Your agent should have a clear understanding of your expectations and needs of the campaign to build a sales process that is focused on your success instead of their sales targets. Throughout the offers and negotiation stage, your agent should be transparent about the risks and potential pitfalls of presented offers, so you feel prepared to make an informed decision on the offer that works best for you. Not only can this make the process of selling easier for you as the client, but agents can also inform buyers of your potential conditions and negotiate accordingly.
Whether you’re a buyer or seller the process of making, receiving and negotiating offers can feel quite overwhelming – it’s a big life changing decision! So, you should expect the agent to handle the situation with care and be working to achieve a great outcome for both parties. A friendly, engaging agent will usually make the sale go smoother, easier and less stressful, so work with the agents and make sure you are ready to put your best foot forward.