THE GUIDE TO BUYING A HOME
Step 8 – Negotiating and Making an Offer
You will need to submit an offer to your agent who will then pass your offer onto the vendor (the person selling the home). The vendor may choose to accept the offer or negotiate with you by way of a counter offer. An offer is not legally binding on both parties until the buyer and seller have agreed on a price and then signed the contract of sale.
It is important to be aware of the following:
- The real estate agent will submit all offers to the vendor
- The property remains on the market while the vendor considers all offers (just because your offer is the first one submitted, does not necessarily mean that it will be accepted)
- Your offer may include a date by which it will lapse if not accepted
- An offer can be made subject to meeting certain conditions. For example - subject to finance or the sale of an existing property or another consideration such as a builder’s inspection
- You can make your offer conditional on certain items being included or excluded from the contract such as an extended settlement period or lower deposit amount. Any special conditions such as these must be written into the contract
Use the negotiation process to discuss and include changes you may want to make to the contract. Ensure that you advise your Solicitor so that the contract can be altered to reflect the agreed changes.
Paying the Initial Deposit
Once the vendor has agreed to your offer, you will often be asked to pay an initial deposit (usually $500) as a ‘good will’ gesture. Deposits vary depending upon which state your home is in.
The real estate agent will advise the vendor’s solicitor/conveyancer of the purchase price and your details. They will enter in the all parties details and prepare the contract ready for all parties to sign and exchange.
Just because you have paid an initial deposit does not mean that you own the home. You can still be gazumped (which is when another buyer comes in and purchases the property for a higher price than what you have offered). You own the property only when you have signed, exchanged contracts and have paid the minimum deposit required under the contract.