How do I make an offer?
You've found a property you want to buy, but how do you make an offer?
If a property is listed for auction, the vendor may be open to earlier offers, but the Auction Rules still apply, and it's unlikely that the vendor will accept any conditions (like subject to finance approval), unless there is little interest in the property.
If a property has passed in at auction, the auction rules still apply for three business days, then the property automatically becomes a private sale on the fourth business days after passing in at auction.
Some private sales are listed as Expressions of Interest. This means the real estate agent may have a particular form that you'll need to complete, to register your interest. Make sure your lawyer checks the form before you complete it, to ensure it is not legally binding (only a signed contract should be legally binding) and that there is nothing weird going on in the form - remember: the agent works in the best interests of the vendor, not prospective purchasers!
The real estate agent will advise you how you can make an offer. Some agents will accept an email summarising the terms of the buyer's the offer, which the agent will then put to the vendor. If the vendor agrees in principle, a contract will be filled in, to formalise the offer and for all parties to sign, to make it legally binding.
Sometimes the agents will not accept emails/SMSs and will only accept a contract signed by a purchaser, which then formally comprises their offer. This means the prospective purchaser will need to have signed a filled in contract, that contains all the details of their offer (price, settlement date, subject to finance approval etc), which the agent then presents to the vendor. If the vendor accepts the offer, they also sign the contract and it becomes legally binding. We strongly advise a purchaser to never sign a filled in contract unless it has been reviewed by their lawyer first, or unless it has a subject to satisfactory legal review special condition included.
There is no need to pay any deposit amount (regardless of what the agent says) unless the vendor accepts the offer first by signing the contract. If the offer is subject to finance approval and / or subject to a building and pest inspection, there is no need to pay the full deposit amount before the subject to conditions have been fulfilled. Usually up to $5,000 of the deposit is payable upfront, upon acceptance of the offer ($1,000 is sufficient for a property up to around a $500,000 purchase price). Then the balance of the deposit is promptly payable once the subject to conditions have been fulfilled.
After a contract has been signed by all parties, it can be almost impossible to amend it, or obtain documents missing from the vendor statement/section 32, unless all parties agree (regardless of what the agent says), so we strongly advise all prospective buyers to never sign a contract unless it has been legally reviewed first.
Note: the above is general information and should not be considered as legal advice.
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