Tips on how to make an offer on a property and improve your chance of success
We’ve been trying to buy a project in Queensland.
In the past three weeks, we put in three offers and we’ve missed out on every one.
It’s pushed me to go back to first principles and make sure, that the way the offer is being submitted is placing us in the best position possible to get the property.
1. The Buyer With The Most Information Wins
“ the buyer with the most information wins.” Melanie MacDonald
It’s SO true.
Before you even think about making an offer you want to know as much as you can.
Learn about the sales history of that property, the vendor and the competition.
How long its been on the market?
Has it had any offers?
Why has it not sold? etc…
You need to know what every comparable property in the area has sold for. You need to go in there with your eyes wide open.
And you DO need a paid data service to give you information on sale prices of comparable properties.
2. Make Friends With The Selling Agent
The second of my tips on how to make an offer on a property.
Build a rapport with the agent. It will place you in a better position to actually get the property. You’ll find that he or she will share little snippets of information. That can help you in terms of getting an edge in the negotiation.
People want to sell to people they like. Work on that relationship, with contact, coffees and compliments. Then hopefully you place yourself in the box seat for being the one the agent wants to sell to.
This is how I have been successful for quite a lot of property purchases.
With our current purchase it’s quite difficult because we’re working at a distance.
If you’re local and you can meet face to face, it places you in a much stronger position.
3. Make Sure Your Competition Is Real
If an agent tells you that they’ve had offers on a property, ask one simple question. “ Were those offers in writing? “
If they’re not in writing they’re not real offers.
Talk is cheap and there’s a big difference between a written and a verbal offer. Then existence of other offers can have you feel pressured to go higher than you’re planning. Make sure you are competing with real offers.
Which brings me to the next point,
4. Make Sure You Put Your Offers In Writing
You can make an offer, either by having a letter of offer or having a signed contract. Make sure you work with your legal representative and make sure you have completed your due diligence and are covered legally and financially before you put any offer in.
We often submit offers with a signed contract, and a cheque for a deposit.
It’s saying you mean business and it can put you in a position of strength even when the offer is not the highest.
5. Don’t Make The Vendor Jump Through Hoops
Now this means, limiting the conditions you’re putting into the property to what’s absolutely necessary.
The more conditions you’ve put into the contract the harder it’s going to be for the vendor to actually say yes to your offer.
This doesn’t mean exposing yourself to risk .Try to cover off some of your concerns before you put in your offer.
For example, get that due diligence done before you put your offer in. Then you can make a much stronger offer.
One condition, every contract should include, particularly in light of the recent Royal Commission is a subject to finance clause. Getting finance has become challenging for many buyers so you need to be cautious.
6. My Final Tip On How To Make An Offer On A Property? Treat Buying Like A Numbers Game
Don’t get too emotionally attached to the property. I know sometimes that’s hard. But as you get more experienced it will become easier. And so basically you put your offer in, if it doesn’t get accepted and someone else’s does, then just move on.
Don’t go above what you know to be the right price for the property. That’s what will bring you undone.
“Opportunities are like buses – there’s always another one coming!” Richard Branson
Okay so they’re my tips on how to make an offer on a property for today. Have you got any really smart tips about how to get the edge in terms of putting an offering on a property. If you have, I’d love you to join in the comments below .