What happens when you put in an offer?

In regard to what’s happening on the other side while you’re obsessively refreshing your phone, it changes with every sale. It could depend on:

• How many offers have been made
• What the market is doing
• How closely your offer aligns with the seller’s expectations

The agent will collect all the offers and present them to the seller, along with recommendations. These recommendations are based on what’s happening in the market and what the feedback is from people attending open homes (you know those calls you’re getting on a Monday from agents? That’s them seeking feedback so they can advise the seller).

Note: it is always the seller’s choice whether to accept an offer. Sometimes we’ll suggest they take an offer because we believe it will be the best they’ll get, and the seller will choose to hold out for a few weeks to see if something else comes in.

If the offer isn’t high enough, or if there are multiple offers, the agent may then begin negotiations, inviting you to increase your offer. We’ve got some negotiation advice here.

If you’re successful:

Then you commence with the champagne, calling everyone you know and getting a solicitor.

If you are unsuccessful:

• The agent can’t give you details about the winning offer. Legally, they can’t. Pretty much every buyer asks us this and every time we have to say no. Once the property has exchanged, the sale price will be published on Allhomes.

How does market activity affect my offer?

When the market is hot and there is a tonne of buyer demand,  we have seen 2-week on-market campaigns where offers are requested by a day and time, and all these offers are presented to the owners for a swift decision. Buyers may not be given the opportunity to negotiate and the best offer win.

If market is cold and yours is the only offer, things may be different. If your offer is under the listed price and it’s early on in the campaign, the owner might decide to keep the house on the market for a few more weeks to obtain more interest and a better offer from someone else

What does a seller take into consideration when looking at offers?

The seller will usually take into consideration:

• The sale price you’re proposing
• The settlement period you’re proposing
• Whether or not you have pre-approval for your finances. When your finance is still pending, the sale may fall through and the seller might prefer an offer that is for less money, but is a guaranteed sale, such as a cash buyer.
• Any additional conditions you may have proposed (e.g. subject to plumber’s inspection or subject to approval of pergola)

Sometimes, two buyers will put in the exact same offer. If neither buyer chooses to increase their offer, the seller may flip a coin, or they may ask for more information about the buyers and choose the buyer they resonate more strongly with. Some sellers prefer to sell to first home buyers rather than investors if the offer is identical, because they relate to the challenge of getting into the market.

Another situation that could occur is the seller accepting both offers and consenting to the issuing of two contracts. In this case, the first buyer to sign the contract, pay their deposit and get their finance unconditionally approved is the eventual buyer for the property. So, it definitely pays to have pre-approval in place and a great broker and solicitor ready to work for you. The agent will let you know if this is the situation you’re in.

Tips for putting in an offer

• Always, always, always put it in writing
• Ask the agent when you’re likely to hear back
• Check with the agent prior to submitting your offer whether or not there are any conditions outside of price that will make your offer more appealing to the seller
• Make your offer compelling. In a high demand market like Canberra, you’re competing against other buyers, not the seller. If you offer well below what you’re prepared to pay, and others buyers are offering more, you may be left out of the negotiations.

Honestly, this is why I love an auction. All the buyers are in the one room, the negotiation is out in the open and the highest bidder wins. It’s a much more transparent way to purchase a home.

Good luck with the application, mate. I hope you get an answer soon.