Making an offer on a property
Once you’re ready to make an offer on a property, you’ll find there are two main types of sales: Auction and Private Sale
What happens at auctions
You are competing with other potential buyers. On the day of the auction, you will have to be registered as a bidder and express your interest by making your bids. If you make the winning bid, you will immediately enter into a binding contract therefore this is no cooling off period. You will be required to sign the contract and pay a deposit, which is generally 10% of the sale price. Talk to your real estate agent in advance on the formalities of paying your deposit should you be successful.
Here are some tips to help you prepare for Auction Day:
- Before auction day, make sure you have funds available to pay the deposit, should your bid be successful. The deposit is usually 10% of the purchase price. A cheque or Deposit Bond1 are common methods of payment.
- On auction day, register to bid. You can do this by contacting the agent prior to auction or as you arrive at the auction. If you prefer, you can authorise someone else to bid at the auction and sign on your behalf.
- Set your budget and know your limitations
- Make the winning bid!
- Pay the deposit and sign the contract.
- Advise your home loan lender of the property details. Your lender will usually want to conduct a valuation of the property before finalising your finance.
What happens in a private sale
You’re negotiating the sale price with the seller, generally via the real estate agent, so you can put forward your offer to show your interest. The process can take days or even weeks as it often involves a negotiation back and forth between you and the seller.
Once both parties agree on a sale price, you will be required to sign the contract of sale and pay a holding deposit. You may enter into a cooling-off period depending which state you are buying in, so it is important to check this with your solicitor to be sure you understand the conditions of the contract.
If you haven’t already done so, you may wish to use this time to conduct a building and pest inspection before the offer is finalised. After the cooling-off period, you will be required to pay the remaining deposit to secure the property purchase.
Things you should know
Credit criteria, fees, charges, terms and conditions apply. This information has been prepared without taking your objectives, needs and overall financial situation into account. For this reason, you should consider the appropriateness of the information and, if necessary, seek appropriate professional advice.
1Before purchasing a Deposit Protect Bond, check with your conveyancer or solicitor about the terms of the contract of sale as the acceptance of the bond is at the discretion of the vendor. Deposit Protect Bonds are subject to terms and conditions, full details of which are available on request. Fees and charges apply.