Are you thinking of how to make an offer on a house Australia? If so, it’s important to understand the process involved in making an offer on a property. In this post, we’ll outline the seven steps you need to take to make an offer on a house in Australia. Plus, we’ll provide some tips on how to negotiate a fair price for the property.
1. Get Finance Approved
If you’re serious about buying a home, getting pre-approved is step one. Many buyers skip this step because it involves revealing personal financial details to a stranger who might become their lender. But banks are far less likely to deny you the opportunity of owning your own home if they know that they have access to your finances.
Most lenders usually require that you show you earn at least 3.5 times the amount of your monthly repayments, which you can do by showing them either three years’ worth of personal tax returns (with financial summaries attached) or four years’ worth of business taxation reports.
2. Research Properties in Detail
How much house you can afford gets determined by your income, credit history and the type of loan you have pre-approved for. Most buyers believe that a 30% deposit gets required to buy a property in Australia, but this isn’t always the case.
The more money you can put towards a deposit, either through savings or via a family gift, the greater the options you will have when looking for a property.
3. Finalize Your Shortlist
Before you begin your house hunt, make sure you know what’s important to you and list these features in order of importance:
- Size of block (Land size & Aspect – i.e: North facing or South facing.)
- Quality of fixtures and fittings (new or old)
- Type of home (Duplex, unit, townhouse, house, etc.)
- Condition of property (Newly renovated/modernized and to get renovated/modernized)
- Position of the home (for schools, shops, transport, etc.)
- Number of bedrooms and bathrooms
- Garage size (Number of car bays. If no garage, how big is the driveway? Is it double or single width?)
- Extras such as air-conditioning, heating, dishwasher and laundry facilities.
4. Find the Right ‘Fit’
Once you’ve completed your list, seek agents in your chosen areas and view properties that meet your criteria. If you’re buying a new home, it’s also important to find a builder who can construct exactly what you want within your budget. Don’t be shy about asking for quotes from over one company.
5. Decide on Your Offer
If you are considering medium to high-density housing, there will be a Development Application process before you purchase the site. Therefore, it is important that you understand how this process works and ensure that there are no risks or complications before committing yourself to buying a home off the plan. Make sure you familiarize yourself with the approval process and be aware of your obligations as a purchaser.
6. Make an Offer
This is the ultimate step in buying a property, but it doesn’t mean you can skimp on negotiations. There are several ways to make an offer – you can:
- Offer your desired price with a gem or stick in addition.
- Make a firm offer on the property and include a ‘cheque in the mail’ with the withdrawal of your offer if it’s turned down. Most people also known this as an option.
- Ask for a price concession or reduction from the seller, but only within reason. Be honest about why you are asking for a concession.
- Offer to buy the property ‘off market.’ This is when you approach a seller directly without their real estate agent knowing about it, however, make sure you do not breach any confidentiality clauses in your contract or you could be liable for heavy penalties. Remember, if you are dealing with an auction property, speak to your agent before you make an offer.
7. When Your Offer is Accepted
When you become the owner of a house is exciting, but it can also be a time when emotions run high and tempers fray. Ensure that both parties are clear on what you have agreed upon in writing before proceeding with the purchase, so there are no misunderstandings further down the track. Also, make sure you get your solicitor to check any amendments to contracts before signing them.