Buying Property

Things to consider when making an offer:
  • Do you need to obtain a LIM Report?
  • Do you wish to have a Builders Report?
  • If the property is a Unit Title, have you been provided with a Pre-Contract Disclosure Statement?
  • Is your finance offer from the bank unconditional? – (ie not conditional on a registered valuation or builders inspection?) if so, you will need to include a finance condition in any contract.
  • Do you have access to a 10% deposit or does this need to be discussed with the salesperson or lender?
  • Has a copy of the property title been provided?
  • Have you read the REAA Sales and Purchase Agreement Guide (link attached)?
  • If attempting to buy a property in a multi-offer situation, has the process been fully explained to you?

Strategies for Selling your Home

PRICED

Benefits
  • Buyers know what the seller’s expectations are and whether they house is likely to fit their budget.
  • Buyers who are conditional can make offers subject to these conditions.
Disadvantages
  • Property may be under-priced or over-priced – over-priced will not attract interested parties and under-priced may result in your property being under-sold!
  • It is unlikely you will get more than the asking price – this may be the case in multi-offer situations but unusual.
  • No time deadline to encourage buyers to commit.

EXPRESSIONS OF INTEREST

Benefits
  • No price so buyers don’t make a decision based on price when deciding to view.
  • Buyers who are conditional can make offers subject to these conditions.
Disadvantages
  • Buyers sometimes think the vendor price expectation must be too high otherwise a price would be advertised.
  • No time deadline to encourage buyers to commit.

AUCTION

Benefits
  • No advertised price so buyers don’t pre-judge based on price when making the decision to inspect or not.
  • Offers are cash and once signed, the property is deemed to be sold.
  • Deadline or timeframe for buyers to act quickly.
  • Element of competition which may result in the vendor achieving a sale price above his expectations!
Disadvantages
  • Buyers with conditions cannot bid.
  • Sellers may feel under pressure to make an urgent decision.
  • Buyers are only compelled to bid to the next minimum amount to hold the highest bid or if they have conditional interest but attend the auction, typically tend to only offer just over the last highest bid.

TENDER

Benefits
  • No advertised price so buyers don’t pre-judge based on price when making the decision to inspect or not.
  • Buyers with conditions to satisfy can make offers – this enables all buyers showing interest the opportunity to purchase rather than eliminating conditional buyers from the process.
  • Deadline or timeframe for buyers to act quickly
  • Element of competition which may result in the vendor achieving a sale price above his expectations!
  • Buyers don’t know what level their competition is at (unlike an auction which is a public event) – this may result in buyers offering at higher levels so they don’t miss out.
Disadvantages
  • Although an acceptable conditional tender may be agreed, the agreement could still not complete due to the conditions not being met.
  • Buyers may be uncomfortable with the process as they run the risk of paying a lot more for the property than their competition.