Missing out on a property that you have your heart set on can be a very disappointing experience. Quite often this happens because the offer process is misunderstood. When making an offer to purchase a property, it is important to be aware of the following:
- The agent will submit all offers to the vendor.
- The property remains on the market while the vendor considers all offers. Just because your offer is the first one submitted, does not necessarily mean that it will be accepted.
- You can include a date by which it will lapse if not accepted.
- An offer may be made subject to a finance clause, i.e. bank approval, or builders report
- You can make your offer conditional on certain items (such as a dishwasher) being included or excluded from the contract. Any special conditions such as these must be written into the contract.
- A contract must contain details of the property, the price, deposit and settlement terms.
- Once the offer is made in writing, it is then up to the vendor whether or not to accept it or whether to give other parties the opportunity to increase their offers.
- The agent is not obliged to give you another opportunity to increase your offer.
- The vendor is under no obligation until they accept the buyer’s offer by counter-signing the contract.
- An offer is not binding on both parties until the buyer and seller have agreed to the contract, and the acceptance of the offer has been conveyed to both parties.
Once you and the vendor agree on all conditions, they are signed and all changes initialed, you have made a conditional agreement.
An unconditional offer is a straight offer to buy the property, with no conditions.
Or an agreement can become unconditional when all the terms in a conditional offer have been met.
What are conditions?
When you are buying a property, it is common to add clauses to the standard contract. These are called “conditions” and they deal with specific issues relating to the particular property.
The most common conditions include:
- Mortgage finance being arranged
- A satisfactory title search
- A satisfactory builder’s or specialist’s report
- Date of settlement
Once these conditions are satisfied the agreement becomes binding, and the deposit (generally 10%) must be paid.
