Learning how to make an offer on a property can be the key to success in today’s fast-paced real estate market. You’ve found your dream home, but so have a dozen other buyers.
How do you ensure your offer rises to the top?
As a seasoned buyer’s agent, I can tell you that the highest offer doesn’t always win.
Making a competitive offer is a refined skill, and I’m here to share my most effective strategies with you. These aren’t just theoretical concepts—they’re proven techniques I’ve used to help numerous clients secure their desired properties, even in the most challenging market conditions.
1. Understand the Vendor’s Circumstances
Knowing what motivates the seller is one of the most powerful tools in crafting a competitive offer. While the sales agent might not always disclose this information, any insights you can gather about the vendor’s situation can give you a significant advantage.
Vendors often have specific needs or constraints that, if addressed, can make your offer more appealing.
Here’s a real example from my experience:
I helped a client secure an acreage property by addressing a specific concern. The elderly vendor was worried about clearing out an old shed filled with years of accumulated items.
Our solution?
We offered to handle the clean-up ourselves after the sale. This thoughtful gesture, which had nothing to do with price, made our offer particularly attractive.
Sometimes, it’s not about the money—it’s about addressing the vendor’s specific needs. For example, I’ve worked with sellers who had financial difficulty and needed a quick sale. In these cases, offering a shorter settlement period met their needs and allowed us to negotiate a more favourable price for my client.
2. Streamline Your Offer
Another tip for making your offer more competitive is to limit the number of conditions attached to it.
A clean offer with minimal conditions signals confidence and readiness, which sellers find appealing. It assures them that you are unlikely to back out or request further concessions later in the process. Your offer will stand out even if the price isn’t the highest.
Most of the due diligence can be done beforehand.
For instance, you can do pest and building inspections prior to putting forward an offer. Yes, it will cost you upfront, and there’s a risk you do it, and your offer isn’t accepted. But it’s cheaper than putting down a holding deposit, often in the thousands.
The fewer conditions you put in your offer, the more attractive it becomes. The more conditions you add, the less inclined the vendor will be to accept your offer.
3. The 66W Certificate: A Powerful but Risky Tool
Signing a 66W certificate can make your offer competitive but has significant risks.
A 66W waives your cooling-off period in New South Wales. This means that once your offer is accepted and you sign the contract, you’re unconditional from that point on and must pay the full deposit (usually 10%).
It increases your offer’s competitiveness and demonstrates your commitment.
However, it also opens you up to more risk.
You need to be confident that your finances will be approved. Once you sign a 66W certificate, you’re fully committed to the purchase. You could lose your deposit and face other financial consequences if something goes wrong.
This is a strategy I might use when a client is a cash buyer. We’d get the pest and build inspection done first, do all the other due diligence, review the contract, and if everything stacks up, we can then go in with a really strong offer with a 66W.
I always recommend thorough due diligence and seeking legal advice before considering this option. While it can be a powerful tool in making your offer stand out, it’s not a decision to be taken lightly.
Additional Strategies to Strengthen Your Offer
1. Flexible Settlement Periods
The standard settlement period is typically six weeks, which can be adjusted. Shorter settlements of two or three weeks are attractive if someone needs a quick sale. Cash buyers can achieve this quickly since there’s no need to wait for bank approvals. Always check with your bank and conveyancer to ensure they can accommodate your proposed settlement period.
2. Sale and Lease Back
This arrangement can be a powerful tool in certain situations. Here’s how it works:
- You purchase the property from the vendor.
- The vendor remains in the property as a tenant.
- You can negotiate terms such as market rent, subsidised rent, or discounted rent.
An arrangement like this can be particularly useful for vendors who need to access their equity but aren’t ready to move out yet. It provides them with the funds from the sale while allowing them to stay in the familiar surroundings of their home for an agreed period.
3. Deposit Amount
While a 10% deposit is standard, there’s room for negotiation, especially for more expensive properties. For a $2 million property, a 5% deposit ($100,000) is becoming more commonly accepted. Consider that a large sum sitting in an agent’s trust account doesn’t earn interest, so a lower deposit could be beneficial, especially for longer settlements.
4. Considering the Human Element
Building a positive relationship with the vendor can be just as important as the terms of the offer itself.
Some vendors, particularly landlords, may have concerns beyond just the sale price. They might care about their current tenants and prefer to sell to another investor to minimise disruption. If you’re a property investor, highlighting this in your offer could give you an edge.
Remember, the goal is to create a win-win situation where both the vendor and the buyer feel satisfied with the deal. By understanding and addressing the seller’s specific needs, you can often find common ground that makes your offer stand out.
Conclusion: Making An Offer On A Property
Making an offer on a property is about more than just numbers—it’s about strategy and understanding. By learning what the seller truly needs, streamlining your offer, and using powerful tools like the 66W certificate when appropriate, you can put yourself in the best position to secure the home you want.
By applying these strategies, you’ll be better positioned to secure your desired property, even in competitive markets. Every property transaction is unique; what works in one situation may not work in another.
If you’re unsure or overwhelmed about crafting the perfect offer, I’m here to help. With my experience and personalised strategies, you can confidently put forward an offer that gets noticed—and accepted.
Contact me today for expert advice and subscribe to my newsletter for free monthly Central Coast market report.
