Every property purchase is unique, but there are some golden rules about when to make an offer<\/a>, according to one industry expert.<\/strong><\/p>\n Knowing when and how to make an offer is important. Picture: Realestate.com.au<\/p>\n<\/div>\n Director of Wakelin Property Advisory Richard Wakelin says knowing exactly when and how to make an offer can be the difference between snagging the deal of a lifetime and paying far too much.<\/span><\/p>\n \u201cThere\u2019s no one-size-fits-all, because every property is different. You need to approach it on a case-by-case basis, but there are some fundamentals,\u201d he says.<\/p>\n Wakelin says current market conditions and the sale methodology being used to sell the property influence the timing of any offer.<\/p>\n \u201cYou can buy at a\u00a0private sale, before an auction, by bidding at auction or have a negotiation after a property has been passed in at auction and naturally, these situations require different approaches,\u201d he says.<\/p>\n Despite the growing prevalence of auctions, especially in metropolitan areas, private sale remains the most popular sale method across Australia, so most buyers will engage in a private process, Wakelin says.<\/p>\n \u201cThe first thing with a private sale is to ensure there is an asking price attached to the property. It\u2019s the golden rule; never offer unless there is a price from the vendor,\u201d Wakelin says.<\/p>\n Next, potential buyers should ensure there is an \u201cauthority to sell\u201d in place with the agent, as properties can be listed with numerous agencies.<\/p>\n \u201cYou don\u2019t want to waste your time.\u201d<\/p>\n \u201cTo formulate an offer, use a direct comparison method, where you compare like to like, the same kind of property on the same land size, with the same style and condition of accommodation to the one you\u2019re looking at,\u201d Wakelin says.<\/p>\n \u201cAlways be aware of competing properties on the market, which provide you with the option of walking away, therefore setting yourself up in a position of strength.\u201d<\/p>\n Make sure you look at comparable sales in the area. Picture: Getty<\/p>\n<\/div>\n Establish the \u201crules of the playing field\u201d before making an offer too, Wakelin says.<\/p>\n \u201cHow is the sale going to be handled? Will the property go to the highest and best offer? If you start the ball rolling with an offer, will the agent give you an opportunity to match any other offers? Don\u2019t assume anything. Different agents handle sales in different ways, so you need to know,\u201d he says.<\/p>\n Now, it\u2019s offer time.<\/p>\n \u201cWhat you need to do is not go in too high. Use comparable sales evidence; that is sales of similar properties from the last six to 12 months; and make a realistic offer, leaving yourself room to negotiate upwards,\u201d Wakelin says.<\/p>\n \u201cIf you\u2019re going to make an offer, you don\u2019t want it dangling in the wind, so set a deadline and have an expiry time on it. And certainly don\u2019t make a further offer until there is a counter offer,\u201d he says.<\/p>\n Negotiate on settlement length, deposit amount and aspects of the contract of sale if required, Wakelin says.<\/p>\n \u201cI often recommend buyers cut the deposit they pay from 10% \u2013 which people just assume has to be paid, it doesn\u2019t necessarily \u2013 to 5%. Everything is negotiable.\u201d<\/p>\n \u201cThe most transparent way to buy property is at auction. When that hammer comes down, there is no question,\u201d Wakelin says.<\/p>\n Auctions remove any uncertainty about other interested parties, counter offers and what the market values the property at, he says. Sticking to a budget and removing the emotion are the keys at auction.<\/p>\n \u201cMy advice is only make an offer before auction if approached by the agent,\u201d Wakelin says.<\/p>\n \u201cIf you\u2019re being approached to bid before the auction day, you have to ask why that is. Is the property not going as well as the listing<\/a> agent thought? Or if the agent approaches you beforehand because they say there has been an offer, you can sometimes get caught in boardroom auction, which can be a bit cloak and dagger.\u201d<\/p>\n It\u2019s ultimately better to compete \u201cout in the open\u201d Wakelin says.<\/p>\n Property hunters holding the highest bid when a property is passed in at auction are in a great position, Wakelin says.<\/p>\n \u201cFirst, don\u2019t be taken inside the house! That\u2019s the vendor\u2019s property. You\u2019ll be unable to have a private conversation if you\u2019re with someone or make a phone call. It\u2019s easy to feel the pressure if you\u2019re inside the property,\u201d he says.<\/p>\n Instead, stay outside and point out the obvious to the agent; that the market clearly isn\u2019t there at the price the vendor wants.<\/p>\n \u201cRather than just making a further offer for no reason, say to the agent, \u2018give me a figure\u2019, as clearly the reserve is over-inflated. Ask for a more realistic reserve and negotiate from there.\u201d<\/p>\n
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<\/p>\nPrivate sale<\/h2>\n
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<\/p>\nAuction<\/h2>\n
Before auction<\/h2>\n
Passed in at auction<\/h2>\n
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Realestate.com.au <\/a><\/p>\n","protected":false},"excerpt":{"rendered":"