Make an offer if the property is for sale by private treaty

Make an Offer

Make an offer if the property is for sale by private treaty (If purchasing through auction please go to step 5). Also note that if purchasing through a Self-managed Superannuation Fund other steps will be involved. For more information see Quick link to Self-managed Superannuation Fund section of web site.

Once the contract has been given the thumbs up by your legal representative you can then make an offer. In most cases you would obviously make an offer that is less than the listed price. The offer can be made verbally or in writing and is conveyed to the real estate agent. The real estate agent is compelled by law to pass the offer on to the vendor. Once negotiations are complete and you have come to an agreement on the price, in New South Wales you have available two courses of action:

1. You can leave a holding deposit of 0.25% of the purchase price (or whatever amount is agreed upon with the agent) and not sign the contract. This is a verbal agreement and you run the risk of being gazumped. The real estate agents are within their rights to sell the property to a higher bidder if you have not signed a legally binding contract of sale. The upside to this course of action is that you can pull out of the sale and get your holding deposit if required. Upon verbal agreement to purchase a property you should then carry out step five.

2. Sign and exchange contracts immediately pending a 5 working-day cooling off period. Under this method you will still need to leave a deposit of 0.25% of the purchase price but this amount is non-refundable if you decide to pull out of the purchase. The upside is that the property is secured and cannot be sold to any other purchasers. During the 5 working-day cooling off period you will need to complete everything outlined in step five, including pest and building inspections and attaining formal loan approval. Achieving all of this in five days is usually quite difficult. The reason for this is that there may be delays with bank valuers and building and pest inspectors gaining access to the property (especially when the house or unit is rented out as opposed to being owner occupied). For this reason it is recommended that you negotiate an extension of the cooling-off period before signing the contract.

The most appropriate course of action for you should be decided after discussions with your legal representative.