How to buy a house steps - Are these correct?

[eyogina]

Hi
Although there is so much information on this forum, thank you, I just wanted to ask for feedback/confirmation if I have understood the buying process correctly.
These steps are based on a pre-approval for the loan.

1. Verbal offer to the Agent that you are interested at $x
2. REA gets you to sign a 'Section 32' agreement. In that document you ensure that your particular clauses are included (eg: subject to building/pest inspection and subject to unconditional finance approval). You can also stipulate that you require 'x' amount of days for this? At this point in time you must put a 0.25% deposit.
3. You initiate the inspections and confirm your finance
4. REA will draw up a contract
5. You engage a lawyer/conveyancer (if you wish) to review the contract
6. If happy you sign
7. Exchange $$ within the settlement timeframe, as stipulated in the S32.

What am I missing?
Cheers

 

[Raddles]

Hi there
I would actually put getting your finances in order first - as you can't go shopping until you do.
All offers should be in writing - not just verbal.
As you are in Victoria - you will get your disclosure statement which is the s.32 - and yes make sure the contract is subject to the inspections you want and to have the finance confirmed (as you can see on the forum - an initial offer of finance can be pulled if the particular property does not stack up on a valuation).
Yes the real estate agent draws the contract - and if you have any special conditions - have your solicitor/conveyancer check it before you sign.
thanks

 

[man of action!]

The only thing(s) I'd add are:

Why bother with a verbal offer? It's not even worth the air it comes on!

Once I've decided this is a place I'd like to own, I always let the REA think I'm interested at the full asking price even though I've never said as much!!

When we go back to the office to write up MY offer (which always turns out to have a number of my conditions and escape clauses) they usually verbalise what they write and when it comes to the price, they'll say something like "$350,000, is that correct?" To which I reply something like "What? No! Put down $312,850".

This usually stuns them for a few moments and wipes the smile of their face.

The result is they need to go on the defensive as they think they are about to lose a sale that a few seconds ago was "in the bag".

From there, there's usually banter about "The vendor wont accept that" or more often "I can't take that to them" and so on and that's where the real fun begins!

Also, you don't put clauses in the S32 - you put them in the offer - or Contract of Sale doc.

Finally, you speak with your solicitor well before you consider making any offers and be sure to discuss how to word those clauses.

Good luck.

 

[twobobsworth]

When we go back to the office to write up MY offer (which always turns out to have a number of my conditions and escape clauses)

Was this on a property in NSW or VIC.

I'm yet to know of someone who has been able to have a "subject to finance clause" or escape clauses added to a contract in NSW beyong the cooling off period.

 

[lostis]

The only thing(s) I'd add are:


From there, there's usually banter about "The vendor wont accept that" or more often "I can't take that to them" and so on and that's where the real fun begins!

What does one normally say when a the agents tries to explain that your offer is too low?

Is there a way for which we can be sure that the offer was actually given to the Vendor?

 

[FHB]

I'm in QLD, so it may be a little different up here, but I'd add pre-settlement inspection the day before settlement.

Also just a tip, I'm finding contracts are being accepted for less money if they are unconditional. Motivated vendors are liking quick and easy sales. Its easier if you can get the builder to come through with you before submitting an offer, and you know finance will not be a problem.

 

[attrill]

You know that the vendor has seen the offer when the agent comes back with their counter offer written on the contract.

It's great to see the agent's face when they get the low offer. After all, they have been telling the vendor how thay will be able to achieve such a great price for them.

By law (in WA anyway) they have to present the offer within 24hrs. If they refuse tell them you will contact their local Real Estate Institute to ask why.

 

[man of action!]

Is there a way for which we can be sure that the offer was actually given to the Vendor?

That's a really good question.

In relation to Victoria;

A) By law they must present all written offers to the vendor.

B) In your offer you can put an expiry date of your offer ie 1 day, 1 week etc (be sure to always insert an expiry). So I always put a very short expiry date on it, such as 24 hours. This means the REA has to act and has very little time to call in any offers from other parties.

If they come back with something like "I'll need more time to make an appointment with the Vendor", a reply along the lines of "well that's unfortunate, it means I'll have to look elsewhere then" usually does the trick!

Once you sign your offer, tell the REA that if the Vendor rejects the offer, you would like some type of written confirmation of their rejection. (Remembering, you can cross check the signature against the S32 if need be.)

If you have any suspicions about it not being presented, then you can slip a polite note in the Vendor's letter box along the lines of "I am really interested in buying your property but I am having some problems dealing with XXX of XXX RE. Can you please call me on XXXXXXXX".

The last time I did that I got a really nasty call from the REA who was furious but I pointed out his behaviour only confirmed my reason to take such "drastic" actions.

I was then banned by that REA from ever entering that REA office again!

So did it all backfire for me?

No, a few days after I found a great buy, so never bothered following up with the Vendor. But I did note the Agent's name vanished off listing advertising about a month later, who knows why... he just vanished.

I never sweated over anything because I don't get emotionally involved... if I miss this property, I'll find another.

You see, most REA's are control freaks and if any aspect of that control is taken away from them, then it's panic mode. So your objective is to take as much control during the negotiation stage as possible, but always leave the REA thinking they are in control!

But if you find a good REA, they will work with you and help you source good properties and you'll never have to worry about offers not being presented etc.

 

[Jonathon]

That's a really good question.

In relation to Victoria;

A) By law they must present all written offers to the vendor.

I understood that the agent can refuse to pass on a written offer if they have written instructions from the vendor, but that you can insist on seeing that written instruction if they refuse to pass on an offer.

Of course, in this market, you'd be a crazy vendor to do this, but 12 months ago it might have been a bit more sensible pre-auction.

 

[man of action!]

I understood that the agent can refuse to pass on a written offer if they have written instructions from the vendor, but that you can insist on seeing that written instruction if they refuse to pass on an offer.

Jonathon,

That's a good point and something I hadn't considered before.

 

[AshleyS]

This is a good site in SA. Explains a fair bit.

http://www.reisa.com.au/

 

[Collector]

I understood that the agent can refuse to pass on a written offer if they have written instructions from the vendor, but that you can insist on seeing that written instruction if they refuse to pass on an offer.

Of course, in this market, you'd be a crazy vendor to do this, but 12 months ago it might have been a bit more sensible pre-auction.

How many vendors do you think actually in writing instruct the agent not to submit offers under a certain amount?

I would not think to many