Is this how you set out a written offer?

[jennyn]

I'm inspecting a unit on Monday and I want to be prepared and have a written offer in my pocket, if my checklist goes well. The offer will be well under what the advertised price is, but the ad says "all offers considered".

So do I just type out on a piece of paper like this:

My Name
My Address
The Date

I offer $xxx for (address in here)

Deposit: $100

Subject to finance approval for $xxx (same amount as offer)
Subject to purchaser's satisfaction with building inspection report
Subject to purchaser's satisfaction with pest inspection report

Then my signature here
My name printed here

I've never made a written offer before so all tips would be gratefully received.

I also thought of getting a few with different offer amounts done and in my bag in case the agent rings the vendor while I'm there and gets a counter offer straight away. My first written offer will be less than what I'm prepared to go up to, but I won't tell the agent that of course.

 

[Bmok]

Hi Jenny,

All offers that I've made in the past have all been on official REIQ forms. However, I don't suppose it matters if the original offer you make is written out as you mentioned.

I would suggest that you make the finance "subject to and conditional upon the purchaser arranging finance suitable to herself, such finance to be confirmed within 21 days from the date of signing the contract". You wouldn't want the seller to offer you finance at terms that you wouldn't want.

Cheers,
Bmok

 

[Brenda Irwin]

Hi Jenny, Some agents will accept verbal offers but some like to take a written offer to the seller to show he really does have a serious offer.

A written offer is usually the signing of a contract on an REIQ form. Subject to satisfactory finance & pest & building & anything else you may want included (sale of your own property etc).

The deposit is not usually required until the seller accepts your offer and the contract is signed and dated.

Cheers Brenda

 

[michele_b]

Asy....where are ya woman??!!!

 

[jahn]

Hi
Re offers
Is it necessary to have an expiry time on the offer, e.g.
This offer will expire 48 hours after the date hereon at 5 pm ?
jahn

 

[michele_b]

A time limit is a good strategy if you're making a low unconditional cash offer, esp if delivered with a poker face to a worried vendor. Don't overdo the pressure though - a confused mind always says 'no' ........and you may just p*** him off so much he won't deal with you any more at any price. Never try that one with a property you really DO want.

There have been arguments before on this forum about the wisdom of written offers, especially in view of the US experience where a simple cash offer is now legally obliged to run to 10 pages. Still, a written offer DOES formalise your intention and clarify your proposed terms.

Unless you absolutely HAVE to include conditions for your own protection, it's better to keep things simple and do your due diligence before you make your offer. A simple offer with no conditions will attract a vendor's attention and has a better chance for success, sometimes at a lower price than a more complex (read fallible from the vendor's viewpoint) offer.

If you need to write your offer subject to finance, then as someone suggested above, be specific about the terms. This gives you an out should you need it. Personally, I don't like to play games with vendors - once the decision is made to buy, I think the purchaser should focus 100% on completing the deal. I think that's only fair.

There's also no need to get greedy. Who was it that said "leave some fat in the deal for the next guy". Good advice. And things do kinda even themselves out - In March, I paid $70K over the odds for a city property and managed to break the cbd land record price! Bugga. Then a surprise capital gain on another new purchase equalled...yup...$70k

Back to offers. If you don't have a purpose built form, then a simple letter to the agent will do:
"I wish to make an offer to purchase property XXX, but because of other commitments, will need to have a response from you on or before XXX. I am prepared to sign an unconditional cash contract for $XXX with a twenty-one (21) settlement or alternative timeframe to suit the vendor."

And on the contract, I also like to limit my liability by deleting the clause about damages should I fail to complete. Instead, I sometimes insert a clause which states that I will pay $XXX if I should fail to settle for any reason. This is much better than being liable for damages and court costs plus the difference between your price and a lower one should the vendor be forced later to accept a lower price.

QLD law may vary of course - Asy, git in here!!!

 

[jahn]

Tanks mihele-b
Sounds fair enough
jahn

 

[asy]

Hehe, I am here MB...

I wasn't here earlier, because my ISP shat itself, and I couldn't get on...

anyway...

We always do offers on the contract. This is the way it's done in QLD, and I think it makes sense. If you are making an offer, why not put it on the contract so if the vendor likes it they can sign and seal the agreement (or counter offer, still binding if you agree).

Although, the offer you suggest is fine, if not legally binding.

It still shows intent to sign.

Make sure you give yourself at least a 2 week finance clause, and same for build and pest. Also include in the offer any clauses you may want put into the contract. (although if it's a straight out purchase there probably won't be any).

hope this helps,

asy

 

[Kevin Hockey]

Originally posted by jahn
Hi
Re offers
Is it necessary to have an expiry time on the offer, e.g.
This offer will expire 48 hours after the date hereon at 5 pm ?
jahn

Hi Guys,

In response to Jahn's question I would like to clarify this situation. For a contract to be legally binding, by law there must be offer AND acceptance. In other words, just because you sign a contract and so does the owner this does not necessarily make it a contract. Have you noticed that the agent always rings you once your offer is signed and says "Congratulations, you just bought a house" or "Congrats your offer has been accepted". This is the moment that the contract has been legally bound, not at the time of signing. There must be acceptance on your behalf.

The new Qld legislation now requires for the buyer or buyers solicitor to receive a copy of the contract for it to become binding. There is also a 5 day cooling off period (a penalty of .25% of the purchase price applies if you use this condition).

You may add such a clause as you suggest to a contract, however it is not necessary, you may withdraw an offer at anytime up until it has been signed and you have been told of its acceptance.

I am not a solicitor and you should always take your own advice, however this has been my solicitors advice in the past.

Good luck with it

Kev

www.nundahrealestate.com.au