Is this ok for a written offer?
- Thread starter Calico
- Start date
How did you go?
I made a verbal offer of $324K on Saturday after the inspection and received a condescending pat on the arm by the REA and the comment, "we're a long way off". Anyway he rang back this morning to say the vendor has rejected the offer and has not made a counter offer.
I think I'll make a slightly higher offer later in the week (say $327K) and then walk away if that is rejected. We like the place but it has very high strata fees which negate the good yield.
If there is one piece of advice I have been given over and over again it is: "don't be afraid to walk away from a deal, there will always be another great one around the corner"
Wow, the local market must be HOT if the agent thinks a $324K offer is a "long way off" from $335K!
Apologies if it seem like i am hijacking this thread but thought i would continue a current discussion rather than start a new thread.
I am wriing up a template of formal offer as follows (after searching through this forum on the related thread)
Is this ok and also, what is the difference between contract date and offer acceptance ?
Thank you
===
From:
To:
Date:
RE: Property: <address of the property>
I submit this formal offer to purchase your property on the following conditions:
Price: $XXX XXX.00 GST inclusive
Deposit: 10% of the purchase price payable within 5 business days of contract date
Settlement: 30 days from date of contract
Other conditions:
This offer expires on <date> at <time>
Subject to satisfactory Building and Pest Inspection within 14 business days of offer acceptance
Subject to finance approval with CBA on terms suitable to purchaser within 21 business days of offer acceptance
Cooling Off Period: 5 working days
Please contact me on Ph XXXXXXXXXX if you wish to proceed.
I am wriing up a template of formal offer as follows (after searching through this forum on the related thread)
Is this ok and also, what is the difference between contract date and offer acceptance ?
Thank you
===
From:
To:
Date:
RE: Property: <address of the property>
I submit this formal offer to purchase your property on the following conditions:
Price: $XXX XXX.00 GST inclusive
Deposit: 10% of the purchase price payable within 5 business days of contract date
Settlement: 30 days from date of contract
Other conditions:
This offer expires on <date> at <time>
Subject to satisfactory Building and Pest Inspection within 14 business days of offer acceptance
Subject to finance approval with CBA on terms suitable to purchaser within 21 business days of offer acceptance
Cooling Off Period: 5 working days
Please contact me on Ph XXXXXXXXXX if you wish to proceed.
I didn't want to start another thread... but
I want to place an offer for a property however, I want it for the cheapest price, where settlement period doesn't bother me, 30 days, 3 months, 6 months......
so can you or what is the best way to put in a offer with the best chance.
eg I want to make it sound as attractive as possible so something like
"Offer of $XXXk, you can choose 30 days, 2 months, 3 months, 6 months, 9 months, 12 months settlement"
can this be done?
I want to place an offer for a property however, I want it for the cheapest price, where settlement period doesn't bother me, 30 days, 3 months, 6 months......
so can you or what is the best way to put in a offer with the best chance.
eg I want to make it sound as attractive as possible so something like
"Offer of $XXXk, you can choose 30 days, 2 months, 3 months, 6 months, 9 months, 12 months settlement"
can this be done?
Great to see that you listened to this advice. It will serve you well on your investing journey.
1). Sometimes the problem with trying to do the right thing & searching this forum is that you will find things unnecessary for your situation. In Vic you don't have to write down your offer like that. Although technically I suppose there's nothing stopping you. The agent has a standard form that they will fill in with you with the details of your offer. They will present that to the vendor. Just tell the agent what you would like to offer & say you want them to come around & put the offer in writing.
2). Good question. The contract date is the date that the offer is accepted by the vendor.
3). I STRONGLY advise not to offer a 30 day settlement right now unless perhaps you're a bank manager. Given your comments about finance approval I doubt this.
4). Suggest it's unlikely that the vendor will accept 21 business days for finance. That's a month. Standard is 10 business days & then you can ask them to extend by another 10 days down the track. They are already into the deal by 2 weeks so will more than likely agree to extend. I don't deal with CBA but am lead to believe that (somehow I don't know) they have been very popular with FHBs and are one of the worst for lead times.
5). Not confident they will accept 5 day cooling off. Are you likely to get delayed buyer's remorse? Legally you're entitled to 3.
6). Bugger! I just realised that there is probably no REA involved & you have found a property that you want to buy straight off the vendor?
If so, write it up as you have - with suggested amendments.
Anything can be done. If the property is listed with an agent ask them what settlement the vendor is looking for. If you can give them what they want (though I suggest 30 days is very dangerous) make sure you get something back. For example, if they want 60 or 90 days, say that you really need 120 or 150 days. I would offer a slightly higher price on maybe 150 days. Then offer your low price for 60 days. This was you are seen to have given up something to suit the vendor. Obviously don't offer so much more on the longer settlement that you make it attractive to them.
This type of thing is done all the time. Why? Well, it takes into consideration the time value of money. You would rather have 200k today than 201k in 5months. At least, 99% of people would. Of course, if you are borrowing 200k @ 6% each month it will cost you $1000 every month. This may be the vendors situation so it's best for them to sell early. Other vendors want as long as possible because they may be selling before buying, for example, and need to find somewhere. Knowledge is power in all negotiations.
If this is all too complicated & you really don't care, it's quite kosher to just offer $x - settlement 60-300 days (or whatever) to suit vendor.
Thank you, have made the changes as follows
From:
To:
Date:
RE: Property: <address of the property>
I submit this formal offer to purchase your property on the following conditions:
Price: $XXX XXX.00 GST inclusive
Deposit: 10% of the purchase price payable within 5 business days of contract date
Settlement: xx days from date of contract
Other conditions:
This offer expires on <date> at <time>
Subject to satisfactory Building and Pest Inspection within 10 business days of contract date
Subject to finance approval with CBA on terms suitable to purchaser within 10 business days of contract date
Cooling Off Period: 3 business days
Please contact me on Ph XXXXXXXXXX if you wish to proceed.
ok got it,
just a bit confused by your post..
so you are saying that most vendros would generally prefer a quicker settlement to move on, while buyers will mostly prefer a later settlement as it costs $$$ to borrow.and hence you recommend a slightly higher price for a longer settlement... but not to over do it..
so something like OFFER: $370k for 3 month setttlement or $378k for 6 month settlement,
is this the general idea
P.S ive contacted the agent and am waiting for their response in regards to the seller!
slightly OT... but how important is the 'subject to finance' clause to the vendor accepting the offer?? I would imagine right now there are a lot of FHB that go in all eagle-eared and then get knocked back on the finance... This would be frustrating if you were a vendor.
If a vendor had say two offers very close together, one subject to finance, the other not, surely they'd take the one without this clause to avoid the stuff around of a buyer knocked back on finance??
What I'm getting at - is it advantageous to ommit this at the moment to secure a property, even though there may be some risk associated.. as long as you were 99% sure finance was not an issue, e.g. been conditionally been pre-approved, 20%+ deposit, zero debt, etc.
If a vendor had say two offers very close together, one subject to finance, the other not, surely they'd take the one without this clause to avoid the stuff around of a buyer knocked back on finance??
What I'm getting at - is it advantageous to ommit this at the moment to secure a property, even though there may be some risk associated.. as long as you were 99% sure finance was not an issue, e.g. been conditionally been pre-approved, 20%+ deposit, zero debt, etc.
Sounds good!
I agree with your reasoning 100% & this is what I do. If i was selling (and will be soon) I would accept the unconditional offer every time. That said, please do a search on this as there are considerable risks involved. Nothing in finance is ever totally certain until the mortgage is actually signed.
one more quick question,
If im looking at a property with a shabby old house which I intend to keep for a while and subdividie down the traack,
since the price range is fairly FHO territory, and Im competing against others, to make it more attractive, is it better to say, subject to finance but leave out the pest and other inspections?? in conjunction with the different prices for different settlements, from what I hear from teh agent, it seems the vendors aren't in a desperate hurry but the shorter the better!!
If im looking at a property with a shabby old house which I intend to keep for a while and subdividie down the traack,
since the price range is fairly FHO territory, and Im competing against others, to make it more attractive, is it better to say, subject to finance but leave out the pest and other inspections?? in conjunction with the different prices for different settlements, from what I hear from teh agent, it seems the vendors aren't in a desperate hurry but the shorter the better!!
PM, you have the 3 day cooling off in which to get the pest & building inspections done. You may have to do some fancy phonework to get someone to do it in the timeframe; but shouldn't be hard. I bought a house like this in April. Make sure that you do get the inspections done, though.
ok thanks, must admit i'm quite inexperienced at making conditional offers.
so unconditional is good for most vendors...understood.
However, does saying subject to finance but without any pest inspections, make it basically the same as conditional...ie if Im going to put subject o finance, I mihgt as well put subject to pest inspections etc.
Im just trying to get the price while actually making the offer look attractive...
No worries. At least you're here learning.
The answer is Yes, any condition = conditional, whether it's on finance, pest or whatever. If it makes you feel better, I would think it's extremely rare for any FHB to be out making unconditional offers anyway. You can just make the best offer you can on terms suitable to the vendor. The vendor may come back eith a counter offer - but at least you're then in the negotiaiting seat. Most likely scenario if there's another offer is that it will also be subject to finance.
Good luck!
I've reread the thread several times..but still confused..as ozperp said, to get the finance from "I have a pre-approval letter" to "unconditionally approved" will take more then 5 or even 10 business days. I spoke with my broker recently and he indicated 3-4 weeks waiting time..
So how in NSW is buyer able to ascertain its finance without being able to put "subject to finance" in the offer/contract and in such a short time
What happens if I sign the contract of sale with RE/conveyancer, it gets exchanged, i paid the deposit, settlement is 1-2 months away, then in 3 weeks I get knocked back by the lender? What am i missing here..
