Making a written offer!
- Thread starter samria
- Start date
Welcome, Samria
My only experience of making a written offer has been a case of filling in the appropriate form in the REA's office, detailing any special conditions and signing it and having it countersigned by the agent. Pretty straightforward, really. No letter writing involved!
Good luck.
My only experience of making a written offer has been a case of filling in the appropriate form in the REA's office, detailing any special conditions and signing it and having it countersigned by the agent. Pretty straightforward, really. No letter writing involved!
Good luck.
Make sure you fill out the contract with subjects to finance & building and pest inspections. Allow yourself at least 14 days to carry these out.
I personally include;
Write on the contract a deposit of $1000 after say 3 days from contract date (both parties signing), with no extra deposit, balance paid on settlement date.
I try to aim for 90+ day settlement, but am willing to come down to 60 if it means getting the deal.
Edit: I wrote this with the assumption you were buying in Brisbane, obviously this isn't the case as you wouldn't be writing a letter of offer, rather filling out the proper contract.
Your letter of offer would normally include the price, and purchasing terms, including any clauses you want to put in to make it easy to exit. I'm not sure whether you are legally binded until you fill out the actual contract, but I would include these just in case.
I personally include;
Write on the contract a deposit of $1000 after say 3 days from contract date (both parties signing), with no extra deposit, balance paid on settlement date.
I try to aim for 90+ day settlement, but am willing to come down to 60 if it means getting the deal.
Edit: I wrote this with the assumption you were buying in Brisbane, obviously this isn't the case as you wouldn't be writing a letter of offer, rather filling out the proper contract.
Your letter of offer would normally include the price, and purchasing terms, including any clauses you want to put in to make it easy to exit. I'm not sure whether you are legally binded until you fill out the actual contract, but I would include these just in case.
Make sure you explicitly state an expiry date. The forms usually has a space for this..
I was planning to ask this question myself, thanks from me too for the replies so far.
Are there any other conditions people put down as a rule of thumb when making an offer.
I'll be purchasing in Melbourne if that makes a difference.
Any advice appreciated.
Is 14 days generally enough? Finance aside, can you usually get both of those inspections that quickly?
I'm still raw so go easy, but you include this deposit 3 days after the 14 as a condition pretty much so you can set your own deposit? Who would hold the deposit, the agent or the owner?
Are there any other conditions people put down as a rule of thumb when making an offer.
I'll be purchasing in Melbourne if that makes a difference.
Any advice appreciated.
My partner just bought a place and it will only go through if the valuation is right on purchase price..
In hindsight she should have arranged to get the banks valuer out there first before the building, pest inspection.. If it falls over she has paid $$ for building & pest..
Also.. You can put on the contract; 14 business days for building & pest and finance, effectively giving you more than the normal 14 days if you need it.
Another ''out'' is subject to partners approval.. Especially if you are hunting around by yourself like I often do.. Your partner could be your dog for all they know..
In hindsight she should have arranged to get the banks valuer out there first before the building, pest inspection.. If it falls over she has paid $$ for building & pest..
Also.. You can put on the contract; 14 business days for building & pest and finance, effectively giving you more than the normal 14 days if you need it.
Another ''out'' is subject to partners approval.. Especially if you are hunting around by yourself like I often do.. Your partner could be your dog for all they know..
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Hi Everyone
I am sure everyone can add or delete a thing or two from here... this is kind of what mine loko like.
Property Details:
Agency:
Purchasers Name: (insert full name) & others as later nominated
Address:
Phone:
Offer Price: $**** Offer expires on (insert full date) at (insert time)
Other Conditions of Offer:
Deposit $<insert amount> payable after 7 days of acceptance
Subject to my satisfactory Building Inspection within 7 days
Subject to my satisfactory Pesticide Inspection within 7 days
Subject to independant valuation within 7 days
Subject to my finance within 21 days
Settlement <insert number> weeks after all conditions have been met
Subject to my satisfactory survey report within 7 days
Subject to my due diligence with local council within 3 days
(Note; You can add anything here applicable, if you want to know the house down, half of them dont matter and will only annoy the vendor)
Signed:___________________________
Name:
Date:
I am sure everyone can add or delete a thing or two from here... this is kind of what mine loko like.
Letter of Offer
Property Details:
Agency:
Purchasers Name: (insert full name) & others as later nominated
Address:
Phone:
Offer Price: $**** Offer expires on (insert full date) at (insert time)
Other Conditions of Offer:
Deposit $<insert amount> payable after 7 days of acceptance
Subject to my satisfactory Building Inspection within 7 days
Subject to my satisfactory Pesticide Inspection within 7 days
Subject to independant valuation within 7 days
Subject to my finance within 21 days
Settlement <insert number> weeks after all conditions have been met
Subject to my satisfactory survey report within 7 days
Subject to my due diligence with local council within 3 days
(Note; You can add anything here applicable, if you want to know the house down, half of them dont matter and will only annoy the vendor)
Signed:___________________________
Name:
Date:
phone agent. make agent do all the work. tell them your offer and conditions.
go in to RE office to sign.
wait for counter.
go in to RE office to sign.
wait for counter.
Quick hypothetical question: Let's say you put a clause like this in the written offer:
"Subject to my satisfactory Building Inspection within 7 days"
Then you get cold feet and want to pull out of the deal, & retract the written offer. Can you use a so-so Building Inspection as an excuse? What if the Building Inspection turns out to be fine... can you still use it as an excuse not to buy the property?
"Subject to my satisfactory Building Inspection within 7 days"
Then you get cold feet and want to pull out of the deal, & retract the written offer. Can you use a so-so Building Inspection as an excuse? What if the Building Inspection turns out to be fine... can you still use it as an excuse not to buy the property?
short answer "yes" with an "if", long answer "no" with a "but"...
if you are not happy with the building report and want to pull out, then you need to put in the clause "subject to purchaser's complete satisfaction with building report" or similar - just putting "subject to satisfactory building report" means as long as it is deemed "satisfactory" then you must buy.
i know people who have had a an REA drag them through a court because they were vague with the wording. the purchaser had the aceup their sleeve with the finance clause, and a judge deemed the building report "satisfactory" so they were required to purchase. the agent thought he top sh_t for getting this thru, so the purchaser made their finance fall over...!
if you are not happy with the building report and want to pull out, then you need to put in the clause "subject to purchaser's complete satisfaction with building report" or similar - just putting "subject to satisfactory building report" means as long as it is deemed "satisfactory" then you must buy.
i know people who have had a an REA drag them through a court because they were vague with the wording. the purchaser had the aceup their sleeve with the finance clause, and a judge deemed the building report "satisfactory" so they were required to purchase. the agent thought he top sh_t for getting this thru, so the purchaser made their finance fall over...!
Verbal and written offers are both fine in NSW; check out the DFT site for more specific information on what you're after. Best of luck 
http://www.fairtrading.nsw.gov.au/Tenants_and_home_owners/Buying_property.html
http://www.fairtrading.nsw.gov.au/Tenants_and_home_owners/Buying_property.html
I had a bad expirience trying to put down a written offer, had been looking at a property that had been on market for 3 months at $240k
The property had no intrest so they reduced to $215-$230k
I made a verbal offer of $205k and the agent said come back to the office and put it in writting. I went back to the office but he wouldnt put my conditions on because they were to broad.
Subject to Building & Pest Inspection.Subject to Finance ANZ bank only within 12 working days of Offer Acceptence.The property in this contract will be offered as vacant possession.All electrical and plumbing being in working order at settlement.All fixtures, fittings & Chattels will remain in place at settlement.All rubish on the property is to be removed by seller prior to settlement.The purchaser will inspect the property prior to settlement and should the purchasernot be satisfied with reports and inspections then this contract will be at an end and all deposit monies will be refunded in full.All ougoings paid in full at Settlement ie. Rates, Water, Sewage etc 10% DepositWith a three month settlement period
Anyway he refused to put these on the contract and said he wouldnt use mine. Sent me off to get legal advice.
I payed a Lawyer $220 for pre contract advice and she told me his pest clause was horrible and the section 32 was out of date.
I asked him to make the ammendments and he replied back the owner now wants $215k
I said make the ammendments and ill think about it. Anyway, didnt hear from him for 3 days so I messaged him and he said the owner has taken it off the market and will put it back on in summer.
Anyway I then waited a week messaged back and sai if the owner is willing to put it back on the market ill pay the $215k.... waited a few more days and no reply. Finally he comes back and says the owner will put it back on the market at $220k in November.
This is where I lost my cool and told him to shove it up his ****
Bad move because I want the house.
The property had no intrest so they reduced to $215-$230k
I made a verbal offer of $205k and the agent said come back to the office and put it in writting. I went back to the office but he wouldnt put my conditions on because they were to broad.
Subject to Building & Pest Inspection.Subject to Finance ANZ bank only within 12 working days of Offer Acceptence.The property in this contract will be offered as vacant possession.All electrical and plumbing being in working order at settlement.All fixtures, fittings & Chattels will remain in place at settlement.All rubish on the property is to be removed by seller prior to settlement.The purchaser will inspect the property prior to settlement and should the purchasernot be satisfied with reports and inspections then this contract will be at an end and all deposit monies will be refunded in full.All ougoings paid in full at Settlement ie. Rates, Water, Sewage etc 10% DepositWith a three month settlement period
Anyway he refused to put these on the contract and said he wouldnt use mine. Sent me off to get legal advice.
I payed a Lawyer $220 for pre contract advice and she told me his pest clause was horrible and the section 32 was out of date.
I asked him to make the ammendments and he replied back the owner now wants $215k
I said make the ammendments and ill think about it. Anyway, didnt hear from him for 3 days so I messaged him and he said the owner has taken it off the market and will put it back on in summer.
Anyway I then waited a week messaged back and sai if the owner is willing to put it back on the market ill pay the $215k.... waited a few more days and no reply. Finally he comes back and says the owner will put it back on the market at $220k in November.
This is where I lost my cool and told him to shove it up his ****
Bad move because I want the house.
Here are the ammendments it cost me $220 for
Hi Sam,Here are the amendments I will need before I can sign the contract. The contract: *With the purchase price I need you to put GST inclusive " $205,000 which includes any GST "* Deposit will need to be 5% now, I didn't realise all the other initial costs *Finance section: Lender: ANZ BANK ONLY Loan being not less than: $185,000Approval Date: 12 BUSINESS DAYS FROM THE DAY OF SALE Can you please also amend the building & pest special condition to this:
“This Contract is subject to the Purchaser obtaining a building inspection report
and/or a pest inspection report. The Purchaser must obtain the said report(s) no
later than 12 working days after the Day of Sale and in the event that either or both of the said
inspection reports are not to the Purchaser’s satisfaction, then:
(1) the Purchaser may end this Contract but only if the Purchaser serves written
notice on the Vendor or the Vendor’s agent no later than 3 clear business days after
the date of the said report; and
(2) all moneys shall be immediately refunded to the Purchaser if the Contract is so
ended.”
The Section 32 *All certificates in the section 32 are over 3 months old so out of date. Can you send me an updated version? Also I will need you to provide me with an amended version of the Section 32 that clearly shows me a figure the outgoings will not exceed *With Vacant Possession I need you to delete the words "Reciept of rents and profits"from section 32 statement.Also i'll need you to give me written confirmation that the tenant has been given notice to vacate the property, and will have vacated prior to settlement. Kind Regards
Hi Sam,Here are the amendments I will need before I can sign the contract. The contract: *With the purchase price I need you to put GST inclusive " $205,000 which includes any GST "* Deposit will need to be 5% now, I didn't realise all the other initial costs *Finance section: Lender: ANZ BANK ONLY Loan being not less than: $185,000Approval Date: 12 BUSINESS DAYS FROM THE DAY OF SALE Can you please also amend the building & pest special condition to this:
“This Contract is subject to the Purchaser obtaining a building inspection report
and/or a pest inspection report. The Purchaser must obtain the said report(s) no
later than 12 working days after the Day of Sale and in the event that either or both of the said
inspection reports are not to the Purchaser’s satisfaction, then:
(1) the Purchaser may end this Contract but only if the Purchaser serves written
notice on the Vendor or the Vendor’s agent no later than 3 clear business days after
the date of the said report; and
(2) all moneys shall be immediately refunded to the Purchaser if the Contract is so
ended.”
The Section 32 *All certificates in the section 32 are over 3 months old so out of date. Can you send me an updated version? Also I will need you to provide me with an amended version of the Section 32 that clearly shows me a figure the outgoings will not exceed *With Vacant Possession I need you to delete the words "Reciept of rents and profits"from section 32 statement.Also i'll need you to give me written confirmation that the tenant has been given notice to vacate the property, and will have vacated prior to settlement. Kind Regards
There are a plethora of special conditions for all sorts of circumstances (for QLD contracts) on the Hains website, but many of them would be usable in other states as well. Just be careful if you're interstate and a condition refers to clauses of the standard contract, obviously.
Do not be tempted to write your own plain language clauses if you're not a solicitor.
Do not be tempted to write your own plain language clauses if you're not a solicitor.
Do not be tempted to write your own plain language clauses if you're not a solicitor.
True... but our solicitor never put in a subject to pest/building or subject to finance clause for us?!? grr.
Hi Tess
Here in NSW most purchasers simply use the 5 day cooling off period in which to conduct their B/P inspections and get finance approved. It doesn't really matter if the B/P comes back to your satifaction or not, or the finance. If you withdraw during this period, you automatically forfeit your 0.25% as a penalty to the vendor for having the property officially "off the market" during this period. You can elect to carry out your inspections and get finance approved before you exchange but you then carry the risk of being gazumped by another buyer in the meantime. Depending on where and what you're buying, and the individual circumstances of the sale, you can purchase either way. Very rarely will a vendor allow a house to be taken off the market whilst you do your due diligence with no compensation for them- and fair enough, too. Try to think of it from the vendor's perspective. Most of them, however, at least in my experience, are happy to extend the cooling off period, in case you haven't finished your research or got finance sorted.
I always find it interesting that so many buyers will do virtually anything to not lose that 0.25% (for eg: on a $600K property is $1500) but not necessarily consider the greater advantage of walking and looking elsewhere. Yes, it's a considerable sum but it can also prove a psychological disadvantage as buyers scramble to save it rather than walk away from the sale and buy better elsewhere.
If, for example, during the cooling off period, you discovered the dodgy looking extension out the back had no building certificate or the garage was built over your neighbour's boundary, a Hungry Jack's was due to be built on the vacant block next door or the suspicious lump in the cellar wall turned out to be an active termite nest would you walk away? Most buyers tend to return to the negotiating table, only to already be so "psychologically attached" that they either accept something less than they're entitled to, or end up purchasing and regretting it (only deep down, as buyers remorse is a cruel creature and not necessarily one to be shared with everyone around you!). Walking away, when money is at stake, isn't always as easy for some as they'd like to think it would have been.