Written offer...what to include?

Sorry for the newb question, but...does anyone have examples of a letter of offer? Should this be done by your solicitor or can you do it yourself?
 
you can write 1 yourself

There are many formats, this subject has been discussed before do a search and you will find several examples.

Remember though that your offer should be attractive so don't put too many conditions in it. If you want to add more conditions you can negotiate those later after your offer has been accepted.

Here is an example.

LETTER OF OFFER

From:

To:

Date:

RE: Property: (address of the property you wish to purchase)


I submit this formal offer to purchase your property on the following conditions:

Price:

Deposit payable:

Settlement: 30 days from date of contract

Subject to satisfactory pest and building inspection reports
Subject to finance appoval
Cooling off period: 5 working days

Please contact me on Ph 0400 000000 if you wish to proceed.


Howard Smith
 
If you want to add more conditions you can negotiate those later after your offer has been accepted.
If you mean things that are usually relatively trivial, and which you're prepared to miss out on, such as a day or two pre-settlement access, or a clause about when the deposit will be released, then this tactic might be OK. (And I assume this is what BV is referring to.)

But if you're talking about conditions that substantially alter the attractiveness of the offer, such as vendor finance, due diligence, extended settlement, etc, then I heartily disagree; I think that would be an unethical tactic. The conditions are part of what you are offering, therefore it's deceptive to try and "trick" the vendors into making a commitment when you haven't disclosed the real nature of your offer.
 
Hi guys,

I'm preparing my first written offer too. Will do another inspection this weekend, but want to prepare the letter before. Can anyone please have a look if this is OK or am I missing something? I'm doing 100% loan with St.George and already got pre-approval. My MB said that he will organise me the deposit bond as soon as I need it.
Also, the property is currently occupied with tenants and their contract ends in November.

From: John Citizen
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: $XXXX.00 payable as deposit bond after 7 days of acceptance
Settlement: 30 days from date of contract
Other conditions:
Subject to satisfactory Building Inspection within 14 days
Subject to satisfactory Pesticide Inspection within 14 days
Subject to finance approval with St. George Bank within 21 days of offer acceptance
The property in this contract will be offered as vacant possession


Please contact me on Ph XXXXXXXXXX if you wish to proceed.
 
satisfactory Pesticide Inspection
should be Pest Inspection - you are having it inspected for pests not pesticides.

Subject to finance approval with St. George Bank
should say Subject to finance approval with St. George Bank on terms suitable to the purchaser

I am struggling to see how you want a term in the contract saying
The property in this contract will be offered as vacant possession
when you earlier said that
the property is currently occupied with tenants and their contract ends in November.
and you are offering settlement terms of
30 days from date of contract
- the dates do not add up :eek:
 
Thanks PropertunitySo what is the best way to say that settlement will happen when tenants will leave the property?

You'd say something like "settlement to occur within 14 days of vacant possession being offered".

That way, the vendors could offer an incentive for the tenants to break their lease early and move on - so they get their settlement monies;
OR you buy with tenants in place, settle normally, and give the 60 day notice period to terminate the tenancy prior to expiry November.
 
The only addition to that is I suggest you remove 'St George' from the letter. If St George says no, I think you'd want the abilty to get a loan from someone else without the deal falling through.
 
The only addition to that is I suggest you remove 'St George' from the letter. If St George says no, I think you'd want the abilty to get a loan from someone else without the deal falling through.

OTOH if you don't specify the lender a vendor can make you run around to demonstrate that you can't get finance approval from anyone, which could be a bit laborious.

If you specify St George then all you need to show is a letter from St George to get out of it if you can't get finance. If you get finance from someone else you can just waive the clause as it's to your benefit rather than the vendor's...
 
OTOH if you don't specify the lender a vendor can make you run around to demonstrate that you can't get finance approval from anyone, which could be a bit laborious.

If you specify St George then all you need to show is a letter from St George to get out of it if you can't get finance. If you get finance from someone else you can just waive the clause as it's to your benefit rather than the vendor's...

Depends I guess on whether the risk is that you qualify for the loan, or that the loan is unsuitable.

Jas
 
Thanks guys for all suggestions. Appriciate it.
I'll leave St.George in the offer because i already got preapproval with them for 100% loan. There are not any 100% lenders left on the market ATM.

One more question...Do I really need to do building inspection and pest control if house is still under builder's warranty ( just 2 years old ) ?

Thanks.
 
One more question...Do I really need to do building inspection and pest control if house is still under builder's warranty ( just 2 years old ) ?
Thanks.

I would, in case there are existing issues which have not been discovered by the current owner.

Also, the pest warranty is only for a certain time and only if you do what's in the certificate (if there is 1) . It could be that you have to do an inspection annually or to spray every a couple of years etc.

In our house we have a termite protection system with tubes inside the wall which have to be filled up every couple of years, We do top it up but don't pay for the pest inspection because it's a slab and we have good view all around the house. I also do the inspection inside the roof myself.
 
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