When purchasing a property the ideal situation is for you to be the only purchaser or the only one making an offer. However with a lack of real estate stock many of our clients are having to go to a multiple offer situation where they are competing with other purchasers. So what can you do as a purchaser to make sure that your offer has the best possible chance of winning the deal?
Purchase price – while purchase price is one of the most major considerations the offer does not always go to the highest bidder. It may go to a lower price if the conditions are more attractive to the Vendor.
Finance – an offer that has no finance clause is tempting to a Vendor as they know that the purchaser doesn’t have to get the approval of a lender to raise sufficient funds to purchase the property. If, however, you do require finance from a lender you can obtain pre-approval for your loan so that the offer you make can be a cash offer. You need to be aware though that the lender has the right to withdraw a loan approval if they don’t like the property that you are purchasing. For this reason if you are wanting to make a cash offer you should always get your lender to confirm they are happy with the property – preferably get this in writing.
Settlement date – A vendor may prefer an earlier settlement in order to move on or they may prefer a delayed settlement to find new accommodation. Check with your agent.
Building inspection – This is generally recommended to establish the soundness of the building. However an offer conditional on a Building report may be looked on less favourably than one without. You can always ask the Vendor if there is a Building report available that you could look at.
Registered valuation – again this is recommended to show a fair market value on the property. But an offer with this on may seem to be weaker than one without that on. You could ask the Vendor if they have a valuation.
Other conditions – Generally the fewer the conditions the stronger the offer is deemed to be. So doing as much homework as you can prior to making the offer can mean having to put in fewer conditions.
Due Diligence – One way to put in fewer conditions is to have the condition “Due Diligence”. This means that the Purchaser has a certain amount of time to satisfy their need for further investigation which can include anything eg building report, finance. However this clause has legal implications and should only be inserted after legal advice from a solicitor has been obtained.
In fact our recommendation is to get your solicitor to advise you on the contract prior to you signing it. This will allow them to make recommendations, advise you on your responsibilities and caution you on the legal liability you are submitting yourself to.
