Making an Offer on a Property: 10 Smart Steps for Buyers
Discover how to make a confident offer on a home in Australia. Learn the right price to offer, when to negotiate, and what to ask before signing.
Buying a property? Here’s how to approach your offer the smart way
Making an offer on a property is one of the most nerve-wracking steps in the buying process. You want to secure the home you love, but you also want to avoid overpaying.
Understanding how to research, negotiate, and structure your offer can mean the difference between landing a great deal and spending tens of thousands more than necessary.
This guide walks through the essentials of making an offer in the Australian property market, from assessing value and consulting professionals to knowing the right questions to ask before you sign.
Asking price vs offer price: what’s really going on
The price listed on a property is often more of a starting point than a final figure. Most sellers and agents expect a degree of negotiation.
Agents typically set the asking price 5–10% higher than what the vendor is realistically prepared to accept. This creates room for offers to come in below the listed figure while still achieving the seller’s goal.
However, the strategy changes depending on market conditions. In slower markets, buyers can negotiate confidently below the asking price. In competitive markets, such as when multiple offers arrive within days, vendors may hold firm or even attract bids above their initial expectations.
The key is knowing what the property is actually worth, not what it’s advertised for.
Should you get a valuation before making an offer?
Many buyers rely on online price estimates or comparable sales to guide their offers, but an independent valuation can provide additional clarity.
A professional valuation report gives an objective view of the property’s current market value, based on recent local sales and the home’s condition. However, valuations can take several days to complete and usually cost between $400 and $600.
While a valuation can strengthen your negotiating position, few sellers will accept an offer that’s conditional on valuation, particularly in a fast-moving market.
It’s also worth noting that if your bank later arranges its own valuation as part of your loan approval, the two assessments may differ; lenders only use valuers from their own approved panels.
If you decide to pay for an independent valuation and the purchase doesn’t proceed, the fee remains payable. For most buyers, it’s best used as an optional tool rather than a standard requirement.
10 practical steps to making an offer on a property
Here’s a clear, step-by-step approach to help you make a confident and informed offer.
1. Secure loan pre-approval
Before you start house hunting seriously, it’s essential to know your budget. Pre-approval gives you a realistic idea of what a lender is willing to finance, subject to final checks on the specific property.
A mortgage broker can assist by comparing loan products and explaining how each lender’s policies might affect your borrowing power.
2. Engage a solicitor or conveyancer early
Buying property involves legal commitments. A solicitor or conveyancer can explain your rights, review contracts, and ensure you’re protected before your offer becomes binding.
If your offer is accepted, their early involvement can save time and prevent costly mistakes later.
3. Research the market thoroughly
The strongest offers come from well-informed buyers. Review recent sales of comparable homes in the same suburb or street, noting land size, condition, and key differences.
Focus on actual sale prices, not just asking prices; this reveals the true value range in your chosen area. Real estate portals, council data, and buyers’ agents can all provide reliable insights.
4. Decide on any offer conditions
Offers can be either unconditional (made without contingencies) or conditional (dependent on factors such as financial approval or building inspections).
An unconditional offer is more attractive to the seller, but also riskier for you if something unexpected arises.
A conditional offer gives you protection, for instance, “subject to satisfactory building inspection” or “subject to finance approval”, but may be less competitive in a hot market.
5. Organise building and pest inspections
These inspections are essential, especially for older homes. They reveal potential structural issues, pest damage, or maintenance concerns that could affect your decision or justify a lower offer.
A professional inspection generally costs between $400 and $700 and can save you thousands by uncovering hidden defects.
6. Prepare your offer strategically
Once you know the property’s value range, decide your maximum price and start slightly below it, typically 5–10% lower, to leave room for negotiation.
For example, if the asking price is $850,000, you might open with $810,000, provided your research supports that figure.
Be realistic, though. In markets with multiple interested buyers, starting too low can result in your offer being dismissed outright.
7. Review the contract of sale carefully
The contract outlines key terms, including the settlement date, deposit amount, and any special conditions. Ensure everything aligns with your expectations before signing.
Look out for clauses that could disadvantage you, such as penalties for delayed settlement or restrictive inclusions.
8. Sign and submit your offer
Offers can be submitted in writing, either through an expression of interest or a signed contract of sale. Once both parties sign, it becomes legally binding.
A small holding deposit may be requested to demonstrate your commitment. This is separate from the main deposit and is typically refundable if the sale doesn’t proceed.
9. Pay the deposit once the contracts are exchanged
When your offer is accepted and contracts are exchanged, you’ll need to pay the agreed deposit, commonly 10% of the purchase price, into the agent’s or solicitor’s trust account.
This deposit confirms your intent to buy and forms part of the final payment on settlement.
10. Complete the cooling-off period
Most Australian states allow a brief cooling-off period (usually between 2–5 business days, depending on the jurisdiction). During this time, you can withdraw from the contract if necessary, although small penalties may apply.
Use this period to finalise finance approval, complete inspections, and confirm all contractual conditions are met.
Once the cooling-off period ends and both parties are satisfied, the sale becomes unconditional; congratulations, you’re officially the new owner.
5 key questions to ask the selling agent before making an offer
Even though agents represent the seller, they can provide valuable context to help you craft a stronger offer.
Here are five questions that can reveal useful information:
1. How was the asking price determined?
Ask whether the price was set based on comparable sales or the vendor’s expectations. This helps gauge how flexible the seller might be.
2. Have there been other offers?
If there are competing offers, you’ll know whether you need to act quickly or adjust your price to stay competitive.
3. How long has the property been listed?
A home that’s been on the market for months often signals a motivated seller, while a new listing may attract stronger initial offers.
4. Why is the vendor selling?
Understanding the reason for the sale, such as relocation, downsizing, or financial pressure, can offer clues about their urgency and willingness to negotiate.
5. Has the price been reduced since listing?
A recent price drop indicates the vendor’s readiness to sell and may suggest potential for further negotiation.
Timing and negotiation: reading the market
Negotiating successfully depends as much on timing as it does on numbers. In a balanced market, buyers have more leverage. In a seller’s market, acting quickly and decisively often matters more than securing a discount.
Be courteous but firm, and focus on facts, comparable sales, property condition, and realistic market data, rather than emotion.
Remember, a property’s value is determined by what someone is willing to pay, not what it’s advertised for.
Buying property is both exciting and daunting, especially when it comes to making that crucial offer. Preparation is key, know your budget, conduct thorough research, and don’t hesitate to seek professional advice.
With a sound strategy and clear understanding of the process, you’ll be better equipped to make confident, informed decisions in Australia’s competitive real estate market.
Contact
For tailored advice on purchasing your next home or investment property, reach out to ++Monopoly Wealth++, your trusted partner in navigating Australia’s property landscape.
