Attractive Offer Conditions

Hi guys,

What are seen as favourable conditions when making an offer (subject to etc)? Properties in the area I am looking at seem to be selling very fast so it would be good to make the offer attractive to the seller. Given I am interstate, a P&B report is a must so I will have to include that in there.

Thanks

 

subject to nothing + cash = most attractive

failing that P&B with short settlement period (check with lender and conveyancer).

 

Depends on what state you're buying in as each has different contract rules.

In SA you can offer without a P&B report because cooling off period doesn't begin til you receive the searches and lasts for 2 business days following so gives you plenty of time to organise one.

No finance condition is obviously attractive, but make sure you're 100% sure you can complete the deal so you don't land in hot water.

Higher deposit is also helpful - shows that you're serious and won't back out of the deal.

 

Every condition weakens your offer as it has more items to be resolved before it is unconditional or extra items that will happen once unconditional.

For a STB&P the tighter it is for the vendor the better it is

something like this is very much in the vendors favour as it is structural integrity and three clear business days and for pest must be active and compromises the structural integrity of the primary building (e.g. no garages or sheds etc) and needs to be completed within three clear business days of contracts being signed. That as best a vendor is likely to get for a STB&P besides unconditional.


Conditional upon Building Inspection

This sale is subject to the Purchaser obtaining a building inspection report within three clear business days of the Vendor signing this Contract Note. If the building inspection report identifies a major structural defect, the Purchaser may end this contract but only if Purchaser serves written notice on the Vendor with a copy of the building inspection report within three clear business days of the Vendor signing this Contract Note. All monies must be refunded to the Purchaser if the contract is ended.







Conditional upon Pest Inspection

This sale is subject to the Purchaser obtaining a pest inspection report within three clear business days of the Vendor signing this Contract Note. If the pest inspection report identifies an active pest infestation that compromises the structural integrity of the primary building, the Purchaser may end this contract but only if the Purchaser serves written notice on the Vendor together with a copy of the Pest inspection report within three clear business days of the Vendor signing this contract note. All monies must be refunded to the Purchaser if the contract is ended.

 

The other way is to just do it within cooling off (read contract if applicable and cost) or put a solicitor clause for the same cooling off and just use that.

 

Thanks for the responses. If I have pre-approval from the bank, do I still need to put subject to finance?

 

Depends what the bank values the property at. Usually the contract price is what the bank will value it at, but be careful especially if you are considering purchasing at auction.

 

Thanks @2FAST4U the property wont be bought at auction

 

I always recommend the following minimum conditions to clients;

1. 21 days minimum for finance approval
2. 21 days minimum for settlement
3. Subject to B&P

You can add any conditions you like but need to be aware that the real estate agent and seller are going to choose the path of "least resistance" and in a hot market thats a cash offer with favorable settlement terms being 2 weeks or less.

In a quiet market its almost anything goes in regards to conditions but in a hot market its the cash buyers with no other conditions that usually come out on top assuming they buy a place with very little or no extra expenses to be outlaid. Can also go the other way where you may not opt for a B&P and end up with a 200k repair bill.

 

If you want to present an attractive offer - don't provide any conditions (go unconditional) and wave a 10% deposit bank cheque in front of the selling agent.

Go in with a strong initial offer too - low balling in a rising market won't help.

Cheers

Jamie