Presenting an offer

I think it's splitting hairs a bit as sometimes negotiations, even via contract (crossing out and counter-signing etc) can take days or even weeks depending on market conditions and usually the first offer isn't accepted anyway (...and if it is I'd be kicking myself to be honest!)

I'd say having a contract wrapped up within hours of an initial offer would be relatively rare as it would mean essentially no negotiations took place. I was more referring to the fact that if I make a verbal/email offer and it's accepted at say, 5pm or whatever deadline I've set, it could take me 24 hours to get it onto a contract depending on my commitments the next day.

One of the biggest mistakes I see that leads to an investor overpaying for a property is rapid-fire negotiations trying to get it all done too quickly. There's a very strong element of psychology in negotiations and part of the skill is assessing the vendor's position, the market conditions, agent's demeanor and either tightening or protracting the negotiations and the period accordingly. Time limits do place a certain pressure on the vendor but there's no hard and fast rule.

Gazumping can and does happen of course but if the market is that tight that I have an in-principle offer accepted with a serious threat of gazumping before I get the contract to them hours later then I probably wouldn't be investing in that particular market anyway!

As I said, each to their own and there are many ways to skin a cat. Investors just need to find a happy medium between what works for them and getting the best result possible.

Cheers

- Andrew

 

As a seller I've always instructed agents to only bring me offers on paper and with a deposit. For me this a serious buyer and if need be I can enter into negotiations knowing this. In my experience verbal offers, emails really don't carry much weight as even if accepted, there's always things that come up between the initial agreement and contracts...ie terms, clauses, inspections etc.
Contract offers you know exaxtly what you are agreeing to.

Same goes as a buyer, I'd want everything on paper and a signed contract as soon as possible. I'd hate to get pipped at the post by another buyer, while i'm agreeing to a price via email/verbally, they swoop in with a contract and deposit.
Creating urgency to secure a property, without seeming too keen and paying overs is an art form..

 

On paper, on a contract, with a cash deposit of any amount also carries no weight.

Until full agreed amount and exchange, it is all just an act.

I have sold and bought for 30+ years, indeed before e-mail, used to almost always be verbal, never any money until signing contract in later years when NSW had the holding deposit that takes the place off the market (or is meant too).

So you may think it is safe, or your safe, but your not, in NSW if you pay the .25% and sign contract your pretty safe, but I am not even sure how safe that is, I have not been in a situation where it is tested, until exchange, I think you have nothing that cannot be reversed.

 

Actually, seeing were discussing this, may as well see if there is any difference in any of the states, I am pretty sure we will find that all states, until exchange, you have nothing, no matter what money or what you signed or dance you have done, ignoring auctions where if you win, seems most states the place is yours.

NSW - until you pay the agreed deposit in full and clear & then exchange, you have no contract, either can walk away, after exchange, buyer can walk if they forfeit .25% in 5 business days.

 

I think it carries plenty of weight, offer comes in on a signed contract with consideration.. Vendor signs contract and copies are returned to buyer, house of now off the market.

Not sure how this constitutes having a no weight equivalent to verbal negotiations or emails..

 

No, no weight at all, if you notice what transpired for the OP, seems vendor clearly not interested or agent making that call, your signed contract and consideration are just going to annoy.

if your talking about another scenario, then ok, let's see how that would go in NSW....

You send a signed contract and some money of a token amount via the agent, I say yes, ok, let's run with that, agent informs my solicitor or conveyancer. Next morning, agent says we have another verbal offer & it looks far better and buyer seems ok, ok, I tell my solicitor forget this connor person, let's go with this other one, you have not paid full deposit in clear and no exchange taken place, your out, paper contract and money all for nothing.

You see, I said it here.....

You can write the offer on a contract, toilet paper, in sand, or just verbal it, until the above takes place and is executed, you have nothing. To a stupid agent and vendor, somehow it may make a difference, but it does not change the facts.

You cannot even do it your way unless your deposit is the full amount in the contract, not a token amount, so even if you were dealing in person with the vendor direct, they can still pull out up until you have a legal contract, even with a legal contract, even then, it won't guarantee 100% you will get the property.

 

Totally agree with this, and happens regularly.

But if a buyer and vendor, agree on price, contract is signed and deposit is paid. House is off the market. Based on what you're saying, the vendor can still accept offers on the property, even after this is done....and enter into another contract.. If this is the case we'd be seeing many buyers wanting to pay in full and settle as soon as a price is agreed to!! Especially if they've got a bargain. But this is just unrealistic.

Obviously nothing is ever 100% until settlement and you take possession, but surely the above constitutes a binding contract and could be enforceable.

 

Yeah, but hang on a tick, your talking of a different stage of the proceedings now

Nothing has been agreed at offer time, even the deposit price for the contract is unknown. So I was saying your method in the early stage may not be any more effective, or less effective, than another method. A lot of this will depend on agent and what they know too, or how good they are at the job.

If a buyer and vendor agree & both proceed to sign and exchange and the full deposit paid to make binding, then yes, at that point off the market and advantage is with buyer who can walk still under cooling off.

Once cooling off has passed, advantage again goes to vendor, as a buyer there is little you can do if say a divorcing couple make up and decide not to sell, are you really going to try and force them ? they, on the other hand, can cane you if you do not perform.

The reality is, that if your past the offer stage and all in agreement, it will usually go ahead.

 

You would typically not provide a contract and deposit for the first low ball offer, but for your best and last offer (which might still be lower than asking price). This means that the seller is one signature from the sale (still far from this is still verbal or email) and if you do not proceed you loose your buyer forever. This technique just add weights to a best and final offer, but you need them to walk away if not accepted.

 

We recently had an offer over of $320k for a near new home backing onto parklands when asking price was $,420k at market price. The offer was so insulting we refused any further negotiation. We informed the agent to not bother us with insulting offers ..best to make a respectful offer closer to the market value of the property (cheeky offers are ok if they are at least in the lower market value ballpark)

 

This seems like a great strategy. I'd like to attempt this. Is the exit clause anything special and does it have to be written by a solicitor for it to be valid? Or, can I DIY?