The best way to make an offer is to ask the Real Estate Agent for a copy of the Contract of Sale and make a formal offer. Why? Because once your offer is formalised, the real estate agent is legally bound to present it to the seller. Now, isn’t that a game-changer?
That’s why we can’t stress this enough – when you’re ready to make an offer on a house, make a formal offer. This is a powerful way to enter negotiations, as each party can see very clearly what the particulars are in relation to the purchase
Some Real Estate Agents hand out “Letter of Offer” Forms that can be completed and returned. While this may simplify the process for the agent, it does not assist the buyer or the seller. A verbal offer or “Letter of Offer” may appear straightforward, but they lack terms and conditions and aren’t binding, making them disadvantageous for both parties. At some point, a verbal offer or “Letter of Offer” must be formalised into a fully completed offer document with all the parties’ details and terms and conditions. This is crucial to avoid any miscommunication or renegotiation.
As a buyer, you should know that a seller will take your offer more seriously if it’s formalised. Also, as a buyer, I am sure you would like to know all the details pertaining to the property prior to making an offer. For example, what items remain with the home, easements, and any special conditions that the seller requires. All these things and so much more should be detailed on the contract form, and you negotiate with awareness of all of this.
Now, imagine being a seller for a moment and having an agent lay out a formal, signed offer with all the details and conditions vs. receiving a letter of offer (which is not binding for either party) with a vague proposition. Which do you think carries more weight? Which one do you think you would consider more serious?As the seller, if you sign the formal offer, you are under contract right there. The “Letter of Offer” really means nothing until formalised.
A seller will also consider why a buyer might prefer to make a verbal offer or “Letter of Offer”? Reasons may vary they might evaluate multiple properties and not want to commit to one; they might find the process tedious; they might want to negotiate verbally to test the waters; or they may simply be unaware of the offering process. All these reasons put doubt in the seller’s mind about the seriousness of your offer.
Queensland real estate contracts typically include conditions such as finance, building & pest inspection, body corporate searches, and further due diligence, among others. You can negotiate these conditions throughout the contract process, and it’s crucial to present your offer to the seller in contract form, including all relevant details. Your offer should comprise the buyer’s name, solicitor/conveyancer information, purchase price, deposit, finance, inspections, special conditions, and the settlement period. This gives the seller a complete picture, not just the purchase price.
If you find yourself in a multiple offer situation, which is governed by specific regulations, having your offer in contract form allows the seller to sign immediately, creating a legally binding contract or counteroffer.
Once the offer is made, the seller can either sign the contract, end the negotiation or make a counteroffer. This process continues until an agreement is reached or negotiations cease. When an agreement is reached, the contract is dated, and copies are sent to both parties’ solicitors/conveyancers. Most agents use standard contracts approved by the Real Estate Institute of Queensland or the Queensland Law Society. Always remember the conditions that accompany an offer can significantly influence a seller’s decision to accept a particular offer.
If you want to be taken seriously as a buyer and have your offer considered by the seller, always complete a formal offer on the contract.