Four things every home buyer needs to know before making an offer

You’ve been dreaming about the perfect home, kept an eagle eye on the property market and diligently saved a healthy deposit. Now, you finally feel like you’re ready to buy. 

But there are a few more steps you’ll need to take before you’re ready to make an offer or bid at auction. Here are four things every property buyer needs to know to be in the best position to make a winning offer.

1. Know what you can afford

Working out how much money you can borrow by speaking to a broker or lender is an important first step in the home-buying process, as it will help determine your budget.

Based on a lender or broker’s assessment of your financial situation you might also be able to apply for home loan pre-approval, which will give you a clear idea of how much you can borrow and help you gauge what your future repayments will be. 

Knowing your borrowing power with pre-approval can help you determine the type of property you can afford and the areas that are within your budget. 

Pre-approval can also give you the confidence to make an early offer when you find the right property, potentially putting you ahead of other buyers.

2. Know how much it’s worth 

If you’ve inspected a property and you’re keen to buy, deciding how much to offer can be tricky. To help make an informed decision, it’s worth checking the estimated value of the property, as well as the latest auction results for your area. 

Knowing roughly how much the property is worth can help you decide on a reasonable offer, and give you an indication of the price the vendor would be willing to accept.

When deciding how much to offer, also take into account the market conditions in your area. If homes are in strong demand and there are few properties available, a higher offer may be needed to beat the competition. On the other hand, if there is a high supply of homes for sale and fewer buyers, vendors may be more willing to negotiate. 

3. Know what you’re getting 

While some buyers search for fixer-uppers, even the most experienced of renovators would usually avoid properties with severe building or pest damage. 

To save yourself from a world of unexpected expenses, it’s worth arranging a pre-purchase inspection report for the property you’re interested in before you make an offer.

A building and pest report is compiled by a building professional who inspects the property and looks for structural damage or deterioration such as cracking, leaks or rising damp, as well as pest infestations such as mice or termites. 

If you’re looking at apartments, a strata report will detail the financial health of the building and the owners’ corporation, and highlight any defects or potential problems buyers can expect in the future.

Understanding the condition of the property can not only help you avoid making an expensive mistake, but it can also help you decide how much to offer.

4. Know the neighbourhood

When inspecting a property, it’s important to look at more than just the home itself. Taking time to explore the street and surroundings, as well as the local neighbourhood, can be very informative and may ultimately sway your purchasing decision. 

It’s worthwhile researching the zoning of the property, as this can affect any renovation plans you might have and how the property can be used. It’s also worth enquiring with the local council about any upcoming developments nearby and how these might affect you.

During your inspection, don’t forget to look out for phone blackspots, street noise and traffic. It’s also worth taking note of the contour of the street and water drainage points, as well as trees on and around the boundaries of your property, as these may affect the property should flooding, fires or other extreme weather events occur. 

After your inspection, explore the neighbourhood. Visit parks, shops, cafes and restaurants to get a feel for the lifestyle and come back at different times of the day and night to see how it changes. 

Ready to make an offer? Make sure you’ve got the Domain app to help you along the way.