How to make the winning offer on a home, according to a real estate agent

Working out what to offer when hoping to secure a property can be fraught with anxiety. There are many factors that can impact the outcome, but interestingly, not all of them come down to price.

We spoke with Col Bernasconi of McGrath Long Jetty to understand how a buyer can put their best foot forward, whether it’s pre-auction or private treaty.

1. Research to work out your offer price

You need to strike a balance between what the market is dictating, what you think a property is a worth and what you’re willing to pay. And the best way to find out is by doing your research.

“Firstly, a buyer needs to know the market that they’re in and the competition around the property within that market,” says Col.

During the research, he advises buyers to avoid getting hung up on what the property was bought for years prior by the current owners. Instead, focus on you and what the property will provide or add to your life.

“How badly do you want it? Is it an investment? Is it a property that you’ll live in for five to 10 years? Is it in your school zone? Those are the considerations that should be top of mind,” Col explains.

“If you’re looking somewhere with room for growth, you need to know the area history via price growth charts,” he says. “If the property is a coastal property or located somewhere where you’re almost assured it’s going to grow in value, you can be a little more aggressive in your offer.”

Col also recommends paying attention to how many people are at the open home. If a property is very popular, this intel should inform the offer you make.

2. Ask for the variant guide

Of course, in order to work out the price, Col says you should be given a guide by the listing agent. But there’s more to the price guide than many realise.

“The Department of Fair Trading dictates that, by law, agents have to have a 10 percent range on their guide,” Col explains. “So a good question to ask the agent is what the 10 percent variant guide is on the property.”

If a property’s guide is said to be $1.8 million, for example, asking for the range on the Agency Agreement could reveal it’s actually $1.7 to $1.87 million.

“If $1.7m is the lower end of the guide and you absolutely love the home, why not be mathematical about it and make an offer in the middle of the guide? That would be a good start to show the vendor that you’re serious,” says Col.

“However, if it’s an investment with no emotion in it, you could make an offer around $1.7 million.”

Col notes that the mentality around buying to live versus buying for an investment are very different, and to not miss out on a forever home over a few thousand dollars.

“I’ve seen people miss out on their dream home over $10,000. Then three months later, when they’re still trying to buy in the same suburb, the median house price has risen.”

3. A written offer always counts

“Make your offer a real offer,” says Col. “Don’t talk to an agent on the phone and say a number verbally. Back it up with a written offer – a text message, email or letter.”

By law, written offers have to be taken to the owner, whereas verbal offers can be considered “floaty conversation.”

“In a hot market, telling an agent you’re interested is too weak. You need to be helpful to both the agent and owner – show you’re serious by providing that written intent.”

Col also mentions that as the sale process progresses, owners build familiarity with certain buyer’s names, which can put you in a better position.

4. Flexible terms are enticing terms

“A good deal for the vendor doesn’t necessarily mean the highest price,” explains Col. “The terms are very attractive and being clever about them makes your offer more powerful.”

Ultimately, most vendors want a suitable price as well as the best conditions – and often, it’s about striking a balance between the two.

The terms of an agreement can include your flexibility on settlement length and whether or not you’re willing to waive the cooling off period. But having your financials in order is also crucial.

“Before you talk money, it’s important to have all your ducks in a row,” advises Col.

“The buyer’s financial health is key. Firstly, to avoid putting yourself at risk, but also to show the vendor that you are serious and ready.”

Enquiring about settlement terms is the next power move. Col suggests talking to the agent about where the vendors are at in terms of settlement length. You can then mention in your written offer that you’re “flexible and cash-ready”.

Another tactic buyers can use to sweeten the deal is removing the cool-off provisions, which in New South Wales is known as a 66W certificate.

“A 66W waives the cool-off period, meaning the property will be sold that day,” explains Col.

Unconditional sale terms are a huge draw for vendors and one reason why auctions are so popular. By providing a 66W either pre-auction or during a private treaty bidding war, you’ve given your offer an edge.

As the buyer, removing the cooling off period does present risk. To minimise this, you would first need to be proactive about requesting or getting a building report done and sorting out your finance.

This risk does come with a reward: you can be more competitive around price. Organised finances, a settlement length tailored to the vendor and something like a 66W certificate makes you a strong buyer, one that will be hard to refuse.

5. Add a time limit to your offer

There are certain situations where the tactic of providing an offer with a deadline can create the right pressure on a vendor to accept your offer.

“If there is ambiguity around the guide or what a property will go for, you can make a strong offer but place a time constraint on it, so that your offer doesn’t sit there while they ring every other potential buyer and maybe reveal your price,” admits Col.

“However, you want to do it in a nice way.”

6. Write a letter

While Col never recommends turning up to a home to speak to a vendor, written letters are fair game.

“You can write a letter and hand it to the agent, explaining why you want to buy the home and why you’ve made the offer you have. A good agent should have been finding that information out about you anyway, but sometimes a letter can create understanding between yourself and the vendor,” he says.

However, Col warns buyers not to show their whole hand.

“As a buyer, be careful how much information you give away. If you give the vendor a sense that you absolutely have to have the property, they’ll think to themselves that you’ll be willing to pay anything to secure it.”

And when you’re 100 percent sure this home is the one?

“Help the agent help you. Better than a written offer is requesting the contract, signing the contract, putting the figure on there and even providing a cheque for the deposit, along with your 66W and your flexible settlement terms,” says Col.

“Then, all the owners have to do is decide if they’re OK with the deal – it makes it very easy for the owner to choose your offer”.