What Should You Check Before Making an Offer on a Property?

You’ve found the property.

You love the kitchen, you’ve mentally arranged the furniture, and you’re already planning the housewarming.

Now the agent wants to know your offer.

Before you start negotiating, there are a few things worth checking. Because while making an offer is exciting, discovering an unexpected contract condition after you’ve fallen in love with the property is considerably less so.

1. Get the contract reviewed

A contract review before making an offer is a great place to start, particularly if you’re buying at auction or hoping to exchange quickly.

At MG Conveyancing, we review the Contract for Sale, including the special conditions, title and attached documents, and explain anything you need to know before committing to the purchase.

We also negotiate contract amendments where appropriate.

And don’t worry if you’ve already made an offer. An accepted offer doesn’t mean you’re legally bound to purchase. In a typical NSW residential sale, that happens when contracts are exchanged.

The important thing is to have the contract reviewed before exchange, not necessarily before you’ve told the agent what you’re prepared to pay.

2. Check your finance

There’s a difference between home loan pre-approval and formal loan approval.

Pre-approval is generally conditional. Your lender may still need to assess the particular property, arrange a valuation and confirm the loan.

Before making an offer, speak with your broker or lender about your borrowing capacity, deposit and any conditions that might affect your finance.

Because discovering the bank isn’t quite as enthusiastic about your dream property as you are is not ideal.

3. Know what you’re actually buying

That beautiful outdoor entertaining area? Make sure you know what’s included.

The dishwasher, pool equipment, outdoor heaters and other inclusions should be clearly recorded in the contract.

If the agent has promised something, tell your conveyancer so it can be addressed before exchange.

If it matters to you, get it in writing.

4. Do your own property checks

A conveyancer’s contract review is an important part of buying property, but it doesn’t replace your own pre-purchase enquiries.

Depending on the property, you may need to consider:

• Building and pest inspections
• Council approvals for renovations or additions
• Flooding, bushfire and other property risks
• Boundaries and the location of structures
• Strata inspection reports for apartments and townhouses
• Whether the property is suitable for your future plans

We review the information disclosed in the contract documents and raise appropriate enquiries with the Vendor’s solicitor, but that isn’t the same as independently investigating every aspect of the property.

Planning to renovate, extend or put in a pool? Tell us before exchange. The contract might contain something relevant to those plans.

5. Understand the cooling-off period

For most residential purchases by private treaty in NSW, there’s a five-business-day cooling-off period after exchange.

If you rescind during that period, you’ll generally forfeit 0.25% of the purchase price.

But there are important exceptions. The cooling-off period can be waived or shortened, and it doesn’t apply to purchases made at auction.

Which brings us to our next point.

6. Buying at auction? Be ready before you bid.

If you’re buying a property at auction in NSW, there is no cooling-off period.

If you’re the successful bidder, you’re generally committed to the purchase on the contract terms.

That means arranging your pre-auction contract review, finance and appropriate property inspections beforehand.

Saturday morning, standing outside the auction with your coffee, is not the ideal time to discover a contract condition you don’t like.

What happens after your offer is accepted?

An accepted offer is exciting, but until contracts are exchanged, the Vendor is generally free to accept another offer.

If the Vendor accepts a higher offer from another buyer after accepting yours, this is commonly known as gazumping.

Unfortunately, an accepted offer doesn’t secure the property. The best way to reduce the risk is to have your finance organised, contract reviewed and due diligence completed so you’re ready to exchange as soon as terms are agreed.

Buying property in NSW?

At MG Conveyancing, we help buyers across Sydney and the Central Coast navigate the contract and conveyancing process, without the unnecessary legal jargon.

Whether you’re buying your first home, upgrading or downsizing, we’re here to make sure you understand what you’re signing.

Because surprises are great for birthdays. Property contracts? Not so much.