Make Your First Offer Your Best

Disclaimer: This information is intended to be of a general nature. Please do not rely on any of the content as being a professional tax or legal opinion and seek your own independent advice.

With many agents reporting strong competition for quality property across most price ranges nowadays, buyers will often find themselves making an offer to purchase in competition with others.

Agents have differing approaches as to how to deal with multiple offers but normally will inform buyers that their offer is one of many. Details of competing buyers’ offers are not normally revealed so as a buyer offering in competition with others, it is difficult to know what price and conditions will ensure purchasing success without paying far more than the next highest offer.

Buyers ought to remember that agents have a legal obligation to act in the best interests of the seller unless it is unlawful or unethical to do so. They are paid to ensure the buyer pays the highest possible price on the best possible terms.

One of the most effective ways to achieve this and discharge their fiduciary responsibility is to have multiple purchasers competing to buy. Naturally, buyers don’t like having to compete and it is almost impossible to gain a negotiable advantage in such circumstances.

When faced with buying in competition my advice to buyers is this:

Ask the agent if there are any other offers on the property before submitting your own offer. This knowledge might influence your initial offer.

Consider removing some of the conditions of your offer such as a Building Inspection Report clause especially for more modern homes

Ask the agent about the seller’s preferred settlement period and try to make your offer fit in with their needs

Consider shortening your time for finance approval if it applies and make sure you have a pre-approval in place to give to the agent

Insist the agent keeps you informed and that you be given another opportunity to change your offer. The agent is not obliged to do so but will be more inclined to if you ask.

Make your offer your best and final offer if you are not the first offer and be comfortable that if you miss out you gave it your best shot. Buyers that miss out on a property will often lament afterwards that they would have paid more.

Let there be no regrets. In this current market, of short supply and increasing demand, now is not the time for buyers to play hard-ball in negotiating a purchase.

by Hayden Groves
REIWA President
REIA Deputy President

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