Things to know when making or accepting an offer to purchase

Finding the property you have always dreamed about is a great thrill for many people.  After you have found it, it is time to make your offer to purchase on the house. There are different factors that have to be considered when you are selecting the price level so as to get a deal that is most suitable for you. It is important to take one step back to look at things with a more logical perspective. Always weigh all the things that really matter before you decide to make the offer to purchase.

The buyer

Buyers that don’t have mortgages that are pre-arranged, buyers who don’t have a chain, and first time buyers always have a head start on the competition. It is important to make the seller and the agent aware of this if you fall in these categories. This can allow you to have a great negotiating position, most especially in the case where the seller is within a chain.

The position of the seller

It is always important to check whether the seller is in a hurry or is willing to take some time. Sometimes the seller could be willing to settle for a lower price just to be able to sell quickly. If a seller isn’t in any hurry to move, he may hold out on the property so as to get a much higher price.

The Offer To Purchase - Gazumping and Gazundering

  • Gazumping: this is the term that signifies a situation whereby the seller has already accepted an offer to purchase but then accepts another one from someone with a higher offer to purchase. This is actually legal and the only way to reduce the risk is to take the property off the market. This usually happens in the sellers’ market.
  • Gazundering: this is where the buyer makes a reduction on the offer to purchase just before the exchange of contracts so as to try to force the seller to take much less for the property. It is legal.

Budget

The other thing you should know is the budget ceiling that you are within. This allows you to make up your mind about the maximum limit and stand by it. If the seller doesn’t want to settle, you should try to find out whether the property deserves the extra money. It is important to find out the worth of the property. Check the current competition and if there aren’t many other such properties, the seller may be at an advantage. Check for faults and any repairs that are needed as you may be able to get a lower offer to purchase.

After the offer to purchase

When you make the offer, it is very important that you make it very clear to the seller and the agent that the offer is subject to a satisfactory survey and to a contract.

 

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