As a buyer, the typical process for making an offer, and negotiating the contract of sale, includes:
First, determine market value and consider asking price – Once you’ve found a property, look at recent sales of similar properties in the area to get an idea of its market value. Using this as a benchmark, next consider whether the seller’s asking price is fair or above market value. This will be a useful guide to help you decide how much to offer – you don’t want to overpay, but you don’t want to under-offer and risk losing the property to someone else.
Second, negotiate price – Determine the maximum you are willing to pay for the property, and keep this in your back pocket. This is your “bottom line”. Considering your market research, the seller’s asking price and your bottom line, float a reasonable offer past the agent to gauge how flexible the seller is on price. You can then decide on a formal offer to submit to the seller (which you do through the agent). If the seller doesn’t accept your offer, you can proceed to make further offers until you and the seller agree on a price, or you reach your bottom line. Remember that the seller may also be receiving offers from other buyers, so be as efficient and reasonable as possible so you don’t miss out.
Third, conveyancer to review contract – If the seller accepts your offer, get your conveyancer to review the contract ASAP. The agent is legally obligated to continue to submit all other offers it receives to the seller until you have exchanged contracts. Once your conveyancer has reviewed the contract, advised you of its terms, and negotiated any required amendments with the seller’s conveyancer, you can sign and exchange contracts – congrats!