The Best Way to Make an Offer on a Property

The Best Way to Make an Offer on a Property

25 September 2023

As a buyer, it can sometimes be difficult to know the best way to go about making an offer on a property, particularly in a competitive marketplace where every agent seems to have a different system or process for managing offers. And the last thing you want as a buyer is to find your dream home and then miss out simply because you didn’t understand the process.

To make this easier, this article will pinpoint for you the various different methods and means of submitting an offer, so you will know exactly what to do regardless of which agent you are dealing with.

 

Verbal Offers

A verbal offer is when you communicate to the agent who is conducting the sale of the property that you wish to make an offer to buy it – Either in person or over the phone. This is fairly commonplace, but whilst it is certainly important to communicate your intentions to the agent, it is essential that this is followed up in writing, as a verbal offer carries no legal weight whatsoever.

Many buyers have been caught out by this, having told the agent at an inspection that they were willing to offer a certain amount, only to see the property sold to another party at a later time without even being notified or given a chance to negotiate.

By all means, you should speak to the agent at the open house or inspection to signal your intentions to make an offer, but do not rely on this alone; It even states in the form 6 selling agreement between the agent and vendor that they are not required to even communicate verbal offers to the owner. If you want to make sure that your offer is reaching to the owner for consideration, it needs to be in writing.

EOI – The Expression of Interest Form

A common method employed by agents in order to record and communicate offers to an owner is via an expression of interest form (or “EOI” for short). This is basically a term sheet or heads of agreement, in which the main terms of the offer are itemised, so that they can be presented to the seller who can then make a decision on whether or not they want to proceed to contract.

The actual format of the EOI form will differ from agent to agent, but for the most part they all serve the same purpose – To summarise your offer for the owner’s consideration. You will commonly be either asked to fill this out at the open house and leave with the agent, or fill it out later and return via email.

This method is very common amongst agents, particularly in today’s hot market with buyer interest at an all-time high, in which case there needs to be in efficient means of recording offers without taking up too much time.

Generally, if there are multiple offers on a property, they will be recorded on expression of interest forms, communicated or sent to the vendor, and once an agreed offer has been reached, and official contract of sale is then issued.

Electronic EOI

An electronic expression of interest is basically the electronic equivalent of the above – This will normally involve you registering your interest at inspection, being then sent a link to the agent’s website, or some third party platform which facilitates property offers, where you can then enter the details of your offer electronically and then submit it to the agent via email.

Once again, this is a very efficient means of managing the offer process, and if an agent is deploying this technique, then that is a good sign you are dealing with an agency who is technologically adept, and good with systems.

It’s worth remembering however, that similar to the hard copy expression of interest forms, these are not legal and binding documents. While a written offer in the form of an EOI does necessitate the agent communicating your offer to the vendor, until a full contract of sale is signed and dated, you do not have a legal agreement to buy the property.

Old School – Put it on contract

A long-forgotten method of recording offers, once upon a time agents would do this as a matter of everyday process. This usually involves meeting with the agent in person and signing off on a contract of sale (COS) which is then presented to the owner for their consideration. These can also be communicated and submitted via email in PDF format or alternatively (an increasingly commonly) via DocuSign or some other e-signature platform. It is the best and most sure-fire way to ensure that the owner knows that your offer is serious; If you commit your offer to an actual contract of sale, that makes it a formal written offer to purchase the property.

Should the seller accept and sign in this instance, you then have a legal and binding agreement to purchase the property. In the past, many agents would do this as a matter of habit as there was simply no other accepted way, however in the modern-day market with large buyer numbers, and in some cases dozens of offers being submitted on a single property, issuing and signing off contracts for every single offer has become impractical. As a result, the hardcopy and/or electronic expression of interest process has developed in order to better facilitate the overall process. With this being said, if you really want to make your offer stand out amongst many others that are likely being submitted, a very good way of doing this would be to commit your offer to a COS.

Simply contact the agent to request a copy of the blank pro-form template contract, fill it out (you may want to get some legal advice first though), and return. This alone may make your offer stand out to the owners. At least they will know you’re serious.

Til next time, ciao 😊

 

Disclaimer: The information is this article is for general information only, it is not intended and should not be considered as either legal or financial advice. The information contained herein should not be relied upon solely and all parties are encouraged to obtain their own independent advice before making any financial decision.
Lee Knutsen

Article by Lee Knutsen

Co-founder & Managing Director of House, Lee Knutsen first entered the real estate industry in 2006 as a residential sales specialist. After more than a decade as a sales agent…

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