buying

tips for buyers

Offers and Acceptance

Our Sales Consultants at McDonald Real Estate are regularly asked about the rules of offer and acceptance by people who are unclear about the process when buying a property, so here are some of the basics:

A purchaser's offer places a vendor under no obligation to accept it.

So, when is an offers formally accepted? This occurs when the vendor signs the contract and the contracts are exchanged between the vendor and the purchaser. At that point there is a binding contract.

Verbal offers are rarely, if ever, binding on a purchaser or a vendor.

A contract contains details of the sale – the name of the vendor and purchaser, the vendor's estate agent, the price, the deposit paid, the balance owing and the terms of the contract.

Purchasers can make their offer subject to acceptance by a fixed date and time.

If the offer is not accepted by the specified date and time it will lapse. A prudent buyer will always require an offer to be accepted by a set date. It is the agent's duty to promptly submit all offers to the vendor, unless the vendor specifically asks that only offers above a certain price are submitted.

Cooling-off rights apply even when an offer has been accepted by a vendor unless the property is to be auctioned or the purchaser has obtained prior legal advice.

Tips for Bidding at Auction

Auction

an auction is one of the two main methods of sale and in melbourne they account for around 30 per cent of all property sales. at an auction the property sells to the highest bidder as long as the vendor accepts the price. unlike private sales, there is no cooling off period when purchasing at auction.

Private Sale

private sales account for around 70 per cent of all property sales. unlike an auction, the property is advertised at a price and is then negotiated between buyer and seller. purchases made this way generally have a cooling off period of 3 business days.

Vendor's Statement (also known as section 32)

this document is prepared by your solicitor and contains details of your property including a copy of your title, plus zoning and rates certificates. even if you haven't chosen your agent yet, preparing your vendor's statement as early as possible means your property will be advertised sooner, and buyers will see it earlier.

Deposit

your buyer must pay a deposit to your agent who must keep it in a trust account by law. this is usually 5% or 10% of the agreed sale price, and becomes payable to you upon settlement, sometimes earlier if both parties agree.

Settlement Period

this is the period of time between your contract becoming unconditional and the day you move out and get paid your whole selling price.