Property - sealing the deal



By LIZ MCDONALD - The Press Last updated 10:34 17/02/2010



TO AND FRO:
Offers and counter offers are just part of the buying process.
After weeks of negotiating impossible-sounding real estate advertisements, disappointing open homes and perky real estate agents, you have finally found the place for you. The style suits, the location is ideal, and the asking price is in the ballpark.
The next step is to make the vendor an offer.
An offer to buy a property sets out the price you are prepared to pay and the conditions of sale, and details such as the date when you would like to take possession and move in.
The easiest real estate sale is when a buyer makes an offer, the vendor accepts with delight, and the packing begins.
In reality, a more likely scenario is that an offer is followed by much to-ing and fro-ing and several counter-offers as buyer and seller try to settle on a mutually agreeable price and conditions of sale.
Finding a price
If you have finance arranged, you will know your price limit, and if you have been looking at homes in the area, you may have an idea of the market value of the property you want.
If in doubt, look at other homes in the neighbourhood for sale as a comparison. Websites such as terralink, QV, zoodle and suburbwatch will provide you with information about prices in the area for a small fee, with some basic information available free.
You can also pay for a professional valuation (average cost about $450). Talking to the real estate agent handling the sale might give you an idea of how much the vendor wants if there is no firm asking price, but remember the agent is working for the vendor on commission and should be trying to get the best price possible.
The paperwork
Once you know your price, you can make an offer by filling in a sale and purchase agreement, which the real estate agent will have. (In the case of a private sale, the vendor should have copies of the forms.)
However, before you make an offer, the new real estate laws say your agent or salesperson must give you a written guide on the subject, which you then sign to say you have received.
This little booklet is put out by the new Real Estate Agents Authority, which also makes copies available on its website.
The sale and purchase agreement will state the names of the parties, the address of the property, the type of property title it has, the offered price, the deposit required, the settlement date and any conditions.
Conditions could include the sale being dependent on you selling your existing property by a certain date, what items are included in the sale, finding suitable finance, having a valuation completed, obtaining acceptable reports from a house checker, engineer or builder, having the vendor repair or alter an aspect of the property, and/or obtaining acceptable LIM and property reports. It is advisable to get a lawyer to check the offer before going ahead.
The deal
If the vendor likes the offer, they will accept by signing it. If they are not happy with your price or conditions, they will make a counter-offer indicating what would be acceptable to them. They may suggest a higher price or put in conditions of their own. Changes to the offer document all need to be initialled.
You can then counter-offer back, and this can continue, with the real estate agent passing the document back and forth, until an agreement is reached. Once this happens, you will need to arrange to pay the deposit (usually 5 per cent or 10 per cent).
This will be held in trust until the date of settlement, at which time the balance of the price is paid and ownership is transferred.
There can be more than one offer on a property at once, as a vendor may take back-up offers in case the initial deal fails.
While an accepted offer in the form of a sale and purchase agreement is a binding document, both parties have ways to get out of the deal by using the various conditions while it is still conditional.
Once the agreement becomes unconditional, both parties are legally committed to the purchase.

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