The Offer Part Two

Competition

If you are fortunate enough to have multiple buyers for your property, the whole equation becomes easier. Before you become complacent about having multiple buyers though, you must satisfy yourself that they are genuine buyers.

To decline a contract offer in favour of non-binding verbal offer can put your campaign into a tailspin, quite literally. Once a contract offer has been made, it’s best that all competing offers are submitted on a contract as a sign of genuineness. Any buyer that promises to pay more without signing a contract should be played cautiously.

Competition makes getting the sale easier, however, if you make the bidding process transparent such as a public auction or Dutch auction, you can easily undersell. Competing bids must never be disclosed as the buyers then focus on trying to beat the competition by $1,000. Use competition and confidentiality to extract every genuine buyers highest offer in a rapid time frame.

Non-price Agreements

Value for both parties can be created away from price. These potential agreements that add value for both parties are worth exploring if the offer is close to being acceptable. Issues such as delayed (or early) settlement, release of deposit, lease back, reduced deposit, inclusions or even some vendor finance on the difference can bring a negotiation together.

The more a real estate negotiation becomes about price, the less goodwill remains in place. If you are horse trading on such matters, always remember to take a concession if you give one.

Pre or Post Due Diligence

The pre-due diligence offer catches many sellers unaware. They accept the verbal or written offer and mistakenly think the property has sold. Suddenly, the building inspection brings up a raft of issues that causes the buyer to reconsider, or the buyer’s bank values the property for 10% lower than the agreed amount, scuttling the deal. Any offer that is made pre-due diligence must be considered an expression of interest rather than a formal offer. Take offers pre-due diligence seriously, but cautiously.

There Are No Rules

There are no rules around the governance of making, accepting and/ or rejecting an offer. The property is not sold or purchased until contracts have exchanged unconditionally. It’s common for the seller to ask the agent ‘How long do we have to consider the offer?’ An offer is an offer until the owner countersigns a buyer’s unconditional contract or the buyer withdraws from the negotiation.

It’s a mistake to think that a buyer will leave the offer on the table for a prolonged period whilst the owner chases a better offer. Complacency can bite during a negotiation, even in a boom.

If you do reject an offer, it’s worth noting that declining an offer does not guarantee a higher offer being made in the future. If you accept an offer, you will never know if a better offer was going to turn up next week, so don’t think about it.

Graham Lester

Graham is known for his passion and his drive to succeed in all aspects of his professional life. A man with a big vision.

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Graham is known for his passion and his drive to succeed in all aspects of his professional life. A man with a big vision, Graham has immense pride in the company he directs; and is particularly proud of having been awarded the BDH Cup in 2010, and becoming one of the top 10% of performers in Australasia while maintaining a 79% repeat and referral client ratio.

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