The sale and purchase agreement
An offer is usually made through a sale and purchase agreement, a legally binding contract once both parties sign it, setting out the price, any conditions, and the proposed settlement date. Common conditions include finance approval, a satisfactory building report, a LIM report, and sometimes the sale of your existing property. Your lawyer should review the agreement before you sign, not after.
The different ways a property might be sold
- Auction, buyers publicly bid until the highest price is reached; the winning bid is usually unconditional immediately, so your finance and due diligence need to be sorted before auction day.
- Tender, buyers submit confidential written offers by a set deadline; the seller can negotiate with any tenderer afterwards and isn’t obliged to accept the highest figure alone.
- Deadline sale, the property is marketed with an advertised end date, but the seller isn’t obliged to wait and can accept an offer earlier if it suits them.
- Price by negotiation / asking price, a more traditional back-and-forth between buyer and seller, relayed through the agent.
Multi-offer situations
Sometimes more than one buyer is interested in a property at the same time. In a genuine multi-offer process, the agent asks each interested buyer to submit their best offer, there must be more than one real offer in writing for this to happen; an agent can’t pretend there’s competing interest that doesn’t exist.
Be ready to move before you’re in a serious offer situation
Because auctions and multi-offer situations can move quickly, having your finance pre-approval, lawyer, and building inspector already lined up (see thinking of buying) puts you in a genuinely stronger position than trying to organise all three under time pressure.