Whether you are a property buyer or seller, putting down a price offer can spell the difference between closing a deal or walking away with nothing.

One of the biggest deal-breakers when putting an offer is when it is made without the benefit of hindsight or one made with a gut feeling, rather than a realistic one.

This usually happens when potential buyers want to gamble or apply some psychological pressure by making an offer thinking it may be good enough but without a thorough assessment of how much a property is approximately worth.

Indeed, making a fair offer can be tricky and nerve-wracking if you do not know how it works.

There are several ways to help buyers or sellers determine how to make an offer with confidence, and make it without regretting it in the long run.

Here’s how.

Plan and develop a strategy

Before anything else, it is crucial to set a budget and one that you can confidently offer on a property based on your financial capacity or with available resources at your disposal.

The reason why is that it could save you from wasting valuable time searching for properties that you are you could not afford in the first place or take out a loan but would be unable to comply with regular payments.

For first time buyers, start researching if you qualify for any sort of government grant or incentive such as the First Home Loan Deposit Scheme.

Establish your budget by calculating how much money you need to put up for a deposit because it is a standard in the Australian real estate market for homebuyers to have a minimum deposit for a home loan from 5% to 20% of the value of the property.

Also, consider incidentals such as building reports, legal fees, stamp duty, and insurance such as the Lender’s Mortgage Insurance if the deposit amount is less than 20%. Other costs may vary depending on your existing financial standing, making it important to consult a lawyer or a real estate agent about cost details that apply to you.

One option is to take out a home loan pre-approval application, which is a great way to find out if you are qualified and your loan eligibility as a borrower.

Do your research

Due diligence is critical in the real estate buy and sell process. So, having the right information for the property you have your eyes on and researching its fair market value will help you get started in planning your offer.

Here’s how your research can be done and prepare you to make your offer with confidence.

• Check the location

Look at similar listings in the area to help you get hold of real estate property prices or values so you can compare them with your desired property options.

Also check for the area’s crime rates, availability of commercial establishments, public and private transport options, property value fluctuations, schools, churches, etc. It will give you a clear and better picture of the property’s viability, safety, overall liveability, and property value.

• Get a property valuation

Getting a property valuation done by a professional independent valuer is one way to get an accurate value appraisal of the property. Professional valuers can do a detailed written report that details the approximate market value of the property and other factors that help determine the property’s value based on its current state. 

Costs may vary as well and the details provided, so find one that provides valuable and relevant information that is relevant to your needs.

• Weigh the risks and conditions of the property

It is always important to beware of what constitutes the asset that you may acquire such as your real estate property, which should also include the condition and risks associated with it.

For instance, if the property is located in a flood-prone area it may be susceptible to flooding or the house could be made from materials containing asbestos and may cost a lot for remodelling. 

Being aware of such risks can help you get better bargaining leverage when making an offer.

Other considerations include checking all supporting documents for the property and reading through them intently. 

Ask a real estate agent if a pest report or building inspection was made before making an offer so you are aware if those were done accordingly before making an offer.

You may also check with the local council if the property is located in a bushfire-prone region because bushfire-prone locations have specific construction standards for protection when constructing or renovating a house.

Also check with home insurance providers to determine the costs of home insurance premiums and check for factors, as well, that could affect the current property insurance costs and coverage.

• Why sell?

Full details of what motivated the property owner or vendor to sell the property may not be readily available, but it can provide you with a good idea of how you can relate and understand their needs which can be used to leverage your offer.

For instance, the owner may not divulge the reason for the urgency to sell, but the absence of furniture or fixtures are -tale signs that the owner could be moving out soon. Leveraging this could help you set a good price for your offer since it would indicate the seller is in a hurry to sell the place.

With all this information made available, you may have a good idea about an offer that you can make and may give you good value out of the deal.