Making an offer on a house/land
 

Hi everyone,

What's the standard procedure when making an offer on a house or land for sale?

We have been advised by one estate agent that all offers have to be made by signing the contract - is this correct? or should we be able to make a verbal offer first?

This will be our first house or land purchase over here so any advice would be most welcome.

Cheers
Jo
:thumbsup:

Re: Making an offer on a house/land
 

Having just bought a house. I (you) sign the contract with the EA and it only becomes valid if the seller countersigns (acceptance). Then it is binding unless specified conditions are not met e.g. Cooling off period, buildings & pest inspection (unsatisfactory) and any other specified conditions etc...

By Law, the Agent has to go through all this with you to make it clear what your obligations are.

Good luck. :thumbup:

Re: Making an offer on a house/land
 

It's a big purchase Jo, best to be fully aware of the process http://www.qld.gov.au/housing/buying-owning-home/

Re: Making an offer on a house/land
 

When looking at house prices, start by finding out what the official land value is. In Queensland the Valuer-General each year issues a valuation for every parcel of land in the state: that is the value that the council's use to determine the rates, and is supposedly the value of the land without a house built upon it. It should include the value of any improvements done to facilitate development, such as levelling, retaining walls and site drainage, and will basically be the lowest price you would pay for a totally uninhabitable house prior to knocking it down and rebuilding.

So if you look at two identical houses in nearby streets which are priced $50,000 apart, check whether the land valuations vary by that much.

Re: Making an offer on a house/land
 

Queensland the Valuer-General...now thats interesting...thanks:goodpost:

Re: Making an offer on a house/land
 

Yeah, it's a formal offer where you are expected to commit to a deposit amount. No offers unless you are sure it's the right place and that you can afford it.

Re: Making an offer on a house/land
 

That is right, offer needs to be in writing in QLD. The key point to note is your offer will be subject to finance (make sure it is) which means you are protected anyway.

With that said, generally with house and land packages the price is set. Ie, you dont really "make an offer" as such, you take it at the price its listed for. Reason - if they have heaps of blocks of land and they sell one to you for 195k when asking price was 220k, then that makes every other block of land the same as yours, worth 195k and we will have problems with bank valuations.

What they will sometimes do is still sell the land to you at 220k but then give you a settlement rebate of 20k etc. This still lists the sale price as 220k but you get 20k back later. This creates problems as well with financing but thats for another day.

The key point with house and land packages is there are 2 contracts. It can get a little tricky as to get full bank approval on the entire purchase, you need both the land contract and building contract along with full building plans and specifications.

The problem is you often wont have the plans and specifications for some time as these need to be drawn up, you need to pick what colour paint you are having, types of kitchen, tiles etc.

while you are doing all that, time is ticking away on the land contract.

So 2 options:
1) you either buy the land, finance and settle (ie, take ownership) and then once the build contract is ready you go back to the bank for finance on that (depending on your situation could be risky), or
2) you keep the finance clause extended on the land contract until such time as build contracts are ready along with plans and specs. Once you have all this, you then get finance approved on the entire purchase (this is the low risk way and preferred as you get finance for the entire project sorted).

My suggestion to all my clients is always option 2. Option 1 has risks but if you have heaps of deposit/savings to use then either option would be fine.

There is some limited further information here on house and land packages:

http://buildingloansaustralia.com.au...age-home-loan/

Re: Making an offer on a house/land
 

Have you an idea what you want to buy? ie buy the land then choose a builder then build, turn key (all of the first but already or nearly built) or an established home. If its an established home you view it, put an offer in of what you would like to pay, sign the papers and then its handed over to the vendor who will either accept your offer or refuse it, then you counter offer if you want to and the process starts over again. We have done all 3 and at first it seems very different from the UK but once you get your "head" around these differences its a very easy system as dates are chosen for completion, in WA all the work is done by a settlement officer of your choice. Just make sure that you know your max limit on your budget and stick to it (if building it is very easy to blow your budget by upgrading your choices of fittings etc), it can be a very exciting time, good luck and hope your new home is little piece of paradise.

Re: Making an offer on a house/land
 

I've attached an annexure of clauses to my contracts, subject to legal advice on the contract 5 days, 14 days for searches(check with council as you may need more), buildings and pest, valuation. The estate agents say you need to sign a contract to put an offer in but the solicitor I'm using says it leaves you open for problems, hence all the clauses.