- The seller should ensure the buyer can afford the purchase of the home.
- The seller should ensure the buyer is aware of caveats such as the 72-hour clause, and the rules governing latent and patent defects.
- Should the seller accept the first offer on their house, even if it’s a lower offer?
The offer to purchase is a binding agreement. You can’t look back after signing it, so make sure you know everything you need to know about the buyer and their offer before doing so.
We recommend hiring an estate agent to give you the ins and outs of the property market so you can make an informed decision. We’ve also provided a rundown of the things a seller should consider when accepting an offer on a house.
8 Questions to ask before accepting an offer on a house
- Is the buyer prequalified?
- Does the buyer have a home they need to sell?
- Does the buyer have a deadline for the offer to be accepted?
- Is the buyer aware of the 72-hour clause?
- Is the buyer aware of laws governing latent and patent defects?
- Should I accept the first offer on my house?
- Should I accept a lower offer on my house?
- Has the buyer purchased properties before?
1. Is the buyer prequalified?
If the buyer can present the seller with this information, it at least provides assurance they will qualify for the home loan they need to purchase the property.
2. Does the buyer have a home they need to sell?
If the buyer’s purchase is dependent on them obtaining the funds through the sale of their current home, it could delay the process significantly. Take this into account and get your estate agent to investigate the likely timeline on the buyer selling their home.
3. Does the buyer have a deadline for the offer to be accepted?
Normally, there is no set period in which the seller has to accept the offer to purchase, although the industry standard is 24 to 48 hours.
Find out if the buyer has stipulated a deadline for the offer to be accepted. This should be included in the offer to purchase.
4. Is the buyer aware of the 72-hour clause?
The 72-hour clause means the seller can continue to advertise the home, and if they receive a better offer, sell it to the new buyer BUT ONLY after giving the original buyer 72 hours notice. The original buyer then has 72 hours to complete the terms of their offer or the home will be sold to the new buyer.
5. Is the buyer aware of the laws governing latent and patent defects?
The buyer needs to be aware that there’s no obligation on the seller to fix any defects, and that the seller can only be held liable if the buyer can provide proof the seller hid the defects.
This applies even to patent defects, which are defects that the buyer is aware of when making the purchase. The buyer can request that the seller fix these defects, but if the seller refuses, the buyer has to decide whether to go ahead with the purchase.
6. Should I accept the first offer on my house?
An old adage amongst estate agents is that the first offer is usually the best offer. Reasons for this include the fact that the house value will erode the longer it stays on the market.
7. Should I accept a lower offer on my house?
It depends how much lower. An offer within 10% of the listed house price should be given serious consideration. Furthermore, if it’s a buyer’s market you may have to accept lower offers.
8. Has the buyer purchased properties before?
If they have, they’ll be more familiar with the process. First time homebuyers are more skittish and may withdraw the offer if something takes them offguard.
A note for buyers…
As mentioned above, the seller is more likely to accept your offer if they trust in your likelihood of getting a home loan approved.
Applying with a home loan comparison service such as ooba Home Loans increases your chances of home loan approval, as we submit your application to multiple banks. This also allows you to compare packages and choose the one that best meets your requirements.
We also offer a range of tools that can make the home buying process easier. Start with our Bond Calculator, then use our Bond Indicator to determine what you can afford. Finally, when you’re ready, you can apply for a home loan.
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