How to make an offer on a house

KEY POINTS
- Before you make an offer, consider consulting a conveyancing lawyer.
- Know what you can afford, stick to it, and be prepared to negotiate.
- An unconditional sale provides less flexibility to the buyer, who is unable to back out of the contract and could be exposed to legal action.
How do you make an offer on a house?
Making an offer on a property is done either via the real estate agent or directly to the owner if it’s a private sale.
There are three ways that are typically used to make an offer on a property:
- Verbal offer: You tell the agent what you would be willing to pay for the property and the terms of your offer.
- Written offer: Where you submit an offer in writing, whether by an email or document prepared by yourself, or by filling out a template offered by the real estate agent.
- Contract of sale: Where you fill out and sign a formal contract of sale. This must include details such as your offer, deposit (and when it will be paid), settlement date and conditions. It will be legally binding when the vendor also signs it (although there could be a cooling off period, during which you may be able to change your mind) and you pay the deposit. It could be worth consulting a suitably qualified lawyer before signing.
The ways you can go about buying a house may also vary depending on how the property is being sold.
There are three main methods to sell a property in Australia:
- Private treaty: When a property is advertised for sale by the owner, generally either at a set price, with a price range, or with advice that the owner is willing to consider offers over a certain amount. Prospective buyers can make an offer on the property, and the seller may then accept one of these offers, or enter into negotiations with a buyer or buyers for a sale price they find appealing.
- Auction: Where a group of buyers bid to buy the property, with the bid accepted by the vendor being the one that seals the deal. This is an ‘unconditional sale’.
- Expression of Interest: Similar to a silent auction or bidding approach, in which the real estate agent will set a due date from the time the property is listed. By that date, any interested parties are asked to submit their best offer, often with any conditions requested (e.g. the length of the settlement period). The real estate agent and home owner then review the offers.
What do I need to include in an offer to buy a house?
The exact details you should include in your offer will depend on the type of offer you make. You’ll generally need to provide:
- The price you want to offer
- How much deposit you’d like to offer and when the deposit is to be paid
- Settlement date and time (when the remainder of the funds will be paid to the vendor)
- Conditions of sale you require, like a building and pest inspection, or other checks or work to be done before you’ll consider the contract unconditional
- The contact details of your conveyancing lawyer
- Details of your mortgage lender
If you are making a verbal or written offer, you only need to disclose the information that you feel is appropriate. However, if you are signing a contract of sale, there is specific information that you are required to provide, such as the details of your mortgage lender (if you have one).
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What to consider when making an offer on a property
1. Think about consulting a lawyer
Before you make an offer, you may wish to first consult with a conveyancing lawyer who can outline your rights and obligations. A conveyancing lawyer specialises in the legal aspects of buying and selling a property, and may also help you negotiate a deal that works for you.
It’s often best to engage a conveyancer before you make an offer on a property or bid at an auction. An offer placed on a property can become a legally binding contract if it’s accepted, so engaging a lawyer early in the process can help mitigate any miscommunication surrounding the agreement.
For example, your lawyer may suggest including a clause which highlights that you will not proceed with the sale should the property fail any inspections undertaken by a master builder, surveyor or other inspector. This could include issues surrounding soil contamination, asbestos, structural issues, termites and more. They could also seek to ensure any fixtures or furnishings you expect to remain with the house are included in the contract, such as the dishwasher and light fittings.
A good place to start to find a conveyancing lawyer is the Australian Institute of Conveyancers or your state or territory’s law society. Ask family and friends, real estate agents or mortgage brokers who they would recommend.
Once you have some names, draw up a list of questions and contact each one to see who you feel most comfortable with.
2. Decision time: How much should you offer?
Commbank suggests five key steps to work this out:
- Learn about the market: Look at recent sales of comparable properties in the area. It can also be a good idea to look at the recent sale trends for properties in the area – are prices going up, down, or are they stable?
- Learn about the property: For example, how long has it been on the market?
- Learn about the vendor: Consider asking the real estate agent why the current owners are selling.
- Know what you can afford: Consider setting an upper limit, and be prepared to negotiate.
- Know your competition: Consider asking if there are any other interested buyers who have put in offers.
If you decide to offer less than the asking price, discuss your reasons with the real estate agent. If the prices in the area are going down, then consider offering proof of the most recent sales to help support your offer.
3. Work out your conditions of sale
When you make an offer on a home, you can usually choose whether it is conditional or unconditional. This will depend on your circumstances and the property you are purchasing, as well as whether you make your offer privately or at auction.
Unconditional offers can be a more desirable option for vendors as they can result in a quicker, more seamless sale. But conditional sales can give the buyer more flexibility and security.
Conditional sales
A conditional sale is simply a sale with conditions attached, such as the buyer’s finance being subject to approval, or building and pest inspections still to be conducted.
Including these sorts of clauses within a conditional contract of sale can provide more security to the buyer, particularly if certain checks have not yet been carried out or if certain maintenance needs to be completed before settlement.
There could also be less risk involved for the buyer should they wish to withdraw their offer, as a clause can be written to provide 7, 14 or 21 days to finalise their decision about the purchase.
Some potential cons of a conditional sale for the buyer include the fact that it may not be as appealing to a vendor should they receive another similar but unconditional offer at the same time, which would likely be a faster transaction. Particular conditions or demands deemed more costly or challenging could also lead the vendor to accept a different offer.
Unconditional sale
An unconditional sale means that the buyer is willing to accept the property in its current state. In this scenario, the buyer should ideally have already secured approval for a home loan, as they may need to have a deposit ready for immediate finalisation of the sale.
It’s generally a good idea to consult with a conveyancing lawyer and a registered builder or building inspector before opting for an unconditional sale, as there may be unforeseen issues with the property that could cause you problems down the track.
Keep in mind that an unconditional sale provides less flexibility to the buyer, who is unable to back out of the contract.
What happens after you make an offer on a house?
What happens next will depend on what the vendor thinks of your offer:
- Acceptance: When the owner accepts your offer, with or without negotiation. If you haven’t already done so, you’ll be required to fill out a formal contract of sale and pay the deposit at this stage. When all parties have signed the contract, it’s legally binding. Then, it’s a matter of getting everything done that needs to happen before settlement can occur, such as obtaining home loan approval and conveyancing checks.
- Negotiation: When the owner generally likes your offer, but wants to make some changes. You may hear back from the real estate agent with feedback or a counter-offer. The owners may want more money, less conditions, or both. It’s then up to you to decide if you agree with their changes, want to negotiate further, or pull out of the process.
- Rejection: If the owner decides that they do not want to negotiate with you, they will reject your offer. You could then choose to pull out of the process, or change your offer and ask for it to be reconsidered.
Another scenario that might occur is called ‘gazumping’. This is when an agent tells you that your offer has been accepted but, before the papers have been signed, the vendor accepts a higher bid and then rejects your offer.
Cover image source: David Gyung/Shutterstock.com
This article was reviewed by our Finance Editor Jessica Pridmore before it was updated, as part of our fact-checking process.

The comparison rate for all home loans and loans secured against real property are based on secured credit of $150,000 and a term of 25 years.
^WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.
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The comparison rate for all home loans and loans secured against real property are based on secured credit of $150,000 and a term of 25 years.
^WARNING: This comparison rate is true only for the examples given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate.