How to Make an Offer on a Property
Most people realise that to get good at something, you need to practice. Sometimes, you need to practice a lot. In the workplace, we didn’t just turn up on day one and become experts overnight. Yet when it comes to learning how to make an offer on a property, people think they can simply walk into a negotiation and nail the best possible price every time, even with no experience.
The Three Massive Problems
There are three big issues with this thinking:
- You’re about to walk into a negotiation for possibly the biggest purchase of your life.
- The person you’re negotiating against does this for a living, and they’re likely very good at it.
- You’ve likely never negotiated anything near this price before.
The Bali Market Lesson
Have you ever been to Bali and tried to haggle for something?
Most people think they’ve negotiated well because they walked away with a bargain.
The truth is, you’ve just paid exactly the maximum you were willing to pay. You’ve likely negotiated against someone who negotiates hundreds of time a day and over time have become very good at it.
To you, $1 on a purchase might not seem like much, but to a Bali local, $1 extra per sale for 100 sales per day adds up to $100, which you can guarantee is a huge deal to local families.
Meanwhile, they make you feel good about it. You smile, and you tell yourself you got a deal. But if you ask around, you’ll probably find you overpaid. However in most cases, you won’t even care because the process was fun.
But what does learning how to make an offer on a property have to do with cheap handbags in Bali?
The Property Negotiation Parallel
If that can happen in a Bali market, imagine what can happen when you’re negotiating for a property worth hundreds of thousands of dollars.
Some people overpay by a few thousand, while others by hundreds of thousands. All because they didn’t know the true market value or how to negotiate like a professional.
The scary part is that most people never realise it, or if they do, they’ll never admit that they were outplayed by a smug agent driving a BMW (even though the car was probably a big clue they don’t make a living by selling property cheap).
Some people don’t even understand how to buy your first investment property or family home and they think they can dive right in.
How to Avoid Overpaying When Learning How to Make an Offer on a Property
Negotiation doesn’t have to be adversarial. The real art is finding a win-win outcome where both parties walk away satisfied. Here’s how to make an offer on a property that gives you confidence and control.
After speaking with some of the best negotiators in the business, there are specific steps that absolutely every one of them agree on.
Before You Begin Your Property Search: Get Your Property Finance Sorted First
Before you understand how to make an offer on a property, make sure you understand what is pre-approval and that your finance is ready.
An expert lending adviser can ensure:
- Your pre-approval is accurate and fully assessed.
- Your finance is structured for your goals.
- You’re ready to move fast when the right property comes along.
When you’re confident in your finance, you negotiate with power. It completely removes the pressure because you know exactly what you have to spend.
Step 1: Get an Independent Market Valuation
Before you make an offer on a property, get an independent market valuation. Don’t rely on free valuation estimates online. They’re free for a reason.
An independent valuation might cost $600–$700, but it’s worth every dollar.
Why it matters:
- Listing prices can be out by 10–30%.
- You’ll learn a specific range the property is actually worth in today’s market.
- An independent valuation provides a data-backed price range from a real human expert.
Step 2: Get Building, Pest, and Strata Reports Done First
Most buyers wait until after they’ve made an offer to order reports. Not only can this be a big mistake, it can turn out to be extremely expensive.
If you discover hidden issues after your offer is accepted, it’s often too late to renegotiate. Instead, get your reports before making your offer.
The benefits:
- Justify your offer based on facts.
- Avoid emotional or inflated bids.
- Strengthen your negotiating position.
Step 3: Crafting Your Offer
Once you have an idea on the true value of the property, the next step in how to make an offer on a property is to package it professionally.
Before approaching the agent:
- Get the contract reviewed by your solicitor or conveyancer.
- They can find things in the contract that most people would never notice.
- Watch for easements, land acquisitions, or zoning issues.
- Get guidance on how these details affect your use of the property, the offer price and potential future sale.
- Consider using a 66W certificate (waiving the cooling-off period) if all your due diligence is done.
- This is a real sign that you are serious about the offer and the agents will communicate that to the vendor.
Why this matters:
- It shows you’re serious and ready to act.
- Your offer stands out against verbal or conditional offers.
- Agents and vendors prefer dealing with informed buyers.
Step 4: The Offer Amount
Once you’ve completed your valuation, inspections and spoken to your conveyancer, you’ll know the realistic low, medium, and high price points for the property, that factor in everything you need to know.
If you’ve built open communication with the real estate agent, don’t be afraid to ask what might help the vendor achieve their goals too. For instance, finding out whether they’d prefer a shorter or longer settlement could shape how you structure your offer. Sometimes small details like timing or conditions can make your offer more appealing, even if your price isn’t the highest.
How to position your offer:
- Base it within the independent valuation range (you don’t have to reveal your valuation to the real estate agent).
- Factor in your own market and property research (do you offer different settlement terms to suit the vendor).
- Read the temperature of the market (is it hot, slow, or balanced)?
If the seller’s expectations are too high, that’s fine. Walk away. Let the property sit, and revisit later when the vendor adjusts to reality.
Step 5: Set Clear Timeframes
A strong offer is built around urgency. Give the vendor around 24 hours to decide. This way, they are forced into a decision. Most vendors (and buyers for that matter) sit on their hands at the decision point because of human nature. Often, we make decisions only because we are forced to do so.
However the details matter:
- Submit your offer just before 5pm on a weekday (and not the day before a scheduled midweek open).
- Avoid Fridays (you don’t want your offer used as leverage during weekend opens).
- Short, specific timeframes signal you’re confident and disciplined.
- Stick to 24 hours or less for the vendor to decide.
- This restricts agents from having too much time to use your offer as leverage with other buyers.
- This forces other interested parties and the vendor into making a firm decision.
Step 6: Be Prepared to Walk Away
This is the hardest lesson in learning how to make an offer on a property.
If your fair, well-researched offer isn’t accepted, walk away. There will always be another property and your willingness to walk away gives you true negotiating power.
Agents will respect it. You’ll win more than you lose with that mindset.
Most people end up overpaying because they become attached and are not willing to walk away. In many of these cases, they don’t even know why they ended up overpaying for that specific property anyway.
Step 7: Renegotiation
Just because you make an offer, it doesn’t mean it has to be your first and final. In some cases, it might be (which you explain to the agent when making the offer itself), however, in most cases the agent will come back to renegotiate anyway.
If you’ve already said it’s your first and final offer, when the agent comes back:
- Restate your offer
- Confirm your reasoning why you made that offer
- Valuations, inspections etc
- Reiterate your time frame
- Don’t renegotiate your time frame either. Stick firm.
However, if you do have room to negotiate and want to adjust your offer:
- Stay within your valuation and report-backed range.
- Move fast and set new (shorter) deadlines.
- Sometimes, agents might try to renegotiate just to make your offer stand for longer (which gives them more time to negotiate with others using your offer as leverage). Stick to time frames no matter what part of the negotiation you are at.
Why This Method Works
This method works because it’s structured, logical, and professional. It forces people to make decisions, rather than kicking the can down the road. For your part, it works because you know you’ll never overpay for a property.
The steps to remember are:
- Do your due diligence first.
- Back your offer with data, not emotion.
- Set firm limits and stuck to them.
Even if your offer isn’t accepted and negotiation breaks down, you’re establishing a reputation as an informed buyer. The agent will respect this and often give you the chance to view their properties before they even hit the open market in the future.
Learning how to make an offer on a property is about preparation, patience, and professionalism. If you follow these steps, you’ll not only make a great offer, you’ll make the right offer.
Ready to Get Started?
Your first port of call is to chat with one of our lending advisers.
