Making an Offer on a Property in NSW: What Buyers Should Expect

What Happens After You Make an Offer?

When you submit an offer through the selling agent, the agent communicates with the vendor and seeks instructions about how the vendor wants to respond. The vendor may accept the offer, reject it, make a counteroffer, request different terms or decide not to proceed at that time.

Under the NSW Property and Stock Agents Regulation 2022, an agent acting for a vendor must generally inform the vendor of purchase offers as soon as practicable after receiving them and before contracts are exchanged. An exception may apply where the vendor has given written instructions that particular offers are not to be submitted. If an offer will not be communicated, the person making the offer must be informed.

This obligation does not force a vendor to accept, negotiate or explain their decision. It governs how the agent handles offers while acting for the vendor. Auction bids are dealt with under separate auction rules.

Read the current Property and Stock Agents Regulation 2022.

Prepare Before the Agent Asks for Your Best Offer

The strongest time to prepare is before negotiations begin. Once an agent announces a deadline or says another buyer is interested, it becomes harder to assess the property calmly. A pre-offer plan gives you a reference point when pressure increases.

Your preparation should cover more than borrowing capacity. It should include your available deposit, acquisition costs, likely repairs, contract concerns, preferred settlement period and the price at which the property no longer represents acceptable value.

Should Your Property Offer Be Made in Writing?

Buyers sometimes begin with a verbal discussion to test the vendor’s expectations. Even when negotiations start verbally, putting the proposed price and conditions in writing can reduce confusion and create a clearer record of what was offered.

A written offer should identify the property, proposed purchase price and important conditions. Depending on the transaction, these may relate to finance, building and pest inspections, strata review, settlement timing, inclusions or review of the contract by the buyer’s conveyancer or solicitor.

The wording should be clear enough that the vendor understands what is being proposed. Avoid relying on phrases such as “subject to the usual conditions” unless those conditions have been clearly identified and professionally reviewed.

Before signing an expression of interest, contract, waiver or other document, ask your conveyancer or solicitor what it means and whether it reflects the terms you intended to propose.

A Simple Property Offer Checklist

The exact process varies between properties, but this checklist can help buyers organise the key decisions before submitting an offer.

How to Work Out What the Property Is Worth to You

The advertised guide is part of the selling campaign, not an independent valuation. Your offer should be based on evidence and your own buying position.

Start with recent comparable sales that are genuinely similar. Look at location, land size, building size, condition, bedrooms, parking, orientation, renovation quality and any features that materially change buyer demand.

A sale on the same street is not automatically comparable if it has superior land, a newer renovation, better views or a very different floor plan. Likewise, an older sale may need to be considered in the context of market conditions at the time.

Also account for the costs that arise after purchase. Immediate repairs, renovations, strata works, insurance considerations and ownership costs can affect how much you should be willing to pay.

Opening Offer, Target Price and Walk-Away Price

Rather than choosing one number in isolation, it can help to prepare three reference points before speaking with the agent.

An extremely low opening offer is not automatically a strong strategy. If it is disconnected from the evidence, it may not encourage a useful response from the vendor. Conversely, beginning too close to your maximum can leave little room to negotiate.

The right starting point depends on the sales evidence, vendor expectations, buyer competition, time on market and whether the vendor has invited a best-and-final process.

Price Is Not the Only Part of an Offer

Vendors often compare the overall certainty and convenience of competing offers. A lower offer may sometimes be attractive when it has suitable settlement timing and fewer uncertainties, while a higher offer may carry conditions the vendor does not want to accept.

Possible offer components include the deposit, settlement period, finance condition, inspection condition, inclusions, vacant possession, contract amendments and the time allowed for acceptance.

That does not mean buyers should remove important protections simply to make an offer look stronger. The goal is not to create the most attractive offer at any cost. It is to propose terms that are competitive while remaining acceptable for your circumstances.

Conditions, Finance and Due Diligence

The highest price is not always the only factor a vendor considers. Settlement timing, finance confidence, deposit arrangements and the number or type of conditions may also affect how an offer is viewed.

Before reducing or waiving a condition, understand what protection it provides and what could happen without it. Finance pre-approval may improve preparation, but it is not necessarily an unconditional promise that a lender will approve the specific property or final loan.

Building, pest, strata and contract investigations can identify issues that alter the buyer’s assessment of value. The appropriate checks depend on the property type and transaction.

Due Diligence for Houses, Units and Investment Properties

Different property types require different investigations. A freestanding house may raise questions about the building, drainage, boundaries, easements, approvals and pest activity. A unit or townhouse may require closer examination of the strata records, capital works fund, insurance, by-laws, defects and proposed special levies.

For an investment property, buyers may also consider rental evidence, vacancy risk, likely management costs, maintenance, insurance, local supply and the property’s role within the wider investment strategy.

Specialist inspectors, legal advisers, finance professionals and other qualified experts may be needed depending on the property and the issues identified.

Questions to Ask the Selling Agent

The agent works for the vendor, but asking clear questions can still help you understand the process and prepare an appropriate offer.

The agent may not answer every question or disclose confidential information about another buyer. Treat the answers as one source of information rather than a replacement for independent investigation.

What Does “Best and Final Offer” Mean?

A best-and-final process usually means the agent is asking interested buyers to submit the strongest price and terms they are prepared to offer by a nominated time. Buyers may not receive another opportunity to increase their offer.

This can create pressure because there is often limited information about competing buyers. The safest response is to return to your own evidence and maximum price rather than trying to guess an unknown competing bid.

Your best offer does not have to equal your maximum borrowing capacity. It should be the strongest offer you are comfortable making after considering value, risk, conditions and ownership costs.

How to Respond to Agent Pressure

Agents may tell buyers that another offer exists, the vendor expects a quick decision or the property could be sold shortly. The pressure may be genuine, but it should not replace your own assessment.

Ask whether the vendor has set a deadline, whether the agent is requesting a best-and-final offer and whether the vendor has preferences about settlement or other terms. The agent may not disclose every detail, but the answers can help you understand the process.

Then return to your predetermined limit. Increasing the offer may be reasonable when new evidence supports the decision. Increasing it only because the negotiation feels uncomfortable can lead to overpaying or accepting terms that were not properly reviewed.

An Accepted Offer Is Not Always the End of the Process

Buyers can hear that an offer has been “accepted” and assume the property is secured. In practice, verbal acceptance and contract exchange are not necessarily the same event. There may still be contract review, signatures, deposit arrangements and other steps before the transaction becomes legally binding.

The agent may continue acting under the vendor’s instructions while contracts are being prepared or reviewed. Buyers should avoid making assumptions about whether another offer can still be considered or whether they can withdraw without consequences.

Ask the selling agent what stage the transaction has reached, then confirm the legal position with your conveyancer or solicitor. This is particularly important when the agent requests a holding deposit, exchange deposit, signed contract, cooling-off waiver or accelerated exchange.

Contract Exchange, Deposits and Cooling-Off Rights

Contract exchange is a critical point in the NSW buying process. The NSW Government states that residential property buyers generally receive a five-business-day cooling-off period beginning at exchange, although exceptions apply and the period may be waived or changed in certain circumstances.

Different rules apply to properties purchased at auction and contracts entered into on the same day as an unsuccessful auction. Buyers should not assume a cooling-off period will protect them in every transaction.

A cooling-off period is also not a substitute for proper preparation. Withdrawing during this period may have financial consequences, and important deadlines can arrive quickly. Obtain legal advice before exchange and before signing any certificate or document that waives cooling-off rights.

Private Treaty Offers and Auction Purchases Are Different

With a private treaty sale, buyers may have time to submit an offer, negotiate terms and seek contract amendments before exchange. The process can still move quickly, but there is often more opportunity to discuss conditions and settlement preferences.

At auction, the process is different. Bids are made publicly, the auction terms apply and the successful bidder is generally expected to sign the contract and pay the required deposit immediately. Buyers should complete their finance, contract review and property due diligence before bidding.

If a property is scheduled for auction but the vendor is considering pre-auction offers, ask the agent to explain the process. The vendor may accept an offer before auction, continue to auction or request stronger terms.

Common Mistakes Buyers Make When Submitting an Offer

A Practical Offer Process From Inspection to Exchange

Getting Buyer-Side Support

Making an offer requires several decisions at once: assessing value, communicating terms, interpreting the agent’s response and staying disciplined when competition increases. Buyers who need help with these steps may benefit from independent buyer-side support.

A home buyers agent can assist with property assessment, comparable-sales research, offer preparation and negotiation for an owner-occupier purchase.

Property investors looking for acquisition support can explore the investment property buyers agent service. Buyers who want to strengthen their own research and decision-making process can also explore property mentoring.

A buyer’s agent does not replace a conveyancer, solicitor, lender, building inspector or other appropriately qualified professional. Each adviser has a different role in helping the buyer assess the transaction.