How to make an offer on a house in Australia
Before you get serious about buying, it's important to understand the first step of your home ownership journey - putting in an offer on a house.
- An offer on a house is not legally binding until both parties sign the contract and the deposit is paid.
- Having your finances organised and, ideally, a home loan pre-approval can make your offer more competitive.
- Market conditions, buyer demand and how much the property suits your needs all influence how much you should offer.
- Conditional offers can protect buyers, while unconditional offers may appeal to sellers but carry greater risk.
Making an offer on a house can feel daunting, especially if it's your first time buying. Between negotiating with agents, sorting out finance and understanding contracts, it's easy to feel overwhelmed.
The good news? Once you know how the process works, making an offer is far less intimidating. Here's a step-by-step guide to how to make an offer on a house in Australia, what to include, and what happens next.
How to make an offer on a house in Australia
1. Get your finances sorted
Before you make an offer, it's important to know exactly how much you can afford. To get started, you can use online calculators to find out how much you can borrow.
Most buyers start by getting a home loan pre-approval from a lender. Pre-approval gives you a clearer borrowing limit and shows the seller you're serious and conditionally ready with your finances.
However, it's not a guarantee of final approval. Your loan still needs to be formally assessed once you've signed a contract.
On the other hand, if you're already a homeowner and looking to sell, or you're looking to use equity to put down your deposit, make sure you're ready to make it all happen by having your finances organised.
In addition to the deposit, you should also budget for:
- Stamp duty
- Conveyancing or legal fees
- Building and pest inspections
- Any other upfront costs
When choosing a home loan, be sure to compare your options. Here are some of the lowest rates available on the market for owner-occupiers.
| Lender | Home Loan | Interest Rate | Comparison Rate* | Monthly Repayment | Repayment type | Rate Type | Offset | Redraw | Ongoing Fees | Upfront Fees | Max LVR | Lump Sum Repayment | Extra Repayments | Split Loan Option | Tags | Features | Link | Compare | Promoted Product | Disclosure |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
5.94% p.a. | 5.98% p.a. | $2,978 | Principal & Interest | Variable | $0 | $530 | 90% |
| Promoted | Disclosure | ||||||||||
5.89% p.a. | 5.80% p.a. | $2,962 | Principal & Interest | Variable | $0 | $0 | 80% |
| Promoted | Disclosure | ||||||||||
5.99% p.a. | 6.02% p.a. | $2,995 | Principal & Interest | Fixed | $0 | $0 | 60% |
| Promoted | Disclosure | ||||||||||
5.93% p.a. | 5.93% p.a. | $2,975 | Principal & Interest | Variable | $0 | $395 | 70% | Disclosure |
2. Attend inspections and open homes
Don't just rely on photos. If possible, see the property in person to properly assess its condition, get a feel for the layout and location, and decide whether you could realistically see yourself living there.
Inspections can also give you a sense of how much interest there is in the property. If you're attending an open home alongside 50 or more other buyers, there's a good chance several of them will be preparing to make an offer. On the other hand, if turnout is low, the seller may face less competition.
Read our House Inspection Checklist to give you an idea of what you should inspect on a property.
3. Be ready to move - and move fast
Being ready to move quickly matters in two ways: you need to be ready to act fast with your offer, and you need to be ready to move into the property once the purchase goes ahead.
If you're currently renting and your lease still has months to run…
Be ready to face the legal gymnastics of getting out of the lease early. You'll likely need to break the lease, which can be expensive, so be ready to bite the bullet.
If you're planning to sell your existing property…
You'll need to make sure you account for this in your offer/contract with a 'subject to settlement' clause, or have the funds available to go through with the purchase if you can't sell in time (e.g. be prepared to apply for a bridging loan).
Here's a handy guide on buying and selling a home at the same time.
What should be included in an offer?
In Australia, offers are usually made through the real estate agent, either verbally or in writing.
While a verbal offer may start the conversation, written offers are taken more seriously and are generally required before a seller will accept.
Your offer doesn't need to be complicated, but it should clearly outline the key details.
A property offer typically includes:
- The purchase price
- Deposit amount (usually 5-10%)
- Settlement period (commonly 30-60 days)
- Any conditions, such as:
- Subject to finance
- Subject to building and pest inspection
- Subject to sale of another property
- Preferred settlement date
- You may also include an expiry time for the offer, which can encourage a quicker decision from the seller.
With this information, the agent goes to the owner with your offer to see whether they're interested in taking you up on it. If they're interested, you'd proceed with getting a contract signed and be well on your way to owning the home.
If they're not quite sold, you might need to negotiate your offer and your terms to find a way forward, or bow out of the race.
How much should you offer on a house?
Deciding how much to offer on a house is often the hardest part of the buying process. The price you're willing to pay will usually be one of the first - and most important - things a seller considers.
The challenge is working out how to make a competitive offer without overpaying, particularly in high-demand markets where homes can sell for hundreds of thousands of dollars above the asking price.
Should your first offer be your absolute maximum, or is it better to leave room to negotiate?
According to Cate Bakos, President of the Real Estate Buyers Agents Association (REBAA), there's no one-size-fits-all answer.
"This is so subjective and depends on the situation," Ms Bakos told Savings.com.au.
"If an agent is running a 'best and highest' campaign, a buyer will definitely need to be prepared to offer their maximum price. Not only does it depend on how the agent is running the negotiation, but also on how strong the market is, how popular the property is, and whether other offers have conditions. Buyers need to ask a lot of qualifying questions before making an offer."
Back your offer with research
Lloyd Edge, Director of Aus Property Professionals, said a fair but competitive offer should be backed by solid research.
"You need to offer a price you genuinely believe the property is worth," Mr Edge told Savings.com.au.
"Where a price guide is supplied, an offer below the lower end of the range is unlikely to be accepted. It can be reasonable to offer at the bottom of the range, or slightly discount your offer if comparable properties have recently sold with features the subject property doesn't have - such as a renovated kitchen."
Looking at recent comparable sales can help justify your offer and give you confidence during negotiations.
How close should your first offer be to your limit?
Scott Aggett, property negotiator at Hello Haus, said he often advises clients to make their first offer close to, but not at, their walk-away price.
"I typically make the first offer at around 95 to 97% of my client's maximum," Mr Aggett told Savings.com.au.
"I expect one of two outcomes: either the seller accepts, or it's close enough to start negotiations and receive a counteroffer. Many sellers want to feel like some negotiation has taken place, which is why it can be smart to go close to your best without offering it outright."
A practical tip for submitting your first offer
Mr Aggett also shared a practical tip for submitting an initial offer: starting with a phone call or text message to the agent.
"If the offer is too low, the agent will usually dismiss it straight away," he said.
"But if it's strong enough, the agent will ask for the offer to be put in writing, either by email or on a contract. This early step can save buyers thousands of dollars in legal fees, inspections and wasted time if the offer was never going to be competitive in the first place."
How to avoid paying too much
On the front of avoiding paying too much for a property, Ms Bakos said it's important to do some research and ask some questions.
"Comparable sales analysis takes around an hour or two. All a buyer needs to do is check the sold tab on a search engine and apply a bit of focus to this really important task," she said.
Diaswati Mardiasmo, Chief Economist at PRD, stressed that buyers need to be aware of the average vendor discount for a particular area and/or property type.
- The average vendor discount represents how close to the asking price properties are selling for. If the discount is 'tight', you should offer close to the initial asking price.
"For example, if the area or property type that you are interested in has had a tightening in the average vendor discount, then you need to offer close to the first list asking price," Dr Mardiasmo told Savings.com.au.
"If it has swung to a premium, then you need to offer higher. Even if you offer higher, knowing the average vendor discount will guide you."
Mr Edge also said you need to compare the property you're looking at to similar properties on the market - and properties that recently sold with similar attributes - to make an offer below your maximum price that you would pay that leaves room for negotiation (or wiggle room) if required.
Mr Aggett recommends playing a 'simple game' with yourself/your partner to decide what a property is worth to you.
"Ask yourself: What is your maximum walk-away price? Let's say $800,000. Would you buy it today if you could at $810,000? If it's a YES, try again. Would you buy it today if you could at $820,000?" he said.
"Keep pushing until you have a clear decision on where your interest stops on a home. Emotional buyers (often at auctions) don't push themselves hard enough to determine that number and are at a high risk of overspending."
What happens during price negotiations
During negotiations, sellers may accept your offer, reject it, or make a counteroffer.
Negotiations can go back and forth several times. Don't feel pressured to rush - and remember that price isn't the only factor. Flexible settlement terms or fewer conditions (more on that below) can also make an offer more appealing.
Should you make a conditional or an unconditional offer?
As a buyer, you have an option to make either a conditional or an unconditional offer.
A conditional offer gives buyers protection if something goes wrong. Common conditions include finance approval, satisfactory building and pest inspection, and legal review of the contract.
An unconditional offer removes these protections and usually only suits buyers who already have full loan approval and completed inspections.
Some sellers may prefer an unconditional offer over a conditional offer. Real estate consultant Chris Bellesini said he has clients who are prepared to accept $10,000 less if an offer is unconditional, as it takes away the risk for them.
Unconditional contracts are usually geared towards benefiting the seller, as it means the buyer can't back out of the contract. It comes with no conditions attached. Meaning that once the contract is signed, you (the buyer) are tied into the sale.
While unconditional offers can appeal to sellers, they carry more risk for buyers.
What happens after your offer is accepted?
Once your offer is accepted:
- Contracts are exchanged and signed
- The deposit is paid
- Your lender finalises loan approval
- Building and pest inspections are completed (if applicable)
- Settlement occurs - usually 30-60 days later
A conveyancer or solicitor will handle the legal side of the transaction and guide you through settlement.
- Savings.com.au's tip: Putting in an offer is all well and good, but signing the contract is what really seals the deal. But before you sign anything, it might be helpful to consult a solicitor to ask any questions about the contract, draw up any clauses you need included (if you go with a conditional contract), or discuss your options if you're signing an unconditional contract.
Be sure to read the contract thoroughly, but don't take too long. Ensure it all matches up with your offer, and then sign it swiftly. If you take too long, the owners might choose to accept another offer and sign a contract with those buyers.
Things to check on the contract might include:
- Your full legal name (including any middle names) is spelt correctly.
- The purchase price is the same as what you agreed upon.
- Any included/excluded chattels are listed.
- Finance/building and pest/settlement terms are as agreed.
- Any special conditions/clauses are included in the special conditions section.
- Electrical safety switches and smoke alarms have been installed.
- There are no neighbourhood disputes.
- You've been made aware of any title easements/encumbrances listed on the contract.
- If you plan on moving in, there are either no tenants or the contract is subject to vacant possession.
- If there's a pool, you've seen a copy of the pool safety certificate.
Is an offer legally binding?
An offer itself is not legally binding. In most cases, a property becomes legally binding only when the seller and buyer have both signed the contract, and the deposit has been paid.
This process can vary slightly by state, so it's important to get legal advice before signing anything.
Most Australian states and territories offer a cooling-off period after contracts are signed, allowing buyers to withdraw (usually for a small penalty).
Cooling-off periods generally include:
- NSW and QLD - 5 business days
- VIC - 3 business days (private sales)
- SA - 2 business days
- WA, TAS and NT - No standard cooling-off period unless negotiated
- Take note: Cooling-off periods usually don't apply to auction purchases.
Tips to strengthen your offer
Sometimes, you simply won't be able to offer as much as your fellow buyers - and that's okay! All you can do is make your offer as attractive as it can be, and if you can't compete, it's best to just bow out.
To improve your chances of success:
- Have finance pre-approval ready
- Make your offer clear and well-structured
- Be flexible on settlement dates where possible
- Limit conditions (without removing essential protections)
- Act quickly on properties you're serious about
"Be clear about your offer, and importantly, maintain a healthy respect for the vendor in all of your dealings with the agent," Ms Bakos said.
Mr Aggett strongly recommends "leaning on industry experts".
"It's not a 'learn on the go' situation or a process to learn from your mistakes. Get it right the first time and avoid buyers' remorse."
Savings.com.au's two cents
Making an offer on a house is one of the biggest steps in the home-buying process. While it can feel nerve-racking, understanding how offers work - and what protections are in place - can help you approach it with confidence.
If you're unsure, speaking to a mortgage broker, conveyancer or solicitor before making an offer can give you peace of mind and help ensure you're making the right move.