Once you’ve talked with a mortgage broker and been approved for a home loan, you’re officially able to snap up a property. You’ll do so in one of two ways: Bidding for it at an auction or buying it through private treaty.
There’s a good chance you’re already familiar with the basics of an auction. You may not be as knowledgeable about the private treaty process.
What is private treaty?
Buying a home through private treaty just means buying it through a private sale. Rather than competing with a load of other thirsty buyers by shouting out an ever higher price, you’re looking the seller in the eye and talking about the asking price they have set.
Is the asking price negotiable?
The asking price is simply the value the seller would prefer for their property. It isn’t necessarily a minimum price, and can be negotiated down. This is one reason some buyers prefer purchasing through private treaty – not only is it a battle of wits akin to a game of chess, but you can potentially get a lower price for the house.
Will I always be dealing with the seller?
You won’t necessarily be talking directly to the seller. Most vendors will use a real estate agent to sell their house. If so, you’ll be giving your price offer to them. The agent will then take the offer back to the seller, discuss it and present you, the buyer, with a counter offer. This back-and-forth might go on for a number of rounds before a sale price is settled on.
Is there a cooling-off period?
Unlike auctions, buying through private treaty has a cooling-off period, the length of which depends on the state you’re in. In New South Wales, the cooling off period is a paltry single business day. In Queensland, it’s a generous five days in which you can change your mind about the purchase.