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Making An Offer to Purchase a Property

Making an Offer

Making an offer to purchase a property in South Australia is straightforward. Download a Letter of Offer Form here, print it out, and complete the required details. You can return the completed form to the agent using one of the following methods:

  • Take a photo with your smartphone and text it directly to the agent.
  • Email it either directly to the agent or to [email protected].

Once we receive your Notice to Offer, we will contact you as soon as possible.

The Office of Consumer & Business Services also recommends that you read Form R3 - Buyer Information Notice before making an offer. You can access this form here.


Contracts, Cooling Off Periods & More

Buying at Auction

Before bidding at an auction, understand the process and verify all property details. If you are the highest bidder and your bid is accepted, you must purchase the property.

Here are some key points to consider:

  • Decide on a definite upper limit you are prepared to pay.
  • Conduct inspections.
  • Have legal documents checked by your solicitor/conveyancer.
  • Organise a bank cheque for the deposit.
  • Have finance pre-approved.

Conditions of sale by auction might differ between states and territories. Your agent can explain the specific conditions applicable in South Australia.

Bidding at Auction

In South Australia, prospective purchasers wanting to bid at an auction for residential and rural property must register by providing their details to the selling agent before being permitted to bid.

Bidders are issued a bidder’s number to display when making a bid.

The vendor or the auctioneer on the vendor’s behalf may place bids during the auction, known as a vendor bid, these will typically be announced at the time they are made.

If the property fails to reach the reserve price, it is passed in. The highest bidder is usually given the first opportunity to negotiate further with the vendor through the selling agent.

If the highest bidder does not purchase at the reserve price, the property will be put back on the market for sale by private treaty.

Bidding on Behalf of a Purchaser

If you want someone else to bid on your behalf, they must provide the auctioneer with written authority from you before the auction starts. This is known as a Proxy Bidder Form and must be accompanied by a Letter of Authority. The letter must include your name, address, and proof of identity, such as your driver’s license or passport.

Telephone Bidding

Bidding by telephone is allowed if certain procedures are followed. A written authority must be given to the auctioneer before the auction, acknowledging that the person on whose behalf bids are made has received a copy of the applicable conditions and is satisfied with those conditions. A copy of the contract must be provided to all successful telephone bidders after the auctioneer has signed it on their behalf.

Dummy Bidding

Making ‘dummy’ bids at an auction is illegal. If you make ‘dummy’ bids for the seller, you may be prosecuted and incur a substantial fine.

Bidding Tips

  • Attend similar auctions in the week leading up to your auction to understand the system.
  • Get a feel for the bidding process before you start.
  • Establish a limit of how much you’re willing to spend on the property.
  • Know what’s happening around you. Don’t hide, or the auctioneer might miss your bid.
  • Bid with confidence to show you’re serious about buying.
  • Bid in the increments set by the auctioneer to avoid raising the price unnecessarily.
  • When the bidding slows or stops at a figure acceptable to the vendor, the auctioneer may announce that the property is to be sold. The auctioneer will repeat the price several times before the hammer comes down and the property is sold.

Reserve Price

Before the auction, the seller will nominate a reserve price, which is the lowest amount they are willing to accept. The reserve price is not revealed to buyers.

Passed In

If a property fails to reach the reserve price, it can be ‘passed in’ or withdrawn from auction. The agent will then negotiate with the highest bidder on behalf of the vendor, which may result in a sale.

Purchase at Auction

If you are a successful bidder, you must sign the sale contract and pay the deposit immediately (usually 10%).

There is no cooling-off period if you buy at auction, so you must arrange finance before the auction.

Conditions of sale by auction may differ from state to state. Your agent can explain the sale by auction conditions in South Australia.


Other Essential Info

Contract of Sale

A residential property cannot be sold until a contract has been drawn up. A contract of sale sets out the terms and conditions of the sale. A buyer can examine the contract at any time during the buying process, even before making an offer.

Making an Offer

Deciding how much to offer can be difficult. You might wish to make your best offer up front or start with a lower offer and be prepared to negotiate up. However, other purchasers making higher offers might secure the property without allowing you to increase yours. Offers should be made around the current market price. Offers well below market value will not be taken seriously, and the vendor might refuse to deal with you further. Ensure your finance has been approved, as a vendor is only interested in serious offers that can be fulfilled. Put your offer in writing and give it to the real estate agent. The agent is obliged to forward formal offers to the vendor.

Completing a Contract 

If your offer is accepted then the contract will be prepared. The contract will include information about the deposit you will need to pay. The contract will also list the fixtures and fittings that are included in the sale and any Conditions of Sale that must be met before the property can settle.

Once you and the vendor have signed a contract, and you have received the vendor’s statement (Form 1), then you have a cooling-off period of two clear business days during which you can pull out of the contract, no matter what the reason.

The Deposit

When contracts are signed by both parties, you will have to pay a deposit, usually anywhere from 5 to10% of the purchase price. This is paid to the seller’s real estate agent or conveyancer, who will place the money into a trust account until settlement when the balance is paid.

Cooling Off Period

In South Australia, there is a cooling-off period of two business days after the exchange of contracts, during which you can withdraw from the sale. During the cooling-off period, it is common and permitted for buyers to organise inspections, such as pest or building inspections. There may be a cost incurred for buyers who withdraw from the sale within the cooling-off period. It is possible to waive, reduce, or extend the cooling-off period with the seller's consent. There is no cooling-off period for sellers or buyers who have purchased at auction. Your agent will explain the process and legal requirements applicable in South Australia.

Insurance

In South Australia, the property is at the risk of the purchaser from the date of signing the contract. If this is the case, you should immediately arrange insurance. Your agent can explain this requirement to you.

State Tax/Stamp Duty

Stamp Duty is a government tax that must be paid on settlement. It is calculated as a percentage of the sale price or the market value. Stamp duty exemptions may apply for first homeowners or concession card holders. This may vary between states and territories. Your agent can explain the Stamp Duty payable in South Australia.

Settlement

The sale is finalised when the balance of the purchase price and other adjustments have been paid and the title and transfer documents have been exchanged. Settlement usually occurs two to six weeks after contracts have been signed by both parties. At settlement, you become the legal owner and either your conveyancer or the agent will advise you once settlement is completed and then you can make arrangements to collect the keys to your new home.

Making An Offer to Purchase a Property.pdf