Making a knockout bid
Most people like to make a low bid, see what counter-offer the vendor makes, and then negotiate until a deal is struck.
However, some purchasers just want to secure a property without "pussy-footing around". They want to make a "Knock-Out" bid that will surprise and delight the vendor, and bring about a quick and decisive sale.
In this section we've set out the main features of the "Knock-Out" bid.
Best price up-front
Obviously, the price is crucial. Every vendor looks at the bottom line, and first impressions in terms of price are very important.
Having said this, however, we do acknowledge that the highest price does not always constitute the best price. Consider this: You've worked out the highest possible price you can offer, and
you think that someone else may be able to better it. By submitting your offer as a "knock-out" offer (see the other
criteria below) you may be able to make it more attractive than other offers.
But, all things being equal, the price is what will make the difference.
Committed purchaser
A committed purchaser is one who clearly wants to "get the job done". The committed purchaser has done all
of the ground-work:
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Legal advice - the purchaser has obtained legal advice, and knows what she is getting herself into. By
getting legal advice before signing the contract the purchaser eliminates the "cooling off"
period. This means that when the contract is signed the offer the deal is final. |
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Signing on the dotted line - a contract for the sale of real
estate must be in writing. We prepare the contract and submit it to the purchaser as the vendor's offer to sell. The committed purchaser signs off on the deal without delay. |
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Finance approved - an offer is less attractive if the vendor has to wait to see if the purchaser's loan will be approved. Cash offers are solid. Finance should be approved
before the sale, so that the final contract is not subject to finance. |
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No added conditions - the vendor doesn't want to wait for a building inspector to give the "OK"; or for a pest inspector to give the "all clear". Such delays, together
with the risk that the sale could be cancelled later, can make an offer quite unattractive. Any necessary inspections and checks should be conducted before the offer is made. |
No nonsense approach
"Knock-Out" offers are final. They're not accompanied by
"...and can you let me know if anyone else puts in a better offer?"
or
"...let me know if I'm not in the ball-park and I'll see what I can do."
The "Knock-Out" offer speaks for itself. The purchaser is telling the vendor, "I seriously want this property and I'm prepared to buy it right here and now."
Walk-away bid
The "Knock-Out" offer either wins or it loses. If it's accepted by the vendor, then both parties are winners.
If the offer is rejected, then both parties can walk away without looking back.
Submitting the knock-out bid
The knock-out bid is submitted by delivering the completed "
Bid to Buy" form to our office. A purchaser can do this by:
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Delivering it to our office in person; |
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Sending it to us by post, email or fax; or |
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Having their lawyer send it to us by post, email or fax. |
Signing the contract
A knock-out bid gets an immediate response from the vendor, and a contract will be prepared immediately. The vendor will sign the contract, and we will deliver it to the purchaser or the purchaser's legal representative URGENTLY.
When the purchaser signs the contract to accept the vendor's formal offer, and sends a copy of the signed contract back to us (by fax, email or in person), the deal is done - the property has been sold.
Paying the deposit
We do not require payment of the deposit at the time the bid is submitted. The obligation to pay a deposit does not arise until the contract has been signed.
When a purchaser's lawyer assists in the completion of the purchaser's bid, he/she will advise regarding the amount of the deposit to be offered (usually 10% of the purchase price), and the time required for the obtaining and payment of deposit funds.
Conclusion
Making a "Knock-Out"
bid isn't for everyone.
But for those who are prepared to carry the risk, there is every chance that a "Knock-Out"
bid will secure the property instantly, for a price
the purchaser is willing to pay, while other intending purchasers are still trying to negotiate.
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© 2009 Lawyers Real estate
