Receiving and making counter offers

At some stage of the sale process, you will hopefully receive one or more offers for your property. You have a number of options to consider.

Summary of important things to know
  • The offer process will vary depending on the method of sale you have chosen.

  • An offer will be presented in writing on a sale and purchase agreement.

  • Make sure you read and understand the agreement before signing it. We recommend you ask your lawyer or conveyancer to check the agreement before you sign it.

  • You don’t need to accept the first or any offer made on your property.

  • The buyer may add conditions to their offer, and you can add conditions too. You can negotiate the conditions.

  • Unless you are selling privately, all negotiation with the buyer is through your agent.

  • If your agent or someone they know makes an offer on your property, this is a conflict of interest. To proceed, your agent must get your written consent and provide you with an independent valuation.

     

IMAGE: Tender

Receiving offers

The offer process will depend on the method of sale you have chosen. 

These are your options when you receive an offer from a buyer:

  • Accept the offer. You will sign a sale and purchase agreement. We recommend you get legal advice before signing a sale and purchase agreement because it is a legally binding contract.
  • Reject the offer. The buyer may come back with a further offer. You do not have to tell the buyer why their offer was rejected, but it can be helpful for them to know.
  • Start negotiations by making a counter offer. The agent will make the changes to the sale and purchase agreement and present it back to the buyer.
Conditions

With the exception of auctions, you and the buyer will negotiate on the price and conditions of the sale and purchase agreement. It’s common for a buyer to make a conditional offer. This means the offer is subject to one or more conditions. For example, before buying, the buyer may need to sell their property, gather evidence about the quality of your property (for example, a building inspection report) or secure finance so they can buy your property.

You may also add conditions. For example, you may want a settlement date that coincides with the settlement date for a home you’ve bought, or you may want to keep a particular chattel. Ask your agent about this. The agent should give you the opportunity to check any conditions you would like to add with your lawyer or conveyancer.

Negotiating

Negotiation continues until you and the buyer reach an agreement on the price and conditions, you reject the buyer’s offer or the buyer withdraws their offer.

You and the buyer may change the price and conditions written on the sale and purchase agreement as you negotiate. The agent will ask you and the buyer to initial any changes to show you both agree with them. Read any changes, and make sure you understand and agree with them before initialling. Your lawyer or conveyancer can advise you during this process and should check the agreement before you sign it.

Learn more about the sale and purchase agreement here.

Agree with the buyer about price and conditions

You and the buyer are in a legally binding contract when you’ve agreed on price and conditions and have both signed the sale and purchase agreement. If you have signed a conditional agreement, you are likely to continue to deal with your agent as they may need to provide access to the property to help the buyer fulfil their conditions.

When an agreement goes unconditional, most of the communication happens between you and your lawyer or conveyancer and the buyer’s lawyer or conveyancer. You can still contact your agent during this time, but your lawyer or conveyancer will need to be involved with questions about the agreement.

Each method of sale has a different process

Selling at an advertised price

Buyers will make a signed written offer via your agent on the sale and purchase agreement. Your agent is likely to tell any other interested buyers that someone has made an offer, and if more than one person makes an offer, the agent will run a multi-offer process. You need to consider each offer to decide whether you want to accept the offer, make a counter-offer, or reject the offer. It’s entirely your decision. If you want to make a counter-offer, ask your agent to negotiate the price or conditions with the buyer.

Learn more about selling by negotiation or deadline sale here.

Learn more about the multi-offer process here.

Deadline sale

Your agent will present each offer on a sale and purchase agreement. You can wait until the end date and consider all the offers together or accept an offer at any point while your property is listed for sale with the agency. 

If more than one buyer is looking to submit an offer, your agent is likely to tell any other interested buyers that someone has made an offer, and if more than one person makes an offer, the agent will run a multi-offer process.

You need to consider each offer to decide whether you want to accept the offer, make a counter-offer, or reject the offer. It’s entirely your decision. If you want to make a counter-offer, ask your agent to negotiate the price or conditions with the buyer.

Learn more about selling by negotiation or deadline sale here.

Learn more about the multi-offer process here.

Tender

Buyers can make an offer at any time before the tender deadline, and you can accept an offer at any time. You don’t have to wait for the end date. Your agent should keep you informed about any interest and present all written offers to you. 

Your agent will present offers on a tender document, which is a type of sale and purchase agreement. If a buyer submits a written offer before the end date of the tender, it may include an expiry date and time. You can decide whether to accept or decline the offer or enter further negotiation with the buyer.

If the tender runs to the advertised deadline, you generally have up to 5 working days to decide which offer, if any, you will accept. If you accept an offer, you’ll sign the tender document.

Regardless of whether you consider an early offer or wait until the end date of the tender, you can negotiate with the buyer to change the price and conditions in the tender. If this happens, the agent will ask you and the buyer to initial any changes to show you both agree with them. Read any changes first, and make sure you understand and agree before initialling. Your lawyer or conveyancer can advise you during this process and should check the final agreement before you sign it.

You don’t need to accept the highest offer. You can accept any or none of the offers, and you can negotiate, through your agent, with anyone who submits an offer.

Read more about the sale and purchase agreement here.

If there is more than one offer, the sale may turn into a multi-offer process. Learn more about the multi-offer process here.

Auction

There is a version of the sale and purchase agreement that is specifically for auctions. Interested buyers are given a copy of this when they tell the agent they are interested in buying your property. It will include the settlement date you have chosen and a list of the chattels that will be sold with the property.

You can receive and accept an offer before the auction date if you have advertised your property with the condition 'unless sold prior'.

  • The offer will usually be presented on the auction version of the sale and purchase agreement and will be unconditional. Usually when you accept a pre-auction offer it does not become a binding agreement.
  • The auction will be held sooner than the advertised date, and the pre-auction offer becomes the first bid at the auction. Occasionally, if the auction process allows for it, you can accept the pre-auction offer or negotiate its terms. It will become a binding sale and purchase agreement, and the agent will cancel the auction.
  • Talk to your agent about the auction process they follow.

If your property goes to auction and does not sell (often called ‘passed in’), you may than choose to negotiate with the highest bidder. Often the auction terms and conditions will continue to apply for a period of time after the auction has ended. This means the offers you receive will be unconditional and presented on the auction sale and purchase agreement. When this time has passed, you may want to talk to your agent about how to re-market your property and what other sales method may suit you.

Before the auction prospective buyers may ask the agent if they can change some of the terms of the sale and purchase agreement such as the settlement date. You do not have to agree, but if you do and that buyer is successful, the sale and purchase agreement will contain that term. If your property sells at auction, both you and the buyer will sign the sale and purchase agreement as soon as the auction ends.

Read more about selling by auction here.

An offer from anyone in the agency or their relatives

If someone connected professionally or personally to your agent wants to buy your property, this could be a conflict of interest.

If your agent or someone connected to them wants to buy your property, they must get your written consent and provide you with an independent valuation.

If you don’t want the agent or someone connected with them to buy your property, you don’t have to give consent.

Conflict of interest extends to a wide range of people connected to the agent. Examples of people connected to an agent are:

  • the agent’s business partner
  • the agent’s employee
  • the agent’s partner or spouse
  • the agent’s (or their partner/spouse’s) child, grandchild, siblings or grandparents
  • the agent’s (or their partner/spouse’s) aunt, uncle, nephew or niece
  • a company connected to the agent.

It does not include friends or cousins.

It is important that your agent acts in your best interests. If your agent or someone connected to them offers to buy your property, you can:

  • ask to deal with another agent from the same agency
  • get the agent to deal directly with your lawyer (rather than you).

If your agent wants to buy your property themselves, they can only continue to act for you if they have your written consent. A different agent at the agency should take over as your agent to help you negotiate the sale with the buyer-agent.

The process for selling to your agent or a person connected to them

Before you sign a sale and purchase agreement with the agent who is selling your property or someone connected to your agent, the agent must:

  • ask you to sign a consent form showing you agree to them (or someone connected to them) buying your property
  • give you (at their expense) a valuation of the property from an independent registered valuer.

If the agent gives you the consent form and the valuation at the same time, compare the valuation to the offer the agent has given you and make sure you are happy with the offer. If you are not happy, you can reject the offer or negotiate. When you sign the sale and purchase agreement, you will be in a legally binding contract.

If you sign the consent form before the agent gives you the independent valuation, the agent must record on the consent form the price they appraised your property for and then give you the independent valuation within 14 days of you signing the consent form.

If the independent valuation is greater than the price they appraised your property for, you can cancel the sale and purchase agreement with no penalty, and you don’t have to pay the agency commission.

If you enter into a sale and purchase agreement with your agent (or a person connected to them) without signing the consent form, you can cancel the sale and purchase agreement with no penalty, and you don’t have to pay the agency.

If you are selling to your agent or someone connected to them, we recommend you get independent legal advice from your lawyer.

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The property selling process

The property selling process