Why getting pre-approval could make your offer stand out!

I recently spoke with a buyer who was sick and tired of missing out on properties. They were looking to buy in a particularly hot segment of the market and every time they put in an offer it felt like half of Brisbane was also putting in an offer. Surprisingly, they weren’t critical of the agent. They had been given opportunities to increase their offer, and they had signed ‘multi-offer’ forms, but kept missing out. For clarity, a ‘multi-offer’ form is real estate language for a form given to a buyer when there are other buyers also making offers.

It explains that each offer could be the only opportunity the buyer has to submit, and they should make their offers knowing that their offer will be presented as a ‘final offer’. The buyer was chasing some advice on how to win. Rather than give them negotiating advice, I asked if they were preapproved by a broker? They weren’t. They had a relationship with their bank and they had been advised to put a ‘subject to finance’ clause on their offers. In my experience a broker gets closer to the deal at this end of the market. Even banks now do the majority of their loans through brokers. If a buyer can remove the ‘finance condition’ then we refer to that offer in the industry as a ‘cash offer’ and owners love cash contracts! Getting pre-approved is free, but it can’t save you thousands. The comfort for an owner in a contract with a finance clause has a value and it’s that value that can move your offer from the bottom of the pile to the top!