How to Make an Offer on a Property in Australia (Private Treaty)

Most homes in Australia sell by private treaty, which means there is no auction and the property is listed with an asking price or a price guide. You negotiate directly with the vendor through their agent. Knowing how an offer is built, and what makes one offer stronger than another, puts you in a better position before you commit money to a purchase.

This guide explains how private treaty offers work, what goes into an offer, the conditions you can attach, and how each choice affects how attractive your offer looks to a vendor. It also covers how to price your offer using evidence, how the cooling-off period fits in, and how a buyers agent negotiates on your behalf.

How Private Treaty Offers Work

A private treaty sale is a negotiation. The vendor sets a price or a guide, buyers make offers, and the property sells when the vendor accepts one. Unlike an auction, there is no fixed deadline and no public bidding, so you have room to negotiate on price and on terms.

Offers can be verbal or written. A verbal offer is a starting point for the conversation, and an agent will often take one to gauge a buyer's interest. A verbal offer carries no legal weight, and either side can walk away from it at any time.

The strong form of an offer is a written offer made on the contract of sale, signed by you with your deposit terms and conditions set out. A signed contract shows the vendor you are serious and ready to proceed, and it puts your exact terms in front of them in black and white. In most cases the property is not legally sold until contracts are signed by both parties and exchanged, so a written offer moves you closer to that point than a verbal one.

What Goes Into an Offer

An offer is more than a number. The vendor weighs the whole package, and the terms around your price often matter as much as the price itself.

The main elements of an offer are:

• Price. The amount you are offering to pay for the property.
• Deposit. The amount you pay on signing, commonly around 10 per cent of the purchase price, though a smaller deposit can sometimes be negotiated.
• Settlement period. The time between exchange and the day you take ownership, often 30 to 90 days, depending on what suits both parties.
• Conditions. Any terms the sale depends on, such as finance approval or a satisfactory building inspection.

Each of these is negotiable. A vendor who wants a quick, certain sale may favour an offer with a shorter settlement and fewer conditions over a slightly higher offer that carries more risk. Matching your terms to what the vendor wants can make a lower price more competitive.

Common Conditions and Subject-To Clauses

A condition, often called a "subject-to" clause, lets you withdraw from the contract without penalty if a specific thing is not met by an agreed date. Conditions protect you, and every condition you add also reduces the certainty the vendor gets from your offer. The more conditions you attach, the less attractive your offer looks against a cleaner one.

The most common conditions are below.

Subject to Finance

A subject to finance clause makes the sale conditional on you obtaining formal loan approval by a set date. If your lender declines or does not approve in time, you can withdraw and recover your deposit, subject to the terms of the contract.

This is a sensible protection for most buyers who need a loan. It does carry weight for the vendor, because it leaves open the chance that your finance falls through. Having pre-approval in place and naming a realistic approval date helps reduce that concern.

Subject to Building and Pest

A building and pest clause makes the sale conditional on a satisfactory inspection report. It lets you check for structural problems, pest damage and other defects before you are locked in, and to withdraw or renegotiate if the report uncovers significant issues.

Vendors generally accept this condition because it is standard practice. Keeping the inspection period short signals that you intend to move quickly.

Subject to Sale of Your Home

A subject to sale clause makes your purchase conditional on you first selling your existing property. It protects you from owning two homes at once, but it is the weakest condition from a vendor's point of view, because it ties their sale to a separate transaction they cannot control.

An offer subject to the sale of your home is usually the least attractive, all else being equal. A vendor may still accept it, often at a firmer price or with a clause that lets them keep marketing the property and accept a better offer.

Unconditional Offers and the Risk They Carry

An unconditional offer has no subject-to clauses attached. Once accepted and exchanged, you are committed to completing the purchase, regardless of finance, inspection results or the sale of another property.

An unconditional offer is the most attractive form of offer because it gives the vendor maximum certainty. That strength comes with real risk to you. If your finance falls through, or an inspection later reveals a serious defect, you are still bound to settle. Failing to settle can mean losing your deposit and exposure to further loss.

Only consider an unconditional offer when you have done your homework first, with finance fully approved and inspections completed before you sign. For most buyers, a well-structured conditional offer is the safer choice.

How to Decide Your Offer Price

Your offer price should rest on evidence, not on the asking price or on how much you want the property. The asking price is the vendor's starting position, and a price guide is an estimate, so neither tells you what the property is actually worth.

The strongest evidence is comparable sales. These are recently sold properties that are similar to the one you want in location, size, condition and features. Look at what those properties actually sold for, not what they were listed at, and adjust for differences such as land size, renovation quality or aspect.

Work through this process:

• Gather recent sales of similar properties in the same area, ideally from the last three to six months.
• Adjust each comparable up or down for differences against the property you want.
• Form a value range from that evidence, then decide where within the range your opening offer and your ceiling sit.

Set your maximum before you start negotiating and hold to it. Knowing your number, and the evidence behind it, keeps you from being drawn into paying more than the property supports.

Negotiation Tactics That Work, and Ones That Backfire

Negotiation on a private treaty sale is about more than the number. The terms, your conduct and your evidence all shape the outcome.

Tactics that tend to work:

• Lead with evidence. Reference comparable sales to justify your price, so your offer reads as considered rather than arbitrary.
• Use your terms. Offer a shorter settlement, a cleaner set of conditions or a flexible move-in date if those suit the vendor, in exchange for a price that works for you.
• Make a written offer on the contract. A signed contract carries more weight than a verbal figure.
• Stay measured. A calm, prepared buyer is taken more seriously than one who appears emotional or rushed.

Tactics that tend to backfire:

• Opening far below evidence. A lowball offer with no basis can offend a vendor and sour the negotiation before it starts.
• Revealing your ceiling. Telling the agent the most you would pay hands them your position, and the agent acts for the vendor.
• Showing how much you want it. Visible eagerness weakens your hand and can firm up the vendor's price.
• Constant renegotiation. Repeatedly changing your terms after agreement erodes trust and can cost you the property.

How Agents Work for the Vendor

The selling agent is engaged and paid by the vendor. Their legal duty is to act in the vendor's interests, which usually means achieving the highest price on the best terms. The agent is not your adviser, even when they are helpful and friendly.

This matters for how you deal with them. Anything you reveal about your budget, your urgency or how much you love the property can be used to strengthen the vendor's position. Be courteous and build a working relationship, but keep your strategy and your maximum to yourself.

This is also where a buyers agent comes in. A buyers agent acts only for you, the purchaser, which means there is a professional on your side of the table to match the experience the vendor already has.

The Cooling-Off Period

In most states, a private treaty purchase comes with a cooling-off period after the contract is signed. This is a short window in which you can withdraw from the contract, usually by paying a small penalty calculated as a percentage of the purchase price. It gives you a final chance to confirm finance, complete checks or simply reconsider.

The length of the cooling-off period and the penalty for using it vary between states and territories, and some have no statutory cooling-off period at all. Always confirm the rules that apply where you are buying. [Verify]

One point applies everywhere. There is no cooling-off period when you buy at auction. An auction purchase is unconditional and binding the moment the hammer falls. [Verify] Private treaty is the path that generally allows cooling-off, which is one reason it suits buyers who want time to complete their due diligence.

Deposits and Holding Deposits

There are two kinds of deposit to understand.

A holding deposit is a small amount, sometimes a few hundred or a few thousand dollars, that a buyer pays to show genuine interest while terms are being finalised. A holding deposit is generally refundable and does not by itself bind either party to the sale. Confirm in writing what a holding deposit means in your case before you pay one. [Verify]

The contract deposit is the larger amount, often around 10 per cent, that you pay on exchange of contracts. This deposit forms part of the purchase price and is usually held in the agent's or solicitor's trust account until settlement. If you withdraw outside the protection of a condition or the cooling-off period, you may forfeit this deposit, so understand your obligations before you sign.

What Happens After Your Offer Is Accepted

Acceptance is the start of the process, not the end. The path from an accepted offer to ownership runs through several steps.

• Exchange of contracts. Both parties sign and swap copies of the contract. At this point the sale becomes legally binding, subject to any cooling-off period and conditions.
• Cooling-off period. Where it applies, your window to withdraw runs from exchange. Many buyers use it to finalise finance and inspections.
• Satisfying conditions. You work through your subject-to clauses, such as obtaining formal finance approval and completing a building and pest inspection, each by its agreed date.
• Going unconditional. Once every condition is met or waived and any cooling-off period has passed, the contract becomes unconditional. You are now fully committed to settle.
• Settlement. On the settlement date, the balance of the price is paid, the title transfers and you take ownership.

Engage a conveyancer or solicitor early, ideally before you sign, so the contract is reviewed and your interests are protected through each of these steps.

How a Buyers Agent Negotiates on Your Behalf

A buyers agent is a licensed professional engaged by the purchaser to search for, evaluate and negotiate the purchase of a property. Because they act only for you, their job is to secure the property on the best terms you can get, which is the opposite of the selling agent's role.

In a private treaty negotiation, a buyers agent works on price and on terms. They build the evidence case from comparable sales, set a defensible value range, structure the conditions and settlement to suit you, and handle the back and forth with the selling agent. They negotiate at arm's length, which keeps emotion out of the conversation and stops the selling agent reading your urgency.

A buyers agent also brings familiarity with how selling agents operate, which helps level a negotiation that would otherwise have a professional on one side only. For buyers who are time-poor, buying in an unfamiliar area, or simply want an experienced advocate, that support can be the difference between an offer that lands and one that does not.

Bringing It Together

A strong private treaty offer is built on evidence and structured to match what the vendor wants. Price your offer from comparable sales, choose your conditions deliberately, understand the cooling-off period and the deposits involved, and remember that the selling agent works for the other side. Do the work before you sign, and you put yourself in the best position to buy well.

If you would like an experienced advocate on your side of the table, AgentBridge can connect you with a buyers agent who negotiates only for you.

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This article is general information only and does not take into account your personal circumstances. It is not financial, tax or legal advice. Property laws, including cooling-off periods and deposit rules, vary between states and territories. Confirm the rules that apply to you and seek advice from a licensed conveyancer, solicitor or other qualified professional before making an offer or signing a contract.