Private treaty sales are the most common way for property to change hands. This involves a real estate agent, or with property for sale by owner, the owner themselves, setting an asking price. The property is put on the market and a buyer is sought. The price is often negotiable.

When you have found a house to buy or bid on, you may want to notify your bank/broker and solicitor or conveyancer first to make sure everything is in order and they are on hand to help you once you successfully make an offer.

How to make an offer

If you wish to buy a property, you make an offer to the real estate agent, who then talks to the property owners. There is usually some negotiating of price, and if both parties are happy with a price, a contract of sale is signed by both the vendor and the purchaser.  This is called ‘exchanging contracts’ and is when you put down a deposit.

With private treaty sales there is a legislative cooling-off period after the contracts have been exchanged (unless the period has been waived at the election of both parties). This means that the purchaser can change their mind and decide not to go ahead with the purchase. The purchaser must inform the seller in writing, and the deposit will be returned. However, the vendor may be entitled to retain 0.25% of the  purchaser’s deposit. This may vary depending on the type of purchase, the contract and the state/territory you are in.

Tip:

• Beware of gazumping - it is not until you have exchanged contracts that the property is yours.