How do you make an offer on a house?

Buying a home in Melbourne is an exciting milestone, but the process can feel daunting if you haven't done it before. From choosing a strategy to understanding Victoria's deposit rules and cooling off rights, each step matters. This guide walks you through the entire journey so you can approach your purchase with confidence and negotiate like a pro.

1. Start with Research and Realistic Finances

Before you put pen to paper, make sure you know what your money will buy. Compare recent sales in the suburb, chat with local agents and use online tools to gauge a fair price range. At the same time, organise formal loan pre-approval with your bank or broker. A solid pre approval letter strengthens any written offer because the seller knows you have the funds ready. It also gives you a ceiling so you avoid emotional overspending on auction day or during negotiations.

2. Build the Right Team Early

Victorian property law is technical, so surround yourself with specialists. A licensed conveyancer or property solicitor will:

• Review the Section 32 (Vendor's Statement) and draft contract
• Flag any adverse planning overlays, easements or hidden costs
• Advise on special conditions that protect you, such as "subject to finance" or "subject to building and pest inspection"

Engaging a conveyancer before you make an offer means they can react quickly when the perfect home appears crucial in fast-moving Melbourne markets.

3. Inspect the Home Thoroughly

Attend at least two inspections at different times of day. Check water pressure, phone reception, natural light and nearby traffic noise. If serious, book a qualified building and pest inspection. While Victoria's standard "defects clause" covers major structural issues, an independent report arms you with facts to negotiate the price or decide to walk away.

4. Gather the Paperwork

Ask the agent for a copy of the draft Contract of Sale and the Section 32. Provide these to your conveyancer for a quick review. They will confirm inclusions (for example, dishwasher or wall mounted TV brackets) and note any special levies if the property is in an owners corporation. Never rely on verbal promises only what is in the written contract is enforceable under Victorian law.

5. Decide Your Offer Strategy

Price

Study comparable sales and set a firm walk away figure. Melbourne vendors expect buyers to negotiate, but "low-ball" bids can alienate them. In a tight market, many buyers open with their best and final price to cut out competitors.

Conditions

Most private sale offers include one or more conditions such as:

• Subject to finance (commonly 14 days)
• Subject to building and pest inspection (7 - 14 days)
• Subject to satisfactory valuation

A clean offer with fewer conditions is more attractive, yet always balance speed against risk. If you waive all conditions and cannot later secure finance, you could forfeit part or all of your deposit.

Settlement Period

Thirty, sixty or ninety days are standard, but longer or shorter time frames are negotiable. Align settlement with the expiry of your current lease or the completion of renovations on the property you are selling.

Deposit Amount

Victorian law does not prescribe a set deposit. Ten per cent of the purchase price is traditional, but you may negotiate five per cent or split payment into an initial "holding deposit" followed by the balance once contracts are signed.

6. Put the Offer in Writing

Legally, only a written offer can bind the parties. In most cases you will either:

• Sign the full Contract of Sale with your price and conditions filled in; or
• Sign a shorter "Expression of Interest" or "Letter of Offer" that the agent then converts into a contract once the seller accepts

Include every detail: purchase price, deposit size and due date, settlement period and your special conditions. The agent must present all written offers to the vendor unless the vendor has given other instructions.

7. Understand What Happens Once the Seller Countersigns

After the vendor signs, the contract becomes legally binding on both parties subject only to any conditions you included and Victoria's statutory cooling off period. At this point you will usually pay the balance of the deposit into the agent's trust account, where it remains until settlement or until both parties agree to release it earlier. Trust accounts are strictly regulated, so your money is protected.

8. Victorian Deposit Rules Explained

Amount: Generally 10 per cent, but can be any figure agreed between buyer and seller, and may be split into two stages.

Trust Account: The agent or the vendor's lawyer must hold the deposit in a designated trust account. 

Refunds: If a condition is not met (for example, you are declined finance within the specified period) the deposit is refunded in full.

Holding Deposit: Sometimes an agent will request a small holding deposit often 0.25 per cent before contracts are exchanged. This shows good faith but does not secure the property until the formal contract is signed.

Always confirm the payee details independently with the selling agency to avoid payment-redirection scams.

9. Cooling Off Period in Victoria

Private residential sales in Victoria come with a three business day cooling off period that starts the day you receive a signed copy of the contract. Key facts:

How to Cool Off: Serve written notice on the vendor or their agent within the three day window. Email is acceptable if the contract permits electronic communication.

Penalty: You forfeit the greater of $100 or 0.2 per cent of the purchase price (that is, $1,000 on a $500,000 home).

Exceptions: No cooling off right if you buy at auction (or within three business days before or after an auction), purchase industrial or commercial property, buy farmland over 20 hectares or sign a contract in the name of a company.

Cooling off is a safety net, but do not rely on it as a "free option". The penalty can hurt, and you may lose professional fees already spent on inspections or valuations.

10. What If You Buy at Auction?

Auctions are common in Melbourne's inner suburbs. If you are the highest bidder and the property is on the market, you must sign an unconditional contract on the spot and pay the deposit immediately usually by electronic transfer or credit card to the agent's EFTPOS terminal. There is no coolingoff period, and your bid is irrevocable. Arrange finance approval and review the contract before auction day so you can bid with certainty.

11. After Acceptance: Managing Conditions and Settlement

Finance Approval: Provide the signed contract to your lender promptly. If your finance clause is 14 days, aim for unconditional approval in ten.

Building and Pest: Book inspections quickly. If serious defects arise, instruct your conveyancer to negotiate repairs, a price reduction or, in extreme cases, end the contract under your condition.

Insurance: In Victoria risk passes at settlement, but many lenders require you to insure from the day of signing. Check your loan agreement.

Transfer of Land and Stamp Duty: Your conveyancer will prepare the Statement of Adjustments and lodge the transfer through PEXA. Budget for stamp duty, registration fees and their professional costs.

Keep communication open with your conveyancer, lender and the agent so small issues do not snowball into settlement delays.

12. Common Pitfalls to Avoid

• Signing before review: Do not sign even an "Expression of Interest" until your conveyancer checks it
• Unrealistic settlement: A settlement that is too short may leave you scrambling for funds
• Waiving conditions: Omitting a finance or inspection clause makes your offer stronger but exposes you to more risk
• Deposits on credit card: A cash advance fee may apply. Confirm with your bank first
• Not reading everything: Small clauses on adjustments, chattels and penalty interest can cost thousands later

13. Final Checklist

Conclusion: Move Forward with Expert Support

Making an offer on a house in Melbourne involves more than choosing a number. By preparing solid finances, crafting clear conditions and understanding Victoria's deposit and cooling off rules, you set yourself up for a smooth purchase and a stress-free move.

If you would like personalised guidance, the team at Pearson Chambers Conveyancing is ready to help. We will review your Section 32 for free, explain every clause in plain English and negotiate contract changes that safeguard your interests.

Phone: 03 9969 2405
Email: contact@pearsonchambers.com.au

Reach out today and take the first confident step towards owning your Melbourne home.