How to Make an Offer on a House and Win in a Competitive Market

The NSW property market continues to challenge home buyers with fierce competition and limited inventory in desirable areas. Making a successful offer in this environment requires strategy, preparation, and sometimes a bit of creativity. This guide provides practical steps to help you secure your dream home even when facing multiple competing offers.

Understanding the Current NSW Property Market

Before making an offer, it's essential to understand what you're up against. The NSW housing market, particularly in Sydney and surrounding growth areas, remains competitive despite recent interest rate increases.

"We're seeing a fundamental supply-demand imbalance across NSW that continues to drive competition," explains Peter Matthews, Chief Economist at Sydney Property Analytics. "While listings have increased slightly in 2023, buyer demand still outpaces available inventory in most desirable suburbs, creating competitive conditions for well-presented properties."

Recent CoreLogic data shows that homes in popular NSW suburbs typically receive 5-8 offers, with desirable properties often exceeding this number. Understanding this competitive landscape helps set realistic expectations and informs your offering strategy.

Pre-Offer Preparation: Position Yourself for Success

Get Your Finances in Perfect Order

In competitive markets, financial preparation isn't just helpful—it's essential.

"Sellers and their agents prioritise buyers who demonstrate financial readiness," says Sarah Thompson, Senior Lending Manager at Australian Mortgage Brokers. "Having pre-approval from a lender dramatically strengthens your position, particularly when compared to potential buyers who still need to sort their financing."

To prepare financially, you must secure a formal pre-approval (not just an online calculator estimate). Have your deposit funds readily accessible and understand your borrowing capacity precisely. Finally, prepare for potential valuation gaps if bidding above recent comparable sales

Research Thoroughly: Know the Property and Area

Comprehensive research provides confidence when making your offer.

• Recent comparable sales in the immediate neighbourhood
• Time-on-market trends for similar properties
• Development plans that might affect the property's future value
• Building and pest inspection results, if available

"The most successful buyers I work with know almost as much about the local market as I do," notes James Robertson, Buyer's Agent at NSW Property Finders. "They've done their research on comparable sales, understand council zoning, and know exactly what represents fair value for a particular property."

Crafting a Winning Offer Strategy

Determine Your Walk-Away Price

Before entering negotiations, establish your absolute maximum price—the number beyond which you simply won't go.

"Emotional attachment to a property can lead to poor financial decisions," warns Michelle Chen, Financial Advisor at Wealth Strategies Sydney. "I advise clients to determine their walk-away price before attending inspections, based on objective factors like their financial situation and the property's fair market value."

This discipline prevents the common trap of incremental bidding beyond your means during heated negotiations.

Consider Non-Price Factors That Appeal to Sellers

While price matters, other factors can distinguish your offer.

Settlement flexibility: Adapting to the seller's preferred timeline

Reduced conditions: Limiting contingencies that create uncertainty

Larger deposit: Demonstrating serious commitment

Personal connection: A thoughtful letter explaining why you love the home

"I recently had sellers accept an offer that wasn't the highest because the buyers offered a rent-back arrangement that allowed the sellers to stay in the property for two months after settlement," shares David Williams, Principal at Eastern Suburbs Realty. "Understanding the sellers' needs beyond just price can give you a significant advantage."

Making Your Offer: Tactical Approaches

The Price-Bracket Strategy

Rather than offering a specific figure, some successful buyers employ a bracket strategy.

"We often advise clients to offer a small range rather than a fixed price," explains Emma Brown, Senior Buyer's Agent at Sydney Home Search. "For example, instead of offering $1.2 million, consider offering $1.2-$1.225 million. This signals willingness to negotiate while establishing clear parameters."

This approach demonstrates flexibility while still maintaining your disciplined maximum price.

Odd Number Psychology

Consider using precise, odd numbers rather than round figures.

"Psychology plays a huge role in how offers are perceived," says Dr. Nathan Harris, Behavioural Economist at University of Sydney. "An offer of $1,217,000 versus $1,200,000 suggests the buyer has calculated their absolute maximum rather than just picking a round number. It can signal to sellers that there's limited room for negotiation upward."

Pre-Emptive or Knockout Offers

In extremely competitive situations, a strong pre-emptive offer before the scheduled auction can sometimes secure the property.

"If you're confident about a property's value and have done thorough research, making a compelling offer before auction can work," advises Rebecca Zhang, Director at North Shore Property Advocates. "We recently helped clients secure a Mosman property by offering 7% above the price guide three days before auction, coupled with a 5-day decision deadline."

This strategy requires confidence, research, and an understanding that you might pay a premium to avoid auction competition.

Presenting Your Offer Effectively

Build Rapport with the Selling Agent

The selling agent significantly influences the process, making positive relationships valuable.

"Establish yourself as a serious, straightforward buyer," recommends Tony Davies, veteran Real Estate Agent in Newcastle. "Agents appreciate buyers who communicate clearly, respond promptly, and demonstrate genuine interest. When presenting multiple offers to sellers, agents naturally advocate more enthusiastically for buyers they trust and respect."

Provide Evidence Supporting Your Offer

Back your offer with market evidence that justifies your proposed price.

"When submitting offers, we include a brief market analysis showing comparable sales that support our client's price position," explains Lauren Mitchell, Principal at Western Sydney Property Advisors. "This demonstrates to sellers that our offer is based on market reality, not just what our clients hope to pay."

This approach is particularly effective when your offer might be below the seller's expectations.

Handling Multiple Offer Situations

Ask the Right Questions

"Information is power in multiple-offer scenarios," notes John Pearson, buyer's agent at Sydney Property Scouts. "Good agents won't disclose other offer amounts, but understanding the competitive landscape helps inform your strategy."

When facing multiple offers, gather as much information as possible

• How many other offers are being presented?
• Will there be an opportunity to improve your offer?
• What factors beyond price are important to the seller?

Consider a Stepped Increase Approach

Some buyers provide initial offers with automatic increase provisions.

"We sometimes include an escalation clause stating our client will exceed the highest bonafide offer by $5,000 up to their maximum," shares Melissa Rogers, Principal at Harbour City Buyers Agents. "This can work in multiple offer situations, though not all agencies accept this approach."

When You Don't Win: Resilience and Perspective

Despite best efforts, you won't secure every property you pursue in competitive markets. Maintaining perspective is crucial.

"The most successful buyers understand that purchasing property is partly a numbers game," observes Richard Thompson, who has 25 years of experience in NSW real estate. "I've seen clients devastated after missing out on 'perfect' properties, only to find something better a month later. Persistence and emotional resilience are essential qualities in competitive markets."

Key Takeaways

With the right approach and mindset, you can successfully navigate even the most competitive NSW property markets and secure your ideal home. Winning in competitive property markets requires preparation, strategy, and sometimes patience.

• Secure rock-solid financing before making offers
• Research thoroughly to understand true market value
• Consider the seller's needs beyond just price
• Develop a relationship with the selling agent
• Stay disciplined about your maximum price
• Be prepared to act decisively when the right property appears
• Maintain perspective if you miss out—persistence usually pays off