You’re looking to buy a house and you’ve found one that you’re interested in – now it’s time to make an offer. In this section you can find out what’s involved and what you need to do.
Watch this video to see one of our Mobile Mortgage Managers discuss the buying process and offer some tips for negotiation.
When you’re buying a house, a little preparation can save you a lot of money. Before you make an offer make sure you do as much research as possible about both the local market and the property itself. That will help ensure what you’re prepared to pay is not too high (or too low). It will also help you decide if you should include any conditions.
Research the market
Location is a big factor in the value of a home, so before you buy a house in a particular area get a feel for what’s happening in the local market. Find out what similar homes in the area have sold for recently, and how long they have taken to sell. Your real estate agent should be able to help, or you can buy a local sales report from Quotable Value.
When you have your home loan conditionally pre-approved with us, you also receive two free eValuer reports. An eValuer report provides you with an instant automated estimate of a property’s market value, plus recent comparable property sales in the area.
Research the property
Find out as much as you can about the property. Things to think about include:
- what condition is the property in
- are there any obvious issues that could affect the price, or potentially deter you from buying the house
- is the home likely to need repairs or renovation in the near future?
Once you’ve found a property you’re serious about, you may also want to get your own reports on the property, including:
- a Land Information Memorandum (LIM) from the local council, which contains all the information the council knows about the property including any special features you should be aware of such as flooding, sinking or possible contamination
- a valuation report, which provides an opinion from a registered valuer on the current market value of the property
- a building inspection report which provides an opinion on the condition of the property and any issues.
There are three main ways to buy a house in New Zealand:
A property for sale by offer and negotiation will sometimes be advertised with a price or invitation for offers over a certain amount, however may not include any price indication at all.
The vendor may accept your offer, or they may want to negotiate on the price or conditions. The real estate agent will act as the go-between, trying to help you and the vendor reach agreement.
Most vendors expect to negotiate, so you may not want to give yourself some room to move – don’t make your best offer straight away. Don’t allow the agent or vendor to pressure you into a hasty decision. Buying a house is one of the biggest purchases you will ever make, so take the time you need - remember there’s always another house.
Buying a house by tender means everyone interested in the property submits a written offer (tender), usually at the same time. Once the vendor has received all the tenders, they decide whether or not to accept any offer. If they don’t, they may choose to negotiate with one of the bidders. A vendor will indicate when their property is for sale by tender.
If you’re interested in buying a house that’s being sold by tender, let the real estate agent know. This is called "registering your interest" and means the agent must let you know if any pre-tender offers are made.
When you’re buying a house by tender you won’t usually know what the other offers are. Tenders can be conditional offers, - but if you’re really keen on the property, you may want to put your best offer forward as you may not get a chance to negotiate.
An auction is where you bid against other people until only one bidder is left. The vendor sets a reserve price that only they, the auctioneer and the real estate agent know. Once bidding reaches the reserve price, the vendor must sell the property to the highest bidder. If the reserve price isn't met, the property is "passed in" and the vendor may choose to negotiate with the highest bidder. When you make a bid at auction your offer is unconditional, so if you win the auction you’re legally bound to buy the house. That means you need to do all your research (such as getting a builders’ report) before the auction. You also need to be sure you have the finance available – so it’s a good idea to get your home loan pre-approved before you bid at an auction.
If you’re interested in buying a house that is being sold by auction, register your interest with the real estate agent. They must then let you know if any pre-auction offers are made.
An auction can be a high-pressure way to buy a house, so you may want to go to a few first to see how they work. In addition:
When you’re buying a house by offer and negotiation or by tender, you can make a conditional offer. This means you can add specific conditions to your offer which must be met. Conditions can be anything you like - a common one is ‘subject to a satisfactory valuation report’). If the conditions aren’t met you can withdraw your offer. If the conditions are met, however, your offer becomes unconditional – which means you’re legally obliged to buy the house.
It’s a good idea to have your lawyer review any sale and purchase agreement or tender document first – they can advise you on suitable conditions you may want to include.
Adding conditions to your offer gives you the reassurance of knowing you can withdraw your offer if you discover an issue with the property at a later stage – for example, in a building report. On the other hand, the fewer conditions you have the more attractive your offer will be the more chance it has of being accepted as there may be more chance of the deal going through.
For more information or to apply for an ANZ Home Loan:
Contact an ANZ Mobile Mortgage Manager
Call 0800 ANZ HOME (0800 269 4663)
Visit your nearest ANZ branch
For the ANZ First Home package, you need an ANZ everyday account with your salary, wages or business income direct credited and an ANZ Serious Saver account. ANZ lending criteria, terms and conditions and fees apply to all loans.
A copy of the Reserve Bank Disclosure Statement published by ANZ Bank New Zealand Limited may be obtained on request from any ANZ branch.
This material is for information purposes only. Its content is intended to be of a general nature, does not take into account your financial situation or goals, and is not a personalised financial adviser service under the Financial Advisers Act 2008. It is recommended you seek advice from a financial adviser which takes into account your individual circumstances before you acquire a financial product. If you wish to consult one of ANZ's financial advisers, please contact us on 0800 269 296.
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