Making an offer
You’ve found a home you’re interested in – now it’s time to make an offer. Here you can find out what may be involved and what you need to do.
The three main ways to buy a home in New Zealand are:
- Offer and negotiation
Offer and negotiation
The property may be advertised with a price or invitation for offers over a certain amount, or sometimes without any price indication at all. You simply contact the real estate agent or vendor and make an offer.
They may accept your offer, or they may want to negotiate on the price or the conditions. The real estate agent acts as the go-between where you are not dealing directly with the vendor, trying to help you and the vendor reach an agreement. You should always have your lawyer check any offer documents or agreements before you make an offer.
Unless you really want the property don’t make your best offer straight away and give yourself some room to move. When negotiating, 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) by a certain date. Once the vendor has received all the tenders, they choose which, if any, offer to accept. If they don’t, they may choose to negotiate with one of the tenders.
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.
With the tender process you won’t know what the other tenderers are offering – and as you may not get the chance to negotiate, you may want to put your best offer forward. Like the offer and negotiation method of buying a house, the fewer conditions you have the more attractive your tender offer will be – but make sure you do your homework first. Remember to have your lawyer check any tender documents before you submit a tender.
An auction is where you bid against other people until only one bidder is successful. The vendor sets a reserve price that only they, the auctioneer and the real estate agent know. Once bidding reaches the reserve price, the property is ‘on the market’ and must be sold 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.
Remember that 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 LIM and builders’ report) before the auction. You also need to be sure you have the finance available – you also need to be sure you have the finance available 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. Some things to consider:
- It’s easy to get carried away. Make sure you are clear on your maximum price and don’t exceed it in the excitement.
- To prevent you going over your limit, consider asking a friend, or family member to go with you (or have someone else represent you at the auction).
- Prepare for the auction by thinking about price:
- a price you think would be a bargain for the property
- the price you think the property might sell for
- the maximum price you're prepared to pay for the property.
When you’re buying a house, being prepared can save you 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 give you a guide of the prices houses are selling for in that area.
Research the market
Location is a 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 QV website.
If you have your home loan conditionally pre-approved with us, you receive two free E-Valuer reports. An E-Valuer 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 should consider getting 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.
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 would like to speak to an ANZ Authorised Financial Adviser, please call 0800 269 296.
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