There are a number of different ways to purchase a first home;
Tender (also known as multi offer – this is where the buyer accepts all offers on one day, they will choose the offer with the most appeal to them, decline all offers, or come back with counter offer)
Negotiation (The most common type of property sales in the market, this is where you can negotiate directly with the vendor’s agent (or vender directly in the case of a private sale) until you agree on the sale price and conditions.
Private Sale (Similar to negotiation with out the real estate agent involved, instead you will need to work closely with your lawyer to draw up an appropriate sale and purchase agreement.)
Auction (Before going to any auction all terms and conditions for the bank must be met, and your offer must be unconditional including having the lawyer confirm the property and LIM prior to auction day. Remember when you bid and win at auction the sale is final, you must pay the non-refundable deposit on the day.)
How much should I offer, when purchasing a home?
Knowing what price a property is worth can be difficult, hence why getting a registered valuation report done can be pricey but useful to help decide the value of the property. A buyers agent can be very useful in helping to provide you with information as a guide to understand what the property is worth in the market also.
First things first, the advertised price usually indicates the vendors expectations, whether or not these match the market.
Here’s some tips to help you when making an offer;
- Try talking to the agent they should be more than happy to discuss the sale price verbally.
- Do your market research for example: drive around the local area in the day and at night, check the local council’s website to find out what the rate-able value is.
- Request a transcript of local area sales from the agent it may help to show why its valued at that amount.
- Drive past the properties listed on the recent sales transcript, this can sometimes help to show differences between the houses as to location, street appeal, presentation and the type of building. The report also provides some basic information about the property including the floor area, age and number of bedrooms/bathrooms.
- homes.co.nz often lists estimated values of properties in New Zealand, otherwise there are other options for example: making your written offer subject to a registered valuation (there will be a cost for the valuation so remember to have some funds set aside to cover this), however the difference is, it is done by a registered valuer who walks right through the property in order to write a report which determines and explains their reasoning behind the property’s value).
- Remember to take into account any outstanding maintenance or maintenance to be completed into your offer.
- If you believe the house is worth 20k less, tell the agent and your reasons behind it.
- Check out the real estate agent’s authority page for more helpful guides and information.
- Remember if you are using KiwiSaver, allow at least 10 clear working days in order to compete finance conditions.