Making an offer

Even if you have conditional home loan pre-approval, you still need to confirm your finances with your bank when you’re ready to make an offer on a house.

Your lender will probably want to see a copy of the sale and purchase agreement, a LIM report, and a property evaluation from your building inspector before they give your loan application the big tick!

The sale and purchase agreement is a legally binding contract, signed by yourself and the seller. Outlining terms of the sale, such as the price and settlement date, it also specifies exactly what is included in the sale, like chattels being sold with the property - so you can check if the garden gnomes come with the garden!

Before you sign this document you will need to think about whether you want to make a conditional or unconditional offer.

Unconditional offers

An unconditional offer is an agreement to buy a property at a certain price with no conditions attached. This means you’re legally obliged to complete the transaction without any further due diligence checks being met first.

Conditional offers

On the other hand, a conditional offer states that you are happy to purchase the property after certain conditions have been met. A date for meeting these conditions will be outlined in the document. Common conditions include:

• Obtaining a satisfactory property inspection report
• Finance approval from your lender
• Getting the LIM report from the Council
• Having the market value assessed
• Receiving confirmation that the house can be insured. Having house insurance is likely to be a condition of your home loan, so it can help to make sure you’re offering on an insurable property.

Once the agreed conditions are met by both parties, the offer goes unconditional. This means you are now obligated to purchase the property (and you can start planning the house warming party). Whether you make a conditional or unconditional offer, it can be critical that the sale and purchase agreement is checked by your lawyer first as this is a legal contract that can’t be backed out of easily once signed.

There's several methods that are commonly used to sell houses in New Zealand. Understanding these methods can help when you're making an offer.

When buying at auction, you are making an unconditional offer, so you need to complete all your due diligence beforehand. Here are some of our top tips for winning at auction.

• Know your budget
  Before you get to the auction, decide on your limit and stick to it.
• Don’t bid in round numbers
  Having a hard limit set at a round number such as one million can mean you miss out if it goes a smidge over. Set your limit to an uneven number. This can give you a better chance at winning and can be unnerving for other bidders in the room.
• Choose a good spot
  Your position in the room can make a difference so make the most of it! A spot at the back or on the sides of the room will give you a good view of who you are up against and you can also gauge their facial expressions.
• Be confident
  Auctions can be scary but start bidding confidently and don’t lose your nerve. This shows buyers that you mean business and can even deter others from bidding.

A deadline sale occurs when a seller places a set date that offers must be made by. The seller can still accept an offer at any time before this point, which is usually signalled by having “unless sold prior” on the listing.

The deadline sale process is pretty straightforward but be prepared because things can move pretty quick. When you first decide that you want to make an offer on a property with a deadline sale, let the real estate agent know immediately so the vendor doesn’t accept another offer in the meantime. Then, ask your lawyer to draft your sale and purchase agreement. As outlined above, this can be a conditional or unconditional offer. Once complete, this is passed on to the vendor who can either accept, decline, negotiate, or hold on to the offer until the deadline is met. Things have just got real!

Making an offer on a property with a deadline sale is a balancing act. You don’t want to rush into making an offer on a house you aren’t 100% sure about yet, but holding off too long may mean someone else snaps it up. Our top deadline sale tip is to tell the agent you’re keen ASAP and then carry out your due diligence as quickly as possible.

The process of buying a house by tender is similar to a deadline sale, in that the vendor sets a date when offers must be made by. However, vendors selling by tender usually wait until this date to consider all offers before making a decision, rather than being able to accept at any time.

As a buyer, this gives you more time to think about the property and have your sale and purchase agreement drafted by your lawyer. Offers can be either conditional or unconditional, and although you should definitely include the clauses you require, try not to get carried away with too many conditions. With houses for sale by tender, there is not usually a chance to negotiate, so you want to put your best foot forward and make your offer as attractive to the vendor as possible.