Making an offer

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Many homes are sold through offer and negotiation, although auctions and tenders are often used in sought-after areas, in Auckland or if the home has special features (where it can be challenging for sellers to set what they feel is an accurate price).

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When you make an offer through your real estate agent, the seller may accept your offer straight away or there may be a negotiation process until both you and the seller are happy with the price and the conditions.

What’s good about this way to buy?

The big plus about buying by offer is that you can take time to think – and you can put in conditions that let you check the place out before you’re fully committed.

Common conditions added to an offer

  • Finance – this gives you time to arrange your loan. Make sure it says “finance on terms satisfactory to you” or you could be forced to borrow on terms you don’t like
  • Title search – so your lawyer can check there are no problems with the title, or restrictions, covenants or easements you need to know about
  • Valuation report – so you can check the market price. Your lender may also require a valuation report as part of the loan agreement
  • LIM report – so you can check what the council knows about the property and make sure there are no problems with things like consents or flooding
  • Building inspection report – so you can check the building is sound and find out about any problems that might cost money
  • Engineer’s report – so you can check any structural or land issues
  • Sale of another home – if you need to sell one home to buy another.

You might also want to add other conditions covering things like repairs the seller has said they’ll fix or extra items they’ve agreed to leave. Your conditions need to state that the report, finance or repairs must be satisfactory to you. Otherwise you’ll still have to go ahead even if you’re not happy with the results.

About your sale and purchase agreement

The sale and purchase agreement sets out in writing all the agreed terms and conditions of the purchase. It can vary, but most transactions will use a standard legal contract created by the Real Estate Institute and the Auckland District Law Society.

It will include

  • the agreed price,
  • list of chattels,
  • type of title,
  • list of conditions the buyer and seller want fulfilled,
  • date the agreement will become unconditional,
  • settlement date and
  • deposit the buyer must pay.

It also covers other things like responsibilities under various laws and what happens if settlement is late – and lets you set out obligations you want the seller to abide by (for example access to the property).

You’ll need to have it checked by your lawyer before you sign it – and each time any of the conditions change during negotiation. The agreement becomes binding once both you and the seller have signed it and initialled all the changes. You can stop negotiating at any time up until then.

Your lender will also need to see the sale and purchase agreement after the deal is done, but talk to them beforehand to check if they have any specific clauses they want added.

What if my offer is unconditional?

If you make an unconditional offer you need to sort out your loan and everything else beforehand because once the offer is accepted, you have to go through with the sale. If you break the contract you can be sued, so think carefully before going unconditional.

How the money is paid

Once everything’s agreed, you pay a deposit of 5-10% of the sale price to the agent. The agent pays the money to the seller when your offer becomes unconditional. Your lender pays the rest of the money to your lawyer on settlement day.



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This information is not intended as a complete guide, as it doesn’t consider your individual needs or financial situation. Trade Me accepts no responsibility or liability for any inaccuracies or omissions in the content. Always obtain independent legal advice before buying or selling property.