Buying property?

FAQ and Helpful Tips

Table of contents

1. Welcome to My Open Home! This section offers a warm welcome and explains that the guide is designed to help first-time buyers feel confident and prepared during their property search. It also encourages you to clearly define what you’re looking for before you start.
2. Open Home Etiquette This part provides simple tips to help you make a great impression and get the most out of your visit. It also encourages you to be a “detective” by asking questions and looking beyond the aesthetics, while also trusting your gut feeling about the property.
3. The Big Questions: A Quick Guide This section addresses common questions and concerns that first-time buyers often have, covering key topics such as:
   – On Pricing: We know this can be frustrating, but we can’t give a specific price, especially for auctions or tenders. Instead, we’ll help you understand the market so you can make an informed decision based on comparable sales.
   – On Affordability: The golden rule is to buy what you can afford, not just what you love. Focusing on realistic options will increase your chances of success and help you find the right home.
   – On Ownership: This section explains the different types of ownership, Freehold, Cross-lease, and Unit Title, so you know exactly what you’re buying and what each type entails.
   – On Neighborhoods: Don’t just drive by; get out and explore the area. Talk to people who live there and visit on a Friday or Saturday night to get a real feel for the community’s vibe.
4. Understanding the Selling Methods This section is designed to demystify the different ways homes are sold in New Zealand. It explains the processes for auctions and tenders, detailing what you need to know and how you should prepare to participate in each one.
5. Sample forms and more

 

Welcome to my open home!

Welcome! Embarking on the journey of buying a home is an incredibly exciting step, and it’s completely normal to feel a little overwhelmed. This guide is designed to help you feel confident and prepared. Our goal is to make the process as simple and enjoyable as possible for you.
I’m personally very excited to be involved in your home buying process. I hope this guide provides you with valuable help, and I’m keen to assist with any questions you may have. Please don’t hesitate to get in touch if you are unsure about anything. I’m here to help.

Open home etiquette

Open homes can be busy, so these simple tips will help you make a great impression and get the most out of your visit.

• Remember, you’re in someone’s home, so be respectful and mindful.
• It’s better to wear slip-on shoes without laces, as they are easier to remove.
• Do not bring coffee cups; you might accidentally spill one on the carpet.
• Do not drive your car down the driveway. There may be limited room, and navigating a new driveway and turning around can be tricky. It’s best to park on the street to avoid scratching your car or damaging other people’ property. This also brings up the “two-week rule”: From my experience, a long or winding driveway can feel difficult at first. However, it will likely become second nature within a couple of weeks.
• Don’t be afraid to be a detective! Ask lots of questions. Don’t feel ashamed to ask what you might think are ‘silly questions.’ They can often be very important ones.
• While it’s crucial to do a logical check, don’t forget to listen to your gut. Take a moment to stand still and simply feel the home. Imagine yourself living there, would you be happy? Does the space feel right for you?
• Take photos and videos (with permission), you might forget details after multiple homes.
• Check storage and hidden spaces, cupboards, laundry, roof cavity, etc
• There is usually a small door to allow access under the house. We advise you to safely observe from the entrance only to check for visible insulation and signs of moisture. The comprehensive inspection of this area should be left to your building inspector.

Open Communication

The agent is here to help. Think of them as a trusted friend, guiding you through the process. Their goal is to bring about a mutually beneficial agreement between the vendor and purchaser, where both parties are satisfied.

Be reasonably transparent with the agent and don’t hold back too much information. Your agent is legally bound to treat both vendors and buyers fairly. While the agent is paid by the vendor, they can only successfully close the sale when both parties reach a fair and acceptable agreement.

Remember, the agent is here to assist you in every way they can.

Your home search approach – my suggestion

When you start looking at properties online or in person, take a moment to get crystal clear on what you’re actually looking for. Knowing the difference between your absolute must-haves, your nice-to-haves, and the things you can live without will save you a lot of time and emotional energy.

This simple exercise helps you filter out properties that won’t work and prevents you from falling in love with a home that doesn’t meet your core needs.

• Must-Haves: These are your non-negotiables, the things a home absolutely must have for you to even consider it. Without these features, the home is not the right fit.
  – Examples: 3 bedrooms, an internal garage, a fenced backyard for your dog, or a specific school zone.
• Nice-to-Haves: These are the features that would make you really happy, but you’re willing to compromise on them. Think of them as the cherry on top.
  – Examples: An ensuite bathroom, a modern kitchen, a deck for entertaining, or an extra car park.
• Can Live Without It: These are the things you thought you wanted, but you’ve realized you can either add them later or do without them altogether. Being clear on this helps you focus on what’s truly important.
  – Examples: A swimming pool, a fireplace, brand-new appliances, or a large front yard.

The Three Stages of Buying Your First Home

When you start your property search, you likely have an “ideal” home in mind. But from experience, first-time home buyers go through three very distinct stages before they find their home. For those who’ve done it before, the process is more familiar, but for first-timers, this journey is a vital part of the education.

• Stage 1: The Naivete Stage. You enter the market with expectations that are often a little unrealistic. This is the discovery stage, where you learn what’s actually available on the market and what you can get for your budget.
• Stage 2: The Realization Stage. This is when reality sets in. You realize that what you can afford is very different from what you would ideally like to have. This can feel like a disappointment stage, as you begin to understand the compromises you may have to make.
• Stage 3: The Maturity and Acceptance Stage. After a long search and a few unsuccessful offers, you finally come to terms with what’s available and what you can truly afford. You make an offer on a house that ticks off the most important boxes, even if it has a few undesirable features. And then, your offer is accepted!

Congratulations, you have officially joined the ranks of homeowners. The next time you buy a house, the process will be much easier because of all the experience you’ve gained on this journey.

How much are the vendors looking for?

Why Agents Can’t Give a Price during Tender and Auction campaigns
The primary reason is that an agent is legally obligated to protect the vendor’s confidential reserve price and to not provide misleading information. If an agent were to suggest a price, it could create confusion and disappointment for both buyers and sellers.
For example, a buyer might dismiss a property based on a high-end estimate, only to find out later it sold for less. Conversely, a buyer might miss out on a property they love by offering only a low-end estimate, not realizing the final sale price was justified by the market.
Ultimately, a property’s price is dynamic and can shift based on market feedback and bidding.

Your Best Approach

Instead of relying on an agent’s guess, the most effective approach is to research recent local sales yourself to determine what feels like a fair price for the property. This empowers you to make a confident and informed offer.
For a sale by tender, it’s a straightforward process. Submitting an offer is free, and you can include your own conditions, such as finance, LIM, and building inspection. If your offer is selected, you will have time to satisfy these conditions.

Research local prices from a reliable source

There are several websites available for you to research recent sales results in the area.
For example:

• • homes.co.nz  – Enter the suburb, click on the sold button in the top left corner.
  • oneroof.co.nz – Tools, Find a sold property, enter the suburb
  • realestate.co.nz – Click on Sold and enter the suburb

The key is to purchase what you can afford, rather than what you have fallen in love with

The golden rule of property hunting is to focus on what you can afford, not just what you fall in love with.
It’s a common mistake to become emotionally attached to properties that are likely to sell beyond your budget. This can be heartbreaking when you miss out, and it can lead to months of searching for a “perfect” house you’ll never find. I’ve seen it happen.

To avoid this pitfall, I recommend you study local sales and prioritize properties that have a realistic chance of selling within your budget. You can check websites like homes.co.nz, oneroof.co.nz, or realestate.co.nz to help with this.

By focusing on realistic options, you’ll increase your chances of success and find a home that’s perfect for you.

Welcome to my open home!

Many first-time home buyers approach property purchases as if they’re going to live there forever, which can make the buying process difficult.

However, when you consider that you may only live in the house for five to seven years before moving on, it can make the decision easier.

You no longer need to worry about if a concrete driveway will deteriorate in 50 years.

Instead, focus on if the house meets your current needs and nothing more. Buy it, live in it, enjoy it, and then move on to your next chapter.

The house of your dreams

Unfortunately, you will never find a perfect fit for a house. Even with ten times more money to spend, there will always be some compromises to be made. So, to make your search easier, I recommend writing a list of priorities. Break it down into “must-have” features and “nice-to-have” features. This will help you focus on what’s truly important and make the process less overwhelming.

A sad story

I recall a friendly young couple who attended several of my open homes. They would always observe, but never made a purchase. They were searching for a “perfect house.”
It was disheartening to see them return to open homes many months later, still searching. Unfortunately, by that time, house prices in the neighborhood had risen by 20% or more, making their search even more challenging.
Avoid making the same mistake they did.

Buy, hold, move on

One of the common challenges when buying property is that buyers are afraid of “overspending.”

Who wants to pay $10,000 over what they believe to be a fair price for a house? However, from my personal experience, when we were trying to buy our current house, we bargained with the vendors over $10,000 for quite some time. In hindsight, it was silly.

Fortunately, we eventually gave in, pushed ourselves beyond our comfort zone, and paid the asking price of $560,000. It turned out to be one of the best decisions we ever made. It allowed us to live in a convenient location and a comfortable house, which has given us a desirable lifestyle for years.

Now that our property is worth over $1 million, do we care that we paid $560,000 or $550,000? Not at all. Looking back, even if we had paid $600,000, it would still have been a great purchase.

From my experience, I would rather “spend too much” or “overpay” to buy SOMETHING rather than paying a “fair price” or below and buying NOTHING. Buy, hold, and then move on to your next property.

A very nice house

I’ve observed this phenomenon several times.

When a house is really attractive, and open homes are crowded, some buyers back off. They assume there’ll be too much competition.

So they skip the auction or avoid making a tender offer altogether.

And then… sometimes no one turns up at the auction, or no offers come in by the tender deadline!

My advice?
If you like the house, always attend the auction or make a tender offer anyway.

You never know what might happen, this could be your lucky day!

Visualize and Manifest the home that’s right for you.

Buying a home is as much an emotional decision as it is a financial one. Taking time to imagine the kind of home and lifestyle you want can help guide your search and keep you focused on what truly matters.

Define Your Priorities
Think carefully about the features that are most important to you—such as natural light, storage, outdoor space, or proximity to schools and transport. Creating a clear picture of your priorities will make decision-making easier.

Picture Yourself Living There
When you walk through a property, take a moment to imagine daily life. Can you see yourself cooking in the kitchen, relaxing in the lounge, or entertaining friends in the backyard? This exercise can help you quickly gauge whether the home feels right.

Stay Positive and Patient
The process can sometimes feel long, but staying positive will help you keep perspective. Focus on what you have already achieved in your search and be patient as the right home comes along.

Take Practical Steps
Balance your vision with action: attend open homes, research neighborhoods, ask questions, and involve trusted advisors. Combining clear goals with consistent action is the best way to bring your dream home within reach.

Neighbourhood considerations

If the neighbourhood’s vibe is important to you, you’ve got to go check it out for yourself.
Don’t just drive through

• Get out of the car and walk around.
• Talk to people who live there and get their take on the area.
• Make a point to visit on a Friday or Saturday night to see what the neighbours are like. Do they throw parties, or is it quiet? The only way to know is to see it with your own eyes and ears.
• Check for public transport nearby.

Go to open homes if you want to buy

In my extensive experience in real estate, very few individuals who have requested private viewings have actually gone on to make a purchase.

It is likely that individuals who request private viewings are still in the early stages of their property search and are not yet ready to make a commitment.

Moreover, as social beings, we often seek social validation before making big decisions such as buying a property. Attending open homes provides an opportunity to see other people’s interest and positive reaction to the property.

If you are serious about buying, perhaps avoid private viewings if possible and visit open homes instead.

What is a LIM? What are the Property files?

A Land Information Memorandum (LIM) is a report provided by the local council. It’s an official summary of all the information the council holds about a specific property and the land it sits on.
The purpose of a LIM is to give you a detailed picture of the property’s history and any known issues. It’s one of the most important documents in your due diligence process.

You’ll find information about:

• Any building consents and permits for work done on the property.
• Known natural hazards, like flood or erosion zones.
• Special conditions or requirements that apply to the land.
• Rates owing on the property.

What are Council Property Files?

Council Property Files (also known as a Property File or Council File) contain a broader set of information than a LIM. They are the physical and digital records of a property from the time it was first developed.

While a LIM is a summary, the Property File contains all the raw documents, including:

• The original blueprints and floor plans of the house.
• All correspondence between the council and the property’s owners over the years.
• All building consent applications and approvals.

The purpose of the Property File is to give you a complete historical record. It’s where you might find more detail about a building consent or discover a specific issue that isn’t highlighted in a LIM.

Bank pre-approval

Some buyers are not fully aware of how the pre-approval process works.
There are generally two stages of finance approval: a general (conditional) pre-approval and a specific (unconditional) pre-approval for a particular property.

A conditional pre-approval is indicative only. It does not guarantee that the bank will approve finance for every home up to the pre-approved amount. Each property is assessed on its own merits, including factors such as the number of bedrooms, type of title, and construction materials. Certain types of cladding, for example, may fall outside the scope of a conditional pre-approval.

If you’re planning to bid at an auction, where all offers must be unconditional, you should always obtain an unconditional pre-approval for that specific property. Your bank may require a building inspection report and possibly a registered valuation before granting this.

However, if you’re making an offer on a property listed for sale by negotiation, with a price, or by tender, you can (and should) include a finance condition. This typically gives you 10 working days to obtain unconditional finance approval from your bank.

Building inspection

Building inspections can be expensive, but honestly, they’re worth it. They give you valuable insights into the property you’re thinking of buying.

One thing to be aware of: some reports can sound more dramatic than they need to be. That can cause confusion or unnecessary worry.

The truth is, every house, even brand-new ones, will have something come up in the report. That’s totally expected. So don’t panic straight away.

My advice? Once you get the report, give your inspector a phone call. Talking it through will help you properly understand the issues, rather than jumping to conclusions based on how things are worded.
It’s all about making informed decisions and staying calm through the process.

I’ve seen some reports that were so over the top, in my opinion, it made me wonder, if that buyer keeps using the same inspector every time, will they ever actually buy a house?

And as one of my friends, an engineer once said: “You ask two engineers for an opinion, and you’ll get four different answers.” The point is, don’t get overwhelmed. Use the report as a tool, not as a reason to walk away too quickly.

Freehold / Cross-lease / Unit title – Understanding Property Ownership

When you’re buying a house, it’s important to understand the different types of ownership.

Freehold – Freehold ownership gives you the greatest rights and fewer restrictions. You own the land and the buildings on it outright. However, these properties tend to be more expensive.

Cross-lease – A cross-lease is another popular option. You might be able to afford a much nicer house with a cross-lease property compared to a freehold one. With a cross-lease, you and your neighbours collectively own the land, and you all grant each other a long-term lease (often 999 years) for the specific area where your house is located.

Selling: You can sell your house without your neighbours’ direct involvement.

Renovating: If you plan to make structural additions to your home, you will need to get your neighbours’ consent and have the title updated.

Land Use: Be sure to check the title document. Some cross-lease titles have ‘exclusive use areas’ around your house, while others have all the surrounding land designated as a ‘common area’.

Unit Title: Unit title ownership is less common on the North Shore. With this, you own a specific ‘unit’ and share ownership of the common areas with other owners. You will be part of a Body Corporate, which sets the rules for the complex and charges fees to maintain the shared areas. You will need to participate in Body Corporate meetings and follow a set of rules that are similar to cross-lease restrictions.

A Note on Pets: If you have pets or planning to have them, this is a crucial point to check. For both cross-lease and unit titles, you must review the legal agreements to see if pets are allowed. The general rule is that your pets are allowed as long as they don’t disturb the “peaceful enjoyment of the property by other co-owners.”

Insurance: If you buy a Cross-lease or Unit Title property it will be much better if you insure your house with the same company as your neighbours.

What to look for

• Unconsented works, conversion of garages to bedrooms, extra bathrooms and toilets…
• Natural hazards or special conditions noted by the council.
• Problematic cladding type
• Quest plumbing piping
• Asbestos
• Neighbours consents to alterations for cross-lease properties
• Defective titles for cross lease properties – Flats plan outlines – attached and enclosed

Your Open Home Notes Template

It’s easy to get excited and forget the details once you’ve seen a few properties. This page is designed to help you keep track of your thoughts and impressions so you can make a logical decision when emotions are running high.
Use this template to jot down notes as you go through each open home.
Property Snapshot

• Property Address: __________________________________
• Date of Visit: __________________________________
• What I Liked Most: (E.g., “The sunny deck,” “The modern kitchen,” “The huge backyard.”)
• What I Liked Least: (E.g., “The small bedrooms,” “The lack of storage,” “The noisy street.”)
• Must have ‘Logical’ features: Is there everything we need to have?
• My ‘Emotional Test’ Rating: (1-5 stars, where 5 is “This feels like home.”)
• Can we afford it: Is it within our price range?
• Next step: (E.g., “A second visit?”, “Is the council consent for the deck?,” “What is the cladding made of? Any special interests on the title?”)

Your Next Steps

If this property feels like a good fit, here’s what to do next:

• Talk to the agent. Make sure you’ve signed in and given them your contact information. This is the only way they can send you the full information pack for the property, including a LIM report and title.
• Do a second viewing. Go back and look at the property a second time. This allows you to focus on the details you missed the first time and confirm if it’s really the one. You can bring your support team, your relatives and friends, with you this time.
• Contact your lawyer and mortgage broker. Get the paperwork reviewed immediately. Having this done early will save you time and stress, and you’ll be ready to act when the time comes.
• Research the neighborhood. Go back to the area on a different day or at a different time to get a better feel for it. Look at local shops, parks, public transport, schools and amenities.
• Discuss with your support people. Talking to your family or trusted friends about the property can provide a fresh perspective. However, be aware that they’ll be very protective of you and might point out a lot of cons. Try to concentrate on the pros as well.

We’re here to guide you through the buying process, from making an offer to celebrating with you on settlement day. Contact me straight away if you are unsure and need a piece of advice or clarification.

Different ways of selling & buying property

There are 5 common ways the property can be sold in NZ.

• Asking price
• Negotiation
• Deadline sale
• Auction
• Tender

Asking  Price

You have the option to make an offer anytime, whether it’s conditional or unconditional. It’s important to discuss with the agent to find a way to make your offer more appealing, while still being within your budget. Money isn’t the only factor to consider – settlement dates, finance, building inspections, and a LIM report are also important considerations.

Avoid making your first offer too low. A slightly lower offer is one thing, but an unreasonably low price may immediately put the vendors off and make negotiation more challenging for you.

Multi-offer

A multi-offer situation occurs when there are multiple written offers on a property at the same time. More than one. All prospective buyers are provided with a form acknowledging that they are aware they are competing with other buyers and are encouraged to present their best offer in writing as they may not get another chance to negotiate with the vendor if another offer is accepted.

The multi-offer process is managed by a branch manager.

Deadline sale

This method is similar to the “For Sale by Negotiation” approach. You have the flexibility to make an offer on the deadline or at any time before the deadline. Your offer can include conditions as per your requirements.

Pre-tender date offer

A pre-tender date offer is an offer made on a property before the scheduled tender closing date. It must be an unconditional offer. If your offer is deemed acceptable, the tender closing will be brought forward to 12 pm on the third working date from the date when your offer was communicated to the vendors. The tender will be run as a multi-offer.

Why buy by Tender

It is very easy to make an offer you believe is fair for the property. Submitting a tender offer is free, and you can include your conditions, such as finance, LIM, and building inspection. If your offer is selected, you’ll have time to satisfy these conditions.

Making offers for Tender, Asking price, Negotiation

When making an offer, it’s best to openly communicate your intentions with the agent. The agent’s goal is to act fairly towards both buyers and vendors and help both parties reach a fair and acceptable agreement. Avoid making excessively low offers as this can offend the vendor and make it difficult to purchase their property. Vendors are individuals just like you, so be respectful and considerate of their feelings.

For your own benefit, it’s best to act reasonably with the vendors. They want you to purchase their home and a fair offer near the asking price is more likely to lead to a successful agreement. Ask the agent to convey your genuine interest in the property and how much you love it and will care for it. This is a more appealing message to the vendors, compared to pointing out the negatives of their beloved home. By working together and approaching negotiations in a collaborative manner, a fair agreement can be reached.

Please note that when you make a tender offer you cannot withdraw it for 5 working days.

Four offers

Having handled numerous tenders, it’s interesting to see a consistent pattern in the offers we receive. We’ll often get four offers: two that are close in price but are lower than what’s needed, and two others that are also close to each other but are much higher—and spot-on with the right price. The lower offers likely come from inexperienced buyers who are still new to the process and are afraid to offer the full price. The two higher offers come from seasoned buyers who have learned from experience and are ready to pay the right price to secure the property. This pattern highlights why a tender is an effective method for attracting serious buyers.

From a purchaser’s point of view, it costs nothing to make a conditional offer on a property. If your offer is accepted, you will then have a specified amount of time to satisfy your conditions, such as securing finance or completing a building inspection. This makes it a worthwhile strategy to try. Good luck!

PS. If you want to buy a particular property rather than just try, it’s better to be in the “full price” category and not in the “afraid to offer the full price” category.

Common clauses for Sale & Purchase Agreements

Please note that the Particulars & Conditions of Sale by Auction (S&P Agreement for auctions) do not allow for conditions to be inserted for the benefit of the buyer. However, the following conditions are applicable when buying by negotiation, price, or tender (deadline sale):

• Building inspection condition – Building inspection condition: This is a general term that can be included or excluded when making an offer. The standard time for this condition in the general terms is set at 15 working days, but it is typically amended by buyers to 7-10 working days.
• LIM condition – Same as the building inspection condition.
• Finance condition – This is a general term that can be included or excluded when making an offer. Buyers typically ask for 7-10 working days.
• Due diligence – REINZ standard clause:
  This agreement is conditional upon the purchaser being satisfied with the results of a due diligence investigation of the property and the purchaser’s intended development of it by 5pm on [Insert Date].
  If the purchaser is dissatisfied with any aspect of this investigation the purchaser may at the purchaser’s absolute discretion by notice in writing terminate this agreement and in such case any deposit paid must immediately be refunded in full. This clause is inserted for the sole benefit of the purchaser and the purchaser is under no obligation whatsoever to supply any reasons for the purchaser’s dissatisfaction with any aspect of the investigation.The vendor undertakes and agrees to:
  a) allow the purchaser together with consultants employed by the purchaser full access to the property for the purposes of the due diligence investigation; and
  b) provide to the purchaser any information held relating to the property relevant to the due diligence investigation.
• Sale of the Purchaser’s Property – REINZ standard clause:
  This agreement is conditional upon the purchaser obtaining an unconditional agreement for the sale of the purchaser’s property situated at [Insert Address] for [$ ] or such lesser amount as the purchaser accepts on terms and conditions acceptable to the purchaser by [insert date] . This condition is inserted for the sole benefit of the purchaser.

Due Diligence Condition – Pros and Cons Explained

Sometimes I receive emails similar to the one below:

Hi Andre, Would it be possible to include 15 working days due diligence, solicitor approval, finance, LIM, building report conditions ? Cheers Matthew

My usual answer to that question:

Hi Matthew,

It is certainly possible, we can do it, however I would advise against including a due diligence clause in your offer. Also, if you have that condition you do not need to include any other conditions because this condition covers everything.

Due diligence is a “walk away for any or no reason” condition. It allows you to cancel the agreement without providing any reason, even if you simply change your mind. Because of this, vendors dislike it, as it signals a low commitment on your part. This clause offers you maximum protection, though it can reduce the appeal of your offer to the vendors.

Instead of one due diligence clause, I recommend including specific conditions that you genuinely need, such as:

• Solicitor approval
• Finance approval
• LIM report
• Building report

Also, 15 working days is usually too long for these conditions. 10 working days should be enough to complete your checks and satisfy your finance condition.

So, I suggest you offer 10 working days to satisfy those four specific conditions. How do you feel about that approach?

Auction

Buying at Auction

An auction is a public bidding process where potential buyers compete to purchase a property.

Before the auction, the vendor sets a reserve price, the minimum amount they are willing to sell for.
Please note: the reserve price is confidential, and agents are not permitted to disclose it.

Buying at auction is unconditional, meaning you must complete all due diligence before auction day. This includes arranging a building inspection and securing unconditional finance approval from your bank for this specific property.

During the auction, the auctioneer works to reach or exceed the reserve price. Once the reserve is met, the property is considered on the market. Bidding continues until the highest bid is reached, and the auctioneer brings the hammer down.

At that point, the highest bidder becomes the buyer, and the sale is legally binding. The buyer must immediately sign the agreement and pay the deposit.

What if the reserve isn’t met?
The property will be passed in (unsold), and we then move to a different method of sale, usually for sale by negotiation or asking price, and continue marketing the property until it sells.

Pre-auction offer

A pre-auction offer is an offer made on a property before the scheduled auction date. If your offer is deemed acceptable, the auction will be brought forward and held on the third working day after the offer was communicated to the vendors. Typically, early auctions are held at around 4 PM in the Glenfield office.

Your accepted offer will become the reserve price and your opening bid at the auction. The auctioneer will then ask for further bids from any other buyers present. All pre-auction offers must be unconditional and require a deposit to be paid either when the offer is accepted by the vendors or straight after the auction. Purchasers and Vendors can negotiate which option to choose.

The reason for making a pre-auction offer could be that you are highly motivated to purchase the property and want to reduce competition by shortening the marketing period or you want to determine if the price you have in mind is acceptable to the vendors.

Why buy at auction – Good Reason 1

Some buyers consider participating in an auction to be a bad idea, as they fear overpaying for a property. However, I disagree. In my opinion, buying at auction makes a lot of sense.

As human beings, we are social creatures, and we seek validation. Additionally, we need reference points. When trying to determine the appropriate price for a property advertised for sale by negotiation or with an asking price, we often consider the lowest price that feels comfortable to us. However, this can be misleading, as it is typically too low and not enough to secure the property.

Auction provides us with a valuable opportunity to see other buyers who are willing to pay a closer-to-realistic price, even if it is higher and less comfortable. This social proof gives us confidence and encourages us to pay the fair market value, which is often higher than our comfortable price but is the amount required to finally become homeowners.

Furthermore, there is less competition at the auction compared to after the auction. This is because at the auction, you are only competing with cash buyers, while conditional buyers wait for the property to pass in.

In conclusion, I believe bidding at an auction is a great opportunity to secure a property. It’s important to note that at Barfoot & Thompson auctions, there are no vendor bids – all bids are genuine from buyers only.

Why buy at auction – Good Reason 2

It can be a costly mistake for a buyer to remain silent and not express interest at the auction, waiting for the property to pass in. Some buyers believe that if the property doesn’t sell, they can make a low offer and secure a good deal. However, this outcome is highly unlikely, and I have never seen it occur in my real estate career.

These buyers fail to realize that they may be in a multi-offer situation after the auction, with several other buyers making offers at the same time. In such cases, we run the process as a tender. In this scenario, you would be competing with other buyers without knowing their offers, which could result in either greatly overpaying or missing out by a small margin – both of which are disappointing outcomes.

However, at the auction, you can clearly see what other buyers are willing to pay, and make an informed decision accordingly.

Variations to the Terms of Sale by Auction

If you are interested in purchasing a property that is for sale by auction and require a different settlement date or deposit amount, you can submit a variation form. This form needs to be approved by the vendors prior to the auction, provided they agree to your request. For further information, contact the agent.

Phone bidding

“Phone bidding is a common option for buyers who cannot attend the auction in person. In such cases, an agent can represent the buyer during the auction while communicating with them over the phone. However, it is important to note that all phone bidding requests must be approved.

Online bidding

We allow and welcome online bidding, but buyers must be pre-approved by their agents. To participate in online bidding, buyers must submit a photo of their passport or driver’s license as proof of identity, along with proof of address for verification purposes.

Bidding at auction

Preparation:

• Attend several auctions just to observe. You can visit the physical auction room or watch it online. More information can be found on our website: https://www.barfoot.co.nz/auctions.
• Conduct thorough research and due diligence before the auction. Remember that when bidding, it must be an unconditional offer.
• Register your interest by informing the agent before raising your hand at the auction. There will usually be papers for you to sign to be able to bid, and the agent will be able to assist you.
• It may be possible to modify the settlement date or deposit amount, so check with the agent before the auction.
• Familiarise yourself with local sales and determine the real price range.
• Determine your “happy” and “grumpy” prices. It’s more likely that your “grumpy” price will be the only way to secure the property.
• Have the deposit money ready to be transferred immediately after winning the auction.

On auction day:

• Arrive at the auction early and consider bringing a support team.
• Make sure you are in a position where the auctioneer can easily see and hear you.
• Take the lead by making a confident opening bid when the auctioneer calls.
• Quickly and decisively respond with your next bid if another buyer makes a counter bid.
• Avoid bidding in round numbers, as bidding $1,010,000 may be more successful than bidding $1,000,000.
• Try to bid higher than what the auctioneer has asked for.
• Don’t be the first one to make a lower bid (for example, if bidding is going up in $10,000 increments, don’t be the first to offer $2,000 increments).
• If you reach your maximum budget, it’s best to stop bidding.

After the auction:

• If the property is passed in and you are still interested, all is not lost! Talk to the agent about a conditional offer.
• If you win, sign the agreement, and pay the deposit.
• The agent will forward the agreement to your solicitors.
• Book the movers and wait for the pre-settlement inspection and the settlement.

Enjoy your new home! When it’s time to move on, contact us to assist with the successful sale of your property and finding a new one.

Deposit

The deposit is typically due on the date your offer is accepted by the vendors or when it becomes unconditional, as agreed upon in the sale and purchase agreement. This deposit will be paid into our trust account.

Solicitor

Having a reliable solicitor is essential during the home buying process. Communication with them should be a priority, and all relevant documents should be forwarded to them for review. Seek their advice and guidance throughout the process.

When choosing a solicitor, cost should be a factor to consider, opt for one who offers a fixed price for the transaction instead of a variable one where you’re charged for every phone call and email. This way, you won’t hesitate to reach out to them for timely, valuable advice.

From my experience, local boutique conveyancing solicitors are often more preferable to large corporate firms in downtown areas. This is your call, of course. Let me know if you need a referral.

Pre-settlement inspection

The purpose of the pre-settlement inspection is to confirm that the house is in the same condition as it was when the agreement was signed. It’s not the time to look for reasons to request a discount. So, it’s important to conduct thorough due diligence investigation before you sign the agreement, not during the final inspection.

The property should be free of any rubbish or items left behind, unless it has been agreed upon with the vendors at the time the agreement was signed. It is recommended to include a clause in the agreement to clarify this. Additionally, all items listed on the chattels list should be in reasonable working order.

 Settlement

This is the day when the vendors are required to vacate the property, and you officially become the owner. A formal process is involved. The funds are transferred from your bank to the vendor’s solicitor’s trust account, and the conveyancing documents are finalised by the solicitors.

We will provide you with the keys to your new home once both solicitors officially confirm that the property has settled. This is when we will send you a text asking you to collect the keys. Exciting!

Helpful Contacts

You can find a list of local professionals including local solicitors and building inspectors on this page of my website:
https://www.volkov.co.nz/local-professionals/

Questions? Unsure? – Contact me now.

I am excited at the opportunity to help you buy or sell right. I believe I have the knowledge and I am willing to share it with you at no charge.

Feel free to contact me for a chat whatever your situation is. I look forward to being of service to you.

Kind regards
Andre Volkov 027 243 6007 | a.volkov@barfoot.co.nz

Sample Forms

 

Questions? We look forward to hearing from you! Andre Volkov BCom, BEng 027 243 6007 a.volkov@barfoot.co.nz click here Lily Wang 021 046 2696 l.wang3@barfoot.co.nz click here