Buying property?
FAQ and Helpful Tips
Open communication
Imagine the agent as your trusted friend and resource for information and support. Their goal is to bring about a mutually beneficial agreement between the vendor and purchaser, where both parties are satisfied.
Be transparent with the agent and don’t hold back too much information. They are not trying to exploit you – in fact, they are bound by law to treat both parties 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 any way they can.
Please refrain from asking the agent for a price estimate for an auction or tender listing
The agent cannot disclose the vendor’s confidential reserve price or provide any information that may be misleading. This can create confusion and hinder clear communication.
Keep in mind that the vendor’s price expectations can change throughout the marketing process, influenced by factors such as buyer feedback and auction bidding. This dynamic process can be frustrating for buyers who invest time in inspections and attending auctions.
Instead of relying on agent price estimates, it’s more effective to research local prices and form your own opinion on a reasonable offer.
For ‘sale by tender,’ it is straightforward 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.
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
It’s a common mistake for buyers to become emotionally attached to properties that are likely to sell beyond their budget.
Our advice is to thoroughly research local prices and prioritize properties that have a realistic chance of selling within your budget. By doing this, you increase your chances of success.
Building inspection
Building inspections can be costly, but they are worth the investment as they provide valuable information about the property you are considering purchasing.
I’ve observed that some building inspection reports can be written in a way that makes them appear more concerning than others. This can lead to confusion and undue alarm. To avoid this, I suggest speaking with your building inspector to gain a comprehensive understanding of the issues identified in the report, rather than making quick assumptions.
It’s important to keep in mind that even brand-new properties will have some minor issues identified in the inspection report. Be prepared for this and use the information to make informed decisions.
Freehold / Cross-lease / Unit title
Freehold properties tend to be pricier than properties with other forms of ownership as they offer the greatest rights and have fewer restrictions. But what this means is that you may well be able to get a much nicer house if you buy a cross-leased property compared to a freehold one. Consider your priorities and what you are willing to sacrifice when making your decision.
Unit title ownership is not a common form of ownership on the North Shore, but it may be encountered occasionally. This type of ownership involves participation in body corporate meetings, such as an annual general meeting, as well as restrictions similar to those of cross-lease properties.
If you are planning to have pets, be sure to check the cross-lease agreement and the body corporate rules to determine if you’re allowed to keep them. Usually, the requirement is that your pets “must not disturb the peaceful enjoyment of the property by other co-owners”.
You are not buying this place forever
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. To make your search easier, write a list of your priorities, including “must-have” and “nice-to-have” features, and work from there. This will help you focus on what’s most important.
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 $30,000 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 haggled 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? 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” and buying NOTHING.
Buy, hold, and then move on to your next property.
A very nice house
Sometimes, when a house is very attractive and open homes are crowded, people don’t attend the auction because they think there will be too much competition. And then no one comes. My advice is to attend the auction anyway!
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, I would recommend against private viewings and suggest visiting open homes instead, just like everyone else.
Open home etiquette
-
- It’s better wear slip on shoes without shoelaces as they are easier to remove.
- Do not bring coffee cups, you might accidentally spill it on the carpet.
- Do not drive your car down the driveway as there may not be room. Navigating driveways and turning around takes time to get used to. Avoid scratching your car and damaging other people’s property.
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 sellers off and make negotiation more challenging.
Negotiation
Practically, it is the same as a sale by asking price. Before making your offer in writing, discuss the expected price with the agent.
Deadline sale
This method is similar to the “For Sale by Negotiation” approach. You have the flexibility to make an offer at any time before the deadline, or even on the deadline itself. Your offer can include conditions as per your requirements.
Multi-offer
A multi-offer situation occurs when there are multiple written offers on a property at the same time. 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.
Tender
The tender campaign lasts for three to four weekends of open homes, after which the vendors will consider all offers submitted by the designated due date. Offers may include conditions. The agent will prepare for you the Particulars and Conditions of Sale of Real Estate by Tender agreement, on which the offer must be written.
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 facilitate a mutually beneficial 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.
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. - Solicitor approval – REINZ standard clause:
This Agreement is subject to the approval of the Purchaser’s solicitor by 5.00pm on the [ ] working day after the date of the Agreement. Such approval shall be limited only to aspects of conveyancing, town planning and other legal matters and shall not extend to approval of the purchase price or any commercial term or aspect or to any of the standard General Terms of Sale herein. The Purchaser’s solicitor may only disapprove in good faith and if so the reasons for disapproval must be given.If this condition is not fulfilled by the date for fulfilment, the provisions of General Term 9.10(5) shall apply. This condition is inserted for the sole benefit of the Purchaser. - 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.
Auction
All auction participants openly and unconditionally bid on the date designated by the vendor. It is possible to make an unconditional pre-auction offer. If this type of offer is accepted, the auction will be moved forward to allow for other bidders to participate. The deposit can be paid either when the pre-auction offer is accepted or at the auction, depending on mutual agreement.
All offers must be written on the provided by the agent sale agreement called Particulars and Conditions Of Sale Of Real Estate By Auction.
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
Building inspectors:
Nick Stead
021 478947 | info@citylineir.co.nz | http://citylineir.co.nz
Scott Findlay
021 456 692 | scott@kiwiinspections.co.nz | https://www.kiwiinspections.co.nz
Bob Hodges
021 284 1728 | bob.hodges@xtra.co.nz | https://www.aucklandhomecheck.co.nz
Local solicitors:
Harold Kidd / Harold Kidd Law
416 Glenfield Road, Glenfield
443 7433 | harold@hklaw.co.nz | https://hklaw.co.nz
Lois Black / Glenfield Legal Limited
2B William Pickering Drive, Rosedale
942 4915, 027 643 9040 | lois@glenfieldlegal.co.nz | https://glenfieldlegal.co.nz
Fin Meadows-Flower / Donnell Sherry
Level 1/18 Link Drive, Wairau Valley
442 2775 | fin.meadows-flower@donnellsherry.co.nz | https://www.donnellsherry.co.nz
* Please note those businesses are not related to Barfoot & Thompson and so we cannot guarantee their workmanship and therefore encourage you to do your own research to your satisfaction.
Private conversation
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!
|
|
|
|
 Harry Zang BCom 021 321 622 h.zhang@barfoot.co.nz click here |
