There are a number of different ways to buy your new home – by auction, negotiation or tender for example. Whatever you choose, it's worth knowing how each of these sale and purchase methods work. Here’s a quick guide that may help. It’s just a starting point so please get advice from the appropriate professionals before taking the next step.
Usually this involves making an offer on a sale and purchase agreement, and then negotiating through the real estate agent acting for the seller, until a price is agreed.
The great thing about the offer and negotiation method is that you can make your offer subject to conditions. This is called a conditional offer. Typical conditions might be receiving a satisfactory builder’s report on the house, or satisfactory LIM report and/or organising finance.
A solicitor is the best person to advise you on the appropriate conditions to include for your circumstances, so please consult with them before signing any agreement.
In a private sale you negotiate directly with the seller to buy your new home – no real estate agents are involved. It pays to be cautious and consult your solicitor on every move you make, to ensure all parties are meeting their legal obligations.
When you’re buying directly from a seller, make sure you sign a standard Sale and Purchase Agreement, which outlines the obligations and responsibilities you both have. If the seller doesn’t have a sale and purchase agreement, your solicitor should be able to prepare one or you can purchase one from the Auckland District Law Society. Either way, you should always consult with your solicitor before signing anything. Find out more about sale and purchase agreements.
Remember, the real estate agent is working for the seller – they will try to negotiate the highest price possible.
Auctions are held at a specific time and place. To be a successful bidder you will need to outbid any other potential buyers without going above your price limit.
If you’re the successful bidder, your offer is unconditional so you have to buy the property. This means it's a good idea to have your finance in place. Typically you will need to pay a deposit (generally 10%) on auction day.
When buying at auction you'll need to do your homework beforehand. Here are just some of the things you should look to have sorted before auction day:
With a closed tender, anyone interested in a property has the opportunity to put in a written offer (the ‘tender’) by a certain date and time (the ‘deadline’). All tenders are then presented to the seller at the same time, on the deadline.
It’s then up to the seller to decide if they want to accept any of the tenders. They could reject all of them, or choose one or two tenders to negotiate with.
Here are some tips for buying through a tender:
When you buy a house and land package, you enter into a contract to build a house for a fixed price. This is also known as a turn-key contract.
You will typically have to pay a 10% deposit at the point of signing the contract and pay the balance at completion of the build process. This will depend on your agreement with the building company.
The agreement will normally require the house to be fully completed with code of compliance certificate issued and be ready for you to move into. Items right down to the clothesline and letterbox may need to be in place.
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