When you buy a house, there are many different ways that It may be advertised for sale. The vendor decides on which of the house sale options to use with advice from their real estate agent. Each one will mean a slightly different approach from you as a buyer.
Deadline sale, auction and by negotiation are the most common methods of selling property in New Zealand.
In all methods, apart from during an auction, buyers can make either conditional or unconditional offers on a sale and purchase agreement. You and the vendor can then negotiate through the agent. In an auction, the buyer who places the highest bid above your reserve price wins the auction and must complete the sale.
Types of house sale options
In a deadline sale, the agent markets the property for several weeks with no sale price listed. Potential buyers are invited to make an offer that is confidential and kept in a sealed envelope. The vendor opens all the offer on the same day and decides which one they would like to accept. Some vendors choose to allow an earlier, which means they can open offers as they come in and potentially choose one before the deadline. The vendor does not have to accept the highest offer. In situations where there is more than one offer, they may also consider the attached conditions, such as how quickly they can move in or whether they are a cash buyer.
A deadline sale uses the standard sale and purchase agreement.
Tenders are similar to deadline sales but use their own special paperwork and cannot be sold prior to the tender date. Buyers are usually required to include a deposit with their tender.
An auction is a set date where everyone interested in buying a house gathers in one place for a sale. The property is sold to the highest bidder on the day once the reserve price (the minimum amount acceptable to the vendor) is reached. You can also make a pre-auction offer. If the vendor accepts this, the auction day bidding will start at the amount you have offered. Auction sales are immediately unconditional.
Some vendors choose an alternative house sale option and put an asking price on their property. These properties are usually advertised as “Buyer Enquiry Over”(BEO) or “Offers Over” at a certain price or with a price range. Some people opt for Price By Negotiation (PBN) with no price listed, but this is not always a successful sales technique. The listed price is the very minimum the vendor is expecting to sell for.
Whatever buying method you are looking at, an inspection of the property is a must before buying.
Whichever of the house sale options you are looking at, there are some things that you will always need to get in order.
These include getting the right professionals in place, including a lawyer and sorting your finances.
You will also need to arrange a pre-purchase house inspection of the property. A standard building inspection clause is usually included in the conditional agreement you sign after your offer has been accepted. In some situations, such as auctions, the purchase is immediately unconditional. If you want an inspection, you should arrange this with the vendors before the auction.
An inspection will give you a detailed assessment of the condition of the property inside and out. An experienced registered building inspector should carry out the inspection.
InnoHome carries out house inspections across Auckland. Contact us to book yours.