Searching for your ideal home can take time and patience. No matter how many open homes you attend, you will know when you have found the right place to call home.
After conducting essential checks, such as building inspections and LIM reports, you’re finally prepared to make an offer. This stage may feel a bit stressful, but it’s also incredibly exciting. To make the process as smooth as possible, having a clear understanding of the steps involved can boost your confidence and even enhance your bargaining power.
Let’s start from the very beginning to ensure you are well-prepared.
Prepare in advance
Buying a property doesn’t start at the open home. Being organised beforehand allows you to act swiftly when you find a property you love. This preparation is particularly crucial in a competitive market.
Obtain pre-approval
Before house hunting, understand your financial capacity. Inspecting properties beyond your budget is unproductive. Be realistic about how much you can borrow and repay comfortably. Consult with a mortgage broker or multiple banks to secure the best rate and a pre-approved home loan. Overextending your finances is not advisable, even if a lender offers a higher amount.
Having pre-approval strengthens your position when making an offer, showing vendors that you are financially prepared to proceed with the purchase. If you are a first home buyer, explore government schemes such as the KiwiSaver First-Home Withdrawal and the First-Home Grant to assist you in getting onto the property ladder sooner.
Consult a lawyer
Engaging a conveyancing lawyer can be highly beneficial. They help you navigate your rights and obligations, ensuring any issues with the agreement are mitigated from the outset. A lawyer can also assist in negotiating terms that suit you, such as specific clauses or conditions in the sale agreement.
Consider your conditions
Offers on a property can be conditional or unconditional. An unconditional offer means purchasing the property as it is, common in auction scenarios. A conditional offer allows for a ‘cooling-off’ period, contingent on factors like finance approval and property inspections.
Conduct necessary inspections
In New Zealand, building inspections and obtaining a LIM (Land Information Memorandum) report are crucial. These ensure the property complies with regulations and is free from major issues. For apartments, review the body corporate documents to check for any potential issues such as upcoming maintenance work or special levies.
Review the sale and purchase agreement
Before making an offer, thoroughly review the sale and purchase agreement. It outlines essential details such as the deposit amount, settlement date, and any inclusions. Ensure the conditions align with your requirements to avoid any surprises.
Key questions to ask
As a potential buyer, ask the following:
- What is the asking price, and why?
- Are there other offers on the table?
- How long has the property been on the market?
- Why is the vendor selling?
- Has the asking price changed during the campaign?
Understanding these aspects can influence your negotiation strategy.
Making an offer
After your research, and with a price in mind, start the negotiation process. Determine your financial limit and be mindful of additional costs like moving, legal fees, and any necessary renovations.
Ensure your initial offer is realistic. An excessively low offer might deter the vendor. Your real estate agent or lawyer can guide you on the best approach.
Prepare for some back-and-forth during negotiations. Confidence in the process can help, so consider the following tips:
Research: Understand that the asking price might be slightly lower than what the vendor hopes to achieve. Check recent sales of similar properties to gauge market expectations.
Stick to your budget: Don’t let emotions push you beyond your financial limits. If this property doesn’t work out, another suitable option will likely arise.
Make an early offer: An early offer can sometimes give you an edge, especially if it aligns with the vendor’s expectations and eliminates competition.
Key takeaways
- Complete due diligence, including finance pre-approval, property inspections, and consulting with a lawyer, before making an offer.
- Ask critical questions to understand the vendor’s motivations and the property’s history.
- Determine your financial limits, including all associated costs, before negotiating.
- Research comparable property sales to ensure your offer is competitive yet reasonable.
- Stay objective and avoid letting emotions influence your financial decisions.
Consult the experts
Buying or selling property doesn’t have to be daunting. With proper research and understanding of the process, negotiations can become an exciting step towards owning your dream home. Our team at Harveys is here to assist you, offering extensive market knowledge and experience to make your property journey as smooth as possible.
