We are noticing substantial movement on the property market in the Eastern Bay of Plenty. Many of our clients are going to multiple offers. So what can you do as a purchaser to make sure that your offer has the best possible chance of winning the deal?
Purchase price – obviously purchase price is one of the most major considerations. But the offer does not always go to the highest bidder. It may go to a lower price if the conditions are more attractive to the Vendor.
Finance – an offer that has no finance clause is tempting to a Vendor as they know that the purchaser doesn’t have to get the approval of a lender to raise sufficient funds to purchase the property. If, however, you do require finance from a lender you can obtain pre-approval for your loan so that the offer you make can be a cash offer. You need to be aware though that the lender has the right to withdraw a loan approval if they don’t like the property that you are purchasing. For this reason if you are wanting to make a cash offer you should always get your lender to confirm they are happy with the property – preferably get this in writing.
Settlement date – this is the date the purchaser takes ownership of the property. A vendor may prefer an earlier settlement in order to move on or they may prefer a delayed settlement to find new accomodation. You need to ask the agent or the Vendor if there are some time considerations that you could offer that would be more favourable to the Vendor.
Building inspection – This is generally recommended to establish the soundness of the building. However an offer conditional on a Building report may be looked on less favourably than one without. You can always ask the Vendor if there is a Building report available that you could look at. If there isn’t you could make your offer subject to the Building report but put as short as possible time frame for that to be done.
Registered valuation – again this is recommended to show a fair market value on the property. But an offer with this on may seem to be weaker than one without that on. You could ask the Vendor if they have a valuation. Alternatively just getting this done in as short a possible time as possible could make your offer stronger.
Other conditions – Generally the fewer the conditions the stronger the offer is deemed to be. So doing as much homework as you can prior to making the offer can mean having to put in fewer conditions.
Due Diligence – One way to put in fewer conditions is to have the condition “Due Diligence”. This means that the Purchaser has a certain amount of time to satisfy their need for further investigation which can include anything eg building report, finance. However this clause has legal implications and should only be inserted after legal advice from a solicitor has been obtained.
In fact our recommendation is to get your solicitor to advise you on the contract prior to you signing it. This will allow them to make recommendations, advise you on your responsibilities and caution you on the legal liability you are submitting yourself to.
