Methods of Buying
For Sale by private treaty
One of the more common methods you will come across. The property is listed with an advertised market price. As a buyer through this method you will be able to make an offer on your terms and conditions and negotiate a successful agreement. The initial offer basically is your wish list - such as price and conditions
With Auction the market decides whether the property sells and how much it sells for. When a willing buyer and a willing seller eventuate with a sale - true market value is established.
Buying by Auction can seem difficult, or even daunting, but there are many real advantages of purchasing utilising this age-old system.
At Auction you can see your competitors, all the parties wishing to purchase must make their bids, publicly, at the Auction, negotiations are out in the open and you know what's going on.
Once you are interested in buying a property by that is offered for sale by auction, you know the time and date of sale. Now you have to do your homework.
- Look, look and look again - arrrange inspections with builders, plumbers or other specialists.
- Get to know the market - you won't know the reserve price, so you will need to research your market
- Arrange Finance - sales by auction are always unconditional, so it is vital that you have finance confirmed before you begin bidding
- Get your Solicitor on the job - it is recommended that you seek legal advice
- Check auction documents - make sure you are familiar with all the details and conditions of sale
- Attend another auction - if you want to understand how an auction is conducted, consider attending another auction just to familiarize yourself with the process
At the Auction
Auction commences - bidding begins either by the auctioneer or another bidder opening the bidding
Making a Bid - simply make a gesture that can be seen by the auctioneer / or alternatively Grant can bid on your behalf
Reserve Price - bidding continues until the reserve price is reached and once the reserve price is reached the property will be sold to the highest bidder
Passed in - if the property does not reach the reserve price, it is 'passed in'. The highest bidder usually has the first opportunity to negotiate a sale with the seller
After the Auction - The successful bidder will sign the sale agreement and pay a deposit ( usually 10% of the purchase price )
The purchaser puts forward in writing their most competitive bid. There is a final closing date when all tenders are to be in by. On that date all tenders will be opened and the tender most suitable to the vendor accepted. Not always is the best price tender the best. It may come down to conditions and dates.
Steps for Buying
When you come to Grant in search of your perfect property he will work with you to establish your goals and help set about achieving them. Grant will guide you and help you through the entire process of buying a house, providing advice on property values, investment potential, finance options and legal requirements.
Buying a house is a process, it does not need to be a difficult one, and to ensure this Grant ensures you have, as much information as you need to make the right decision.
Step 1 - Saving a deposit
"How much will I need to buy a home and how much can I borrow ?" Two frequently asked questions that you will find answers to when you click on the following links:
Step 2 - Choosing a Real Estate consultant to work for you
Look no furtherï¿½..you've found him!
With an extensive knowledge of the Hamilton Real Estate market Grant can work for you at no cost to help you find the right home. Grant can show you nearly every home for sale in Hamilton regardless of which company is marketing it.
ï¿½ï¿½What a great way to avoid being hassled by every salesperson in town!
Grant is a member of the College of Salespeople affiliated with the Real Estate Institute of NZ, which supports professional work ethics and is a national body.
Step 3 - Finding Your Home
Grant will begin by establishing your 'wish list' of what preferences are in your 'ideal' home. The search then begins to find suitable properties currently on the market. As new properties are continually entering the market daily, Grant will match these to your needs and keep you informed if anything suitable comes up or will be entering the market in the near future.
Step 4 - Making an Offer
So you've viewed a number of properties and the right one has come up. It's time to make an offer. The first step is to decide on a price and conditions - then you make the offer. Grant will put the offer in writing, you sign it, and it will be presented to the owner of the home.
Your offer may contain certain conditions which will need to be satisfied to make the conditional agreement an unconditional and enforceable contract. Grant will help you select the appropriate clauses to cover the matters affecting the purchase of your property and can also help in advising the right people to assist in you meeting these conditions. Some conditions that may be included in your offer are:
a) Finance Clause: In most cases your bank will need to approve a loan to purchase the property. The bank may require a registered valuation to do this.
b) Valuation Clause: Generally required for finance purposes but it can also be an important reality check to help protect your own interests. Grant can assist in referring you to a valuer. There is a charge for a valuer often in the vicinity of $250 to $350. Some valuers can complete the valuation in 24 hours while others need several days.
c) Builders Inspection/Specialist Report: You may wish to have a builder or other specialist look over the property for you. Most builders have a standard checklist they cover and for the minimal cost of this exercise it can save a lot of "surprises" down the track
d) LIM (Land Information Memorandum) - A LIM is a report on a property compiled from information held on the City Council files. A LIM may contain information on the following: - Any public works proposed in the area - Map of the property - District planning information - Any requisitions - If a swimming pool is registered - Rates - Any special features - Site plan - Building permits/consents - Issue of any code of compliance - Bonds/cellar idemnities, legal file - Building warrant of fitness
e) Solicitors Approval - You may wish to have your solicitor review the contract and review the title of the property you are purchasing.
Step 5 - Negotiating
Negotiation is more often the rule rather than the exception in Real Estate. Just because it is the norm, however, does not mean that most people are proficient at it. Sure, many people feel that they are the best negotiators in the world, but in reality, it is a learned art. It takes a keen understanding of the process in order to be a good negotiator, this is where Grant's knowledge and expertise is welcome.
Once your offer ( in writing ) is presented to the seller they may decide to accept your offer exactly as presented or to counter offer. Hence the process of negotiation begins.
At this stage you may decide to accept the counter offer, or you may consider a counter-counteroffer. This process continues until a final agreement is reached.
How do you know when the seller has made their last offer. This is something you never know for sure. Indeed, even the sellers may not know if they would have accepted less, unless and until the situation were presented to them.
However, as negotiations progress, you will get a feel for what the sellers will do by how they act during the process.
Q. How much should you offer ??
A. This is up to you, however, nothing will turn a seller off more than a low ball offer on a house that has been realistically priced. Often, negotiations will stop, rarely to be revived again. If they are re-opened, the sellers generally will show their displeasure at the initial low offer by locking at or near the listing price.
The Moral is an unrealistic offer on a house that meets your needs and is priced correctly could end up costing more than it would with a realistic offer.
Step 6 - Unconditional Date
Fulfilling or satisfying the conditions of the contract will make the contract unconditional. This means you must proceed with the purchase of the house. Upon unconditional date you will need to pay a deposit to finalise the contract. The deposit amount is agreed by both parties to the contract, but is normally 10% of the purchase price. Your deposit will be held in the Trust account of the Real Estate agent company until settlement.
Step 7 - Celebrate !
The hard part is over. You can now start packing, planning your move and looking forward to your new home. Contact Grant for a "Moving Checklist" email@example.com
Step 8 - Settlement Date
During the period leading up to settlement date the Bank sends the loan agreement and mortgage documentation to your solicitor. At some time you will go over these documents with your solicitor prior to signing them. Once all of the documentation has been finalised, your solicitor then settles the purchase of the property with the vendor's solicitor and then Grant will be instructed to release the keys to you. Don't forget, after settlement you are now the legal owner of a home, therefore insurance is your responsibility.
(Some circumstances may differ to those described, we suggest you seek advice from your own solicitor regarding procedures for your purchase)