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Are you REALLY ready to buy?

Posted by Susa Guhl on 30/10/2019
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The way the market often behaves, whether we like it or not, means that we are usually not the only one to like a particular property. You know, well presented, right area, right size, right price band…

We regularly meet buyers who believe that they are ready to make an offer, but often miss out. Why?

Photo by RobinHiggins

Recent Scenario
A great property came to the market, smack bang in the middle of many buyers’ wish list. It was marketed with a 3 week set date of sale (unless sold prior).

After 2 days of marketing someone wanted to make an offer and didn’t want to wait. The vendor instructed us to call for all offers 5 days later, to give others a chance. We received 6 offers which were presented. Although all of the offers had conditions, and were close, if not the same, in price, the winning offer simply got over the line due to having the shortest conditional period.

These buyers had made sure that they were in a position to move as quickly as possible if their offer was accepted. So what did they do?

Before they made their offer they had already:
• arranged for a builder to be on standby to do a rapid inspection
• established a relationship with a solicitor
• understood the exact requirements of their bank
• spoken to their prospective insurer and understood their requirements
• understood how a multiple offer scenario would work
• read the LIM provided by the agent
• visited the local council to clarify items on the LIM
• made sure that the agent knew they were definitely interested in placing an offer

These activities allowed the successful buyers to know exactly how long they would need to work through their conditions and because of this, they were able to secure the property.

A common mistake
You might assume that if you are in an early multiple offer situation, buyers would be in a totally cash position (without conditions), right? Wrong.

As well as the example above, we recently saw a property receive 11 offers, but only a single offer unconditional. This often occurs when offers are called for in the first week of marketing, as buyers haven’t had enough time to do their due diligence.

The lesson?
So, the moral of the story is, get as many things in place you start visiting property for sale, because if you love it, chances are others will too.

Photo by Tumisu

The checklist

  1. Make sure you are receiving notifications of new listings as soon as they hit TradeMe or realestate.co.nz.
  2. Talk to your employer and make sure they understand your need for urgency and let you slip away to view property as soon as possible (don’t wait until the weekend).
  3. Locate a suitably qualified builder and make contact. Explain your circumstances and establish how quickly they can guarantee to inspect a property for you, if you have an offer accepted.
  4. Locate and meet with a solicitor to discuss requirements and speed of service.
  5. Learn how to read a Land Information Memorandum from the local council and obtain a copy from the agent representing the property (if they provide one). Read a blog related to reading LIM reports here: https://www.susaguhl.co.nz/5-tips-to-make-reading-a-lim-report-easy/
  6. Obtain written pre-approval from your bank and understand any constraints and time-frames.
  7. Talk to an insurer and gather all relevant information so you have a level of confidence about what you’ll need to get insurance.
  8. Contact a valuer and establish how quickly they can produce a valuation if you or your bank want one.
  9. Get a copy of a multiple offer document and read it, so that when you find yourself in a competing situation, you are already well informed about the process.
  10. Make sure that the agent knows you are interested and tell them that you wish to be kept informed if anyone makes an offer.
  11. Download and read the REA Guides about Buying and Selling property.
  12. Lastly, remember that the agent is employed by the Seller, so be nice and try and establish an open and friendly dialogue early on – a good relationship with an agent can be worth its weight in gold as you hunt for property and seek professional advice.

If you would like to talk things through, please feel free to contact any one of us, we’d be happy to help.

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