When you’ve found a house that meets all your requirements and you’re interested in making an offer, it can be difficult to know how to get into action.
What route you take depends on whether the house is for auction, for tender or open to offers. Most house sales in New Zealand tend to be sold by auction or will have a price expectation listed.
If the property is for sale at a fixed price you will need to put forward a formal offer in writing – the real estate agent or your lawyer will have a standard form for this.
At this point the purchase is not a certainty and there can be several clauses or conditions to the offer you present; these may include:
- An independent evaluation
- A title search
- A building inspection
- A LIM report
- Sale of another property
- Having finance approved
The deposit
A deposit of about 10% is paid to your lawyer or the estate agent once an offer is accepted. The deposit is held for a set period, usually about 10 days, or until the conditions of the offer have been met.
The contract
Once signed by both parties, a contract is legally binding and if one party pulls out penalties will be paid. The contract will state a settlement date – when the final payment is made to the seller and the house becomes yours.
Settlement
Settlement may be as little as three weeks, or as long as six months, but more commonly settlement takes around six weeks.
Buying by auction
An auction is a process by which a house is sold to the highest bidder once the owner’s reserve is reached.
When buying by auction, make sure you register your interest with the estate agent in advance and do all your homework on the property before the auction – a purchase by auction is unconditional.
You must also have your finances sorted before the auction and have enough money to pay the deposit on the day. Discuss any questions or concerns about the auction process with the estate agent before the auction.
More information about housing in New Zealand
Buying property in New Zealand
Housing finance, legal advice and building inspections
Renting in New Zealand