How to make an offer on a house in NZ

Ideally, you’ll have been pre-approved on your home loan, allowing you to move quickly when that perfect property pops up. Hopefully, you’ve also already checked whether you're eligible for support in buying a home (especially if it’s your first property), for example using your KiwiSaver.

Even if this is the case, you should get back in touch with your lender to confirm how much they’re willing to lend to you. Just as you use a lawyer, it's wise to enlist the help of a mortgage adviser who will communicate with your chosen lender on your behalf. They’re free to use and will cast the net wide to a number of bank and non-bank lenders.

Offers on homes in New Zealand can either be conditional or unconditional.

What is a conditional offer?

Quite simply, attaching conditions means that your offer isn’t finalised until these conditions are met, usually within a set timeframe. It’s worth noting that both the buyer and seller can add conditions to the Sale and Purchase agreement. Common buyer conditions include:

• A satisfactory building report: you’ll have examined the property yourself during open homes or private viewings. However, we’d highly recommend having a professional builder’s report completed on the property ideally before you make your offer. If there isn’t time, adding a building report of your own conditional to your offer means that if it doesn’t meet your expectations, you can walk away.
• Finance satisfactory to you: many first-time buyers make the mistake of thinking pre-approval on a home loan means that finance is set in stone. That’s not the case, so you might want to build in this condition to allow you to go back to your lender and decide on a specific loan program.
• An appraisal condition: this gives you time to bring in a professional valuer to assess the property’s true market value. If there’s a big difference between the value they tell you, and the price you agreed with the seller, you might want to walk away.
• An insurance condition: this condition tends to be used if you haven’t already established that you can get insurance on the property. This is becoming increasingly important especially in earthquake prone cities.
• Sale of another home: if you need to sell another property before unconditionally committing to buy this home, you can include that as a condition. It’s worth noting that you’ll likely be bound to a time period. Alternatively, you could make the offer unconditional but ask for a long settlement period, giving you time to sell your home.
• Due diligence condition: this is a bit of a catch all for any further research you want to do about the property. Warned any vague conditions like these can be off-putting to sellers.

Note: If the buyer meets the conditions within the specified time period, your offer immediately goes unconditional, meaning you’re now legally obliged to go through with the transaction.

If your conditions aren’t met, you have several options:

• Ask the seller to pay for a problem to be fixed you could renegotiate the house price
• Or you can walk away

A sale and purchase agreement is a legally binding contract between you, the buyer, and the seller. It will contain all the important information about the property sale – the price, conditions, any chattels being sold with the house, the settlement date, etc.

Usually, this is drawn up by the seller’s solicitor, and needs to be signed by both parties. You will ask your lawyer to go through this with a fine tooth comb. In particular, if the seller has included any conditions on their end of the deal, you need to be on top of these, and the timeframe you have to complete them.

In some cases, once everyone has signed the agreement, you’ll now pay your deposit. In other instances, this won’t happen until the offer goes unconditional.

If you find yourself in a multiple-offer situation, you’re going to want to find ways to make yours the most attractive. It’s important not to get carried away in the heat of the moment, especially where budget is concerned, but here are a few common concessions buyers can make to get their offer over the line:

Flexibility about your settlement date could really appeal to a seller. It pays to check with the agent first to see if the seller is under any time pressure, such as an unconditional date looming for another property purchase.

Be as ready as you can be with your finances – anything you can do to act faster than other buyers will help get you into pole position.

When adding conditions that involve third parties, for example a builder or property valuer, let the seller (or their agent) know that you’re already in contact with these professionals, and you plan to move quickly to bring them in.

While you don’t want to rush yourself by providing unrealistic time frames for your conditions to be met, don’t go too far the other way. This shows you’re really keen on the property, and just need these things ticked off the list.