Buying a house can be daunting, and in the current market, even more so. There are so many things to think about and so many variables to consider you could literally write a book on it (and many have!). In lieu of writing a book, I thought I’d share with you my top three hints and tips for home buyers that are most relevant to today’s market.
Auctions. Auctions by their nature are a high pressure environment but there are ways to help manage this pressure. Firstly have a clear understanding of what your limit is, if you are not sure you can keep to it, get someone to bid on your behalf. Understand your position if you have the highest offer but the reserve has not been reached. The auctioneer will be trying to increase the bidding to reach reserve. However if you have the highest bid you have an opportunity to negotiate with the buyer. This will usually occur in an office via the real estate agent. This is a great opportunity to get out of the high pressure environment into a more neutral setting. If you can negotiate a price with the buyer I would not return to the auction room (the auctioneer and real estate agent will try to get you to return to allow other bids) as this then allows someone else to potentially overbid you. Clearly point out what the price reached in the auction room was and insist your current offer is only valid if accepted immediately. My office has had clients lose out at auction with just this scenario. Remember it is not in your interests to be in the auction room so any opportunity to take the negotiations out of it are typically in your favour.
Due diligence. When you buy a house it is essentially in an ‘as in’ condition. If you spot any faults in the property they basically become your problem. A building or engineering report may seem like an unwanted extra expense but it could potentially identify issues worth tens of thousands of dollars. This is especially relevant in Christchurch with post EQ repairs.
Price. This can be daunting for many people. A major point to be aware of is if there are other interested parties. If there are the focus should probably be on getting the house as opposed to the price. However if it looks like you are the only interested party (ie property passed in at auction) this is your opportunity – you can always look to increase above your initial offer so there is little risk (as long as you do not offend with the offer) starting low. If you can justify your price that may help, such as repairs needed on the house or similar properties sold around that price
If you had to pick just three pieces of advice to share with a home buyer what would they be?
The information contained in this article is of a general nature and should not be taken as advice. It reflects the opinions of the writer only and does not necessarily reflect the opinions of New Zealand Home Loans.
Auctions
Auctions by their nature are a high pressure environment but there are ways to help manage this pressure. Firstly have a clear understanding of what your limit is, if you are not sure you can keep to it, get someone to bid on your behalf. Understand your position if you have the highest offer but the reserve has not been reached. The auctioneer will be trying to increase the bidding to reach reserve. However if you have the highest bid you have an opportunity to negotiate with the buyer. This will usually occur in an office via the real estate agent. This is a great opportunity to get out of the high pressure environment into a more neutral setting. If you can negotiate a price with the buyer I would not return to the auction room (the auctioneer and real estate agent will try to get you to return to allow other bids) as this then allows someone else to potentially overbid you. Clearly point out what the price reached in the auction room was and insist your current offer is only valid if accepted immediately. My office has had clients lose out at auction with just this scenario. Remember it is not in your interests to be in the auction room so any opportunity to take the negotiations out of it are typically in your favour.
Due diligence
When you buy a house it is essentially in an ‘as in’ condition. If you spot any faults in the property they basically become your problem. A building or engineering report may seem like an unwanted extra expense but it could potentially identify issues worth tens of thousands of dollars. This is especially relevant in Christchurch with post EQ repairs.
Price
This can be daunting for many people. A major point to be aware of is if there are other interested parties. If there are the focus should probably be on getting the house as opposed to the price. However if it looks like you are the only interested party (ie property passed in at auction) this is your opportunity – you can always look to increase above your initial offer so there is little risk (as long as you do not offend with the offer) starting low. If you can justify your price that may help, such as repairs needed on the house or similar properties sold around that price
If you had to pick just three pieces of advice to share with a home buyer what would they be?
The information contained in this article is of a general nature and should not be taken as advice. It reflects the opinions of the writer only and does not necessarily reflect the opinions of New Zealand Home Loans.
