The feeling of having to inform your client for the 4th time that their offer was unsuccessful; not the most exciting phone call, however in most towns around the country that is the market we are in. Have you had the same experience?

So how do you buy in this market?

When markets change, you need to change how you go about purchasing, if you’re a second time or more buyer, the chances are it's a different ball game than it was last time you were in the market. If you’re a first home buyer, it can be a very challenging time.

Points to consider when you are wanting to buy in this market:

1. Good properties, that are well priced (probably what you are after) go quickly. In order to give you the best opportunity, you need to be on the ball, quick and have your ducks in a row.

2. When placing an offer, there are typical clauses that are inserted into a contract, such as:
• Building inspection
• Finance
• LIM
• Subject to house sale
• Solicitors approval

It is helpful to understand what is attractive to the vendor when an offer is received. If it is good property there is a high possibility that your offer will go into what we call a "multiple offer" scenario, where there could range from a few offers, to over a dozen offers on the same property. In the Hamilton market, I have seen a property have 17 offers!

Now the verdict does not just come down to price, the conditions also have an impact on the offer, so how do you reduce the conditions?

Answer: Do your due diligence first before the offer goes in (just like with an auction)!

Finance - in some situations, you can get your loan approved first so you can make a cash offer, now for the vendor, put yourself in their boots, you can imagine how they feel about that!
Building Inspection - when the vendor has multiple offers in front of them, and some will have no building inspections clauses in them, it gives the vendor confidence that the purchaser won't pull out afterwards. So try an arrange a building inspection beforehand. It can be a pricey expense if you miss out on the property, however that's exactly what your competition is doing right now.
Solicitors clause – this is the big question mark for any vendor. It gives the purchaser virtually any reason to pull out and does not give the vendor much confidence, however this is usually done for a few reasons,
- for the investor to do his due diligence after the offer is accepted.
- for a first home or wary buyer to have confidence from the solicitor that they are safe.
My recommendation, is to get educated first, and if it helps, see a solicitor first to have them explain the buying process to you. I would highly recommend to avoid this clause if you can, as an agent would typically suggest to their vendor that it is not a favoured condition.
Subject to house sale - hard to avoid - but does not give the vendor much confidence.
LIM - either buy one from the council first, or some people go to the council to look in the property file and this satisfies a lot of peoples queries, however this is not typically advisable by a solicitor.

So to sum it up:

• Be on the ball
• Put in your best offer
• Reduce the conditions as much as you can while being safe (you do not want to buy a lemon)
• Have a group of people to help you achieve all of this. - A good agent, building inspector and solicitor.

Good Luck.

Post contributed by Dylan Foote.

Dylan Foote is a Licensed Real Estate Agent with Harcourts Hamilton (winner of Readers Digest Trust Branded 2013 and 2014).  Dylan and The Foot'e Tean can help you with all your Hamilton Real Estate needs, and promise never to drop the ball. Follow Dylan and his team on his Facebook page or email dylan.foote@harcourts.co.nz

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.