Four Tips When You’re in a Multi-Offer
When a property is for sale using a sale method of By Negotiation or a fixed price there is a set procedure that we go through when there is more than one buyer interested in making an offer to buy the property. It isn’t as transparent as an auction however the multi-offer process is set out to make it fair for all parties involved.
Each buyer is advised to put their best offer forward. Why? Because the Vendor can only choose one offer to accept or negotiate with, so by putting your best offer forward you are ensuring you are giving it your best shot!
Here are four tips in making your offer more attractive
The least amount of conditions in your offer, the better. You want to keep yourself safe but doing things like sending the LIM Report to your lawyer prior (if it has been supplied) and getting pre-approval from the bank to purchase this particular property will allow you to eliminate these two conditions. You may be able to get a building inspection carried out quickly too.
If you can’t remove any conditions, look at the time period and see if you can reduce the number of working days.
Write a cover letter to go with your offer that will tell the seller a bit more about you. Quite often a seller may care who they are selling their beloved home too just as much as the price (we think this helped us when we bought our home).
You can make more than one offer. Sometimes you may be able to offer less, but be in a cash position than what they would if they offered a higher price but more terms. Give the seller both offers and see which one appeals to them more. A lot of people aren’t aware of this one but as the seller can’t sell their property twice, it is definitely an option to consider.
For more information about understanding, multi-offers visit https://www.settled.govt.nz/buying-a-home/making-an-offer/understanding-a-multi-offer-process/
Extended Settlement Dates
We also spoke briefly about extended settlement dates, which is a fantastic option to look at if it is mutually agreed by both the seller and buyer. Settlement Day is when the balance of the funds for the property are paid and the purchasers take over ownership of the property. Normally a settlement date is anywhere between one week to three months however there are scenarios where an extended settlement date such as 6 months or similar may benefit both parties.
If a seller is going to be building their next home then a longer settlement date will enable them to stay in their current property and reduce any extra costs they may incur if they were to rent during this period. A longer settlement date can also allow a seller to be in a cash position with time for them to find their next property. This is happening a bit in our market at the moment and our savvy sellers are taking advantage of the winter months with fewer properties available, setting a longer settlement and putting them in a prime position to be able to make a strong offer when more properties are available over the spring period.
For a buyer, a longer settlement could enable them time to sell their current property without having to use other finance options such as bridging finance. It can also give them time to save more money if they are wanting to carry out any renovations or even pay off any other outstanding debt they have before they have to start making their mortgage repayments.
If you would like to talk further about any of these topics, you can contact me via email at anita.dobson@harcourts.co.nz or phone 021337093.