More than just a numbers game
No, it’s not all about the money. Pattie Pegler chats to some professionals about other ideas to help you land your perfect home.
You probably think cash is king when it comes to buying a home, and as a general rule, you’re right.
But if you have your heart set on a particular house, there can be a few ways to make your offer more appealing.
And – provided you’re not going to auction – not all involve upping the money on the table.
Stuff Homed spoke to property professionals to get their tips for giving yourself the best possible shot when you submit an offer.
Keep it clean
Make your offer as ‘‘clean’’ as possible, says North Canterburybased Lime Real Estate agent Brooke Azzopardi.
‘‘Think ahead and eliminate as many conditions as you can. So get a LIM, do a building report, get confirmed finance for that particular property, not just pre-approved finance,’’ she says.
Jerry Chen, of Remax in Auckland, agrees. ‘‘If you want to make an offer more attractive, we always recommend doing those things as quickly as you can. If the period of the conditions can be shortened, that’s a better offer.’’
Of course, getting that kind of due diligence done costs money, and if you don’t secure the property in the end, it’s money that you’ve lost.
Use this tactic wisely and save it for that home that you really, seriously want.
Get the timing right
Timelines can be another persuasive factor in an offer.
While vendors might want the time period for satisfying your conditions to be short, ‘‘a lot of the time vendors might not have somewhere lined up to go,’’ Azzopardi says.
‘‘Allowing a longer settlement date or allowing it to be open, by mutual agreement, is often more attractive. It gives flexibility.’’
Also consider the timing of the deposit, suggests Chen.
Some purchasers want to pay the deposit when they go unconditional while others will pay when both parties sign the agreement.
For vendors, that deposit can indicate commitment, says
Chen. ‘‘It says ‘we’re not just talking – we do have some money, and we’re serious buyers’. There are so many buyers who jump out of contracts because they can’t get approval for finance.’’
But mortgage adviser Clifford Lawson adds a cautionary note here – the timings have to work for you too. ‘‘If someone wanted a long settlement, I’d want to know why,’’ he says.
If you are making an offer before selling your own home, you probably need to think about bridging finance and that can get very expensive, as you are essentially carrying two mortgages until your home sells.
Likewise, if the vendor wants a long settlement date, and you are renting a property, what’s the extra cost of your rent going to be in that period? And what happens if the property the vendor is buying falls through?
‘‘It’s really important to get the real picture of financial implications before you make an offer,’’ says Lawson.
The personal touch
Sometimes potential buyers put their personal side forward in a letter accompanying the offer.
If you’re offering on a family home or a property that has some special significance to the vendor, that could help.
You might want the vendor to know that you plan to nurture those fruit trees in the garden, or want your children to grow up running around that garden. Tell them why you love the house and why you want to live there.
‘‘We have so many vendors mention that they want a good family to take care of the property,’’ says Chen.
‘‘They have so many good memories, they want someone to carry that on.’’
But the vendor motivation and the other offers do influence the success of this kind of strategy, so don’t bank on a miracle – some vendors will refuse to consider letters at all.
‘‘Most vendors will look at a letter but if the numbers don’t stack up, it probably won’t make a difference,’’ advises Chen. ‘‘If there are two offers that are really close, however, a cover letter may help to win it.’’
Buyer beware
Buying a home can often be an emotional situation and while you want to put your best offer forward, it’s vital to keep a clear head and not get carried away, too.
There are risks when buying a property and a bit of due diligence done in advance can save money and stress later.
Property lawyer Matt Hay, in Wellington, tries to juggle buyers’ enthusiasm with commercial realities.
‘‘We get people who come to us and they want to make an offer tomorrow morning.
‘‘It’s a balancing act – we don’t want to pop the balloon for them, but we want them to know what they’re getting into.’’
He advises potential buyers to get in touch with their property lawyer with plenty of time to spare if they’re thinking about buying.
Do some research in advance too: a 1970s, standalone weatherboard home on a section will carry very different risks to a central city flat, where things such as body corporate matters also need to be considered.
‘‘Always do as much homework as you can,’’ Hay says. ‘‘The more you know, the more confident you can be in your offer.’’