9 tips on winning in a multiple offer situation
In a highly competitive market, take the time to learn some key buying tips for standing out from the rest.
17 Bond Street, Grey Lynn, Auckland. Recently sold by Tim Hawes
Real estate markets around the country have been competitive for some time, but in the current conditions buyers are extremely motivated. So your offer on that desired home has to be as close to perfect as possible.
Sometimes, you have to miss out on a home you love, before you start excelling at the buying process, says Ray White Auckland agent, Tim Hawes. If you want to compete in this high octane environment, you need to do your preparation.
Be organised on finance and expectations
So many new buyers Mr Hawes sees are right at the start of organising their finance and they’re not sure what they can buy, he says.This can be a problem if you see something you really like. Get all of your sums and mortgage pre-approval done before you go out seriously on your search, is his advice.
The Auckland agent suggests getting a notebook and making notes on each house, keeping track of what you liked and didn’t like and what you would compromise on for the right place.
Price is important
Become a pro on home values
5 Hawea Road, Point Chevalier, Auckland. Recently sold by Lawrence von Sturmer
“In New Zealand, no two houses are the same,” says Mr von Sturmer. In different markets, people will be looking for certain things. In the Auckland suburb of Pt Chevalier, for instance, most buyers want three to four bedroom homes, a good section, in a pleasant street and if you find that, typically between five and 10 people will want to make an offer
If the home is on a quiet street, with a north facing backyard, it might sell for more. If it’s near a block of flats, it might sell for less. All kinds of factors will affect price, he says.
The selling agent should be guiding buyers on price expectations, giving them some local comparisons, Mr von Sturmer says. “I don’t want a young couple to have their heart set on a house and not realise that it’s going to sell for $200,000 to 300,000 over their limit.”
Ask the selling agent what their appraisal was to the vendor, he suggests. It’s a legal requirement that they give a written appraisal to an owner and this should list comparative data of recent sales.
Develop a good relationship with the selling agent
To educate yourself and to make yourself known to the selling agent as a serious buyer, it’s important to get in early with them, says Alice O’Styke with the Ray White Wellington APA team. They’ll know the most about the property. Call them after the open home to see what the feedback has been like, she suggests.
And then talk with the vendor’s agent about price. “People can shy away from this and try and do things themselves, but it’s much easier if you have an open chat with the agent,” says Ms O’Styke.
Ways to make your offer attractive to the vendor (besides price)
In the current competitive market, unconditional offers reign supreme. This means, it’s wise to get all your questions answered about the home before you make your offer so it can be unconditional. Another way of making your offer attractive is to be flexible on the settlement date to suit the vendor. If you’re including any conditions, make the timeline of these as tight as possible.
Any conditions aren’t great, but specifically financial conditions are not ideal, says Mr von Sturmer.
“You disadvantage yourself if you say your offer is subject to finance because it’s out of the owner’s control. The owner can help with a building report or a LIM issue, or a valuation, but a finance clause puts a bit too much weight on the buyer, especially in a multiple offer situation. People want certainty,” he says.
Have your buying team ready
Have your lawyer, mortgage adviser and agent all lined up for when you make your offer.
If your case is complicated (for instance, you’re selling and buying at the same time) the team of professionals advising you will be crucial in navigating the process. Ms O’Styke says she’ll often work closely with advisers behind the scenes so both deals get done on schedule.
126 Onslow Road, Khandallah, Wellington City. Recently sold by Alice O'Styke
Write a buyer letter to the vendor
What if you need to sell first?
If you can only put in an offer conditional on selling your home, in this market, be warned, that’s unlikely to get you the house, says Mr von Sturmer. If your current home is in a popular area and will sell easily, some buyers are making an unconditional offer on a home but then asking for a longer, three to four month, settlement to give them time to sell it, he says. The seller’s agent will advise their client on whether a buyer’s intention to sell their own home quickly is a realistic expectation, says the Professionals agent. If you’ve got a great sellable house and are prepared to meet the market, it can be a viable option. If the agent doesn’t think you'll be reasonable and may not agree on price, then he’ll advise against it.
“The main thing is to make sure you have the finance approved – and if you don’t sell in time, it’s not the owner’s problem,” he adds.
Be philosophical about your bid
If you want to stay sane during the whole home buying process, you’ve got to be philosophical about whether you’ll be successful in buying the house or not, says Mr Hawes. When you’re putting in offers on homes that are attracting a lot of interest, you have to put the offer down and be happy to walk away. By being organised on learning the value of the home, it means you can put down a number that you’re happy to pay, and no more. Being clear on that means you won’t go on a “massive emotional journey” which leaves you feeling devastated, he says.
“If you miss out on your dream home, then the house wasn’t meant to be. I’m a big believer that the right thing will happen,” says Mr Hawes.
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