HOW DO I MAKE AN OFFER TO BUY A PROPERTY?
You have been to a multitude of open homes and found your dream property. What happens next ?
If the property is being sold by negotiation then you will want to make an offer for the property. So how exactly do you go about making an offer to buy a property ?
Agreement for Sale and Purchase
A contract to buy and sell a property must be in writing to be enforceable. This means that normally the vendor will not accept a verbal offer and will require you to put the offer in writing. This involves signing an agreement with the price and other terms you are offering and presenting it to the vendor.
Usually the agent will prepare the agreement, or sometimes the purchaser’s lawyer, and then the purchaser will sign the agreement first. Then the agent presents it to the vendor.
Form and Content of Agreement
Most agreements for the sale and purchase of property in NZ follow a standard form document prepared by the Real Estate Institute in conjunction with the Auckland District Law Society Incorporated.
The key contents of the agreement include:
- Name of vendor
- Name of purchaser. You can always nominate a trust or company or other persons as purchaser after the agreement has been signed.
- Address of the property and legal description/certificate of title.
- Price of the property.
- How much deposit is being paid and when.
- Any conditions for the purchaser and for the vendor.
- Details of any tenant who will still be at the property at settlement time.
- Chattels included in the sale of the property.
- Any further terms that the parties wish to add to the agreement.
Binding Agreement for Sale and Purchase
Once you have completed the details in the agreement including the price and signed the agreement then this is an offer which is presented to the vendor.
The vendor may:
- Sign the agreement without making any changes in which case congratulations (!) you have a binding agreement for sale and purchase subject to any conditions included in the agreement.
- Make a counter-offer so the vendor signs the agreement but changes the price or one or more terms and initials the changes made to the agreement. The counter- offer is then presented back to you and you can either agree to the changes and initial them in which case you have a binding agreement or you can make another counter-offer or decide not to proceed any further.
- Reject the offer and not make any counter offer. In this situation you may try to submit another offer for the vendor to consider with say a higher price.
Contact the team at Blackwells for more information on making an offer to purchase a property and advice on the property buying process.