Making an Offer
You've found the perfect home and you plan to make an offer - an exciting and nerve-wracking time!
Key Points About Making an Offer
- Engage a solicitor BEFORE signing any Sale and Purchase Agreement
- Always include finance, building report, and LIM conditions - even with pre-approval
- 10% deposit is standard, paid when you go unconditional
- Allow sufficient time for all conditions (don't create tight timeframes)
- You can negotiate - asking price is often just a starting point
- The agreement isn't binding until both parties sign
Engage a Solicitor FIRST!
Before signing ANY Sale and Purchase Agreement, you must engage a solicitor to get independent legal advice. Once signed and accepted, the agreement is very hard to alter, so it's crucial to get it right from the start.
What Your Solicitor Will Do
Your solicitor is an essential part of the home buying process and will handle:
Advise on Sale & Purchase Agreement
Explain all clauses and implications
Arrange LIM Report & Title Search
Check property history and legal status
Advise on Issues Identified
Highlight any concerns from reports
Liaise with Vendor's Solicitor
Handle all legal communications
Confirm Conditions Met
Ensure all clauses satisfied
Review Mortgage Documents
Check bank documents before signing
Witness Signing
Ensure legal validity of documents
Manage Payment on Settlement
Handle funds transfer securely
KiwiSaver Withdrawal
Coordinate your KiwiSaver first home withdrawal
Conditions You MUST Include
These standard conditions protect you and give you time to complete due diligence:
Finance Clause
Include this even if you have pre-approval! Pre-approval is conditional on the property being acceptable security to the lender.
Allows you to walk away if finance isn't confirmed or if valuation comes in too low.
Registered Valuation (Optional)
Sometimes requested by lenders to confirm the property is worth what you're paying.
If valuation comes in below purchase price, you can renegotiate or walk away. This is not always required but can provide extra protection.
Builders Report
Essential for identifying structural issues, weathertightness problems, and hidden defects.
Important: Leave option to walk away if problems found. Don't give vendor first right to remedy - seek legal advice on this clause!
LIM Report
Land Information Memorandum from the council showing everything they know about the property.
Make the offer conditional on satisfactory LIM report review.
What is a LIM Report?
A Land Information Memorandum is the council's official record of information about a property. It includes:
Special Land Features
Erosion, slippage, flooding history
Drainage Systems
Stormwater and wastewater info
Rates Owing
Outstanding council rates
Building Consents
Past and current building work
Heritage Listings
Historic Places Trust status
Network Utilities
Power, water, telecommunications
Cost:
$200-$400Not mandatory but STRONGLY recommended. The small cost could save you from buying a property with major issues.
Certificate of Title
Your solicitor will obtain the Certificate of Title which confirms:
Type of Property
Fee simple, leasehold, etc.
Current Owner
Legal ownership details
Current Interests
Mortgages, easements, covenants
How Much Should You Offer?
Research Tools:
- •Check recent sales in the area for similar properties
- •Get a Desktop Valuation online (request one from your mortgage adviser)
- •Use OneRoof Estimate
- •Check Homes.co.nz property data
Strategy Tips:
- •Don't offend the seller with a too-low offer
- •In a seller's market, be competitive from the start
- •You can always go higher, but can't go lower
- •Get feedback from the agent on price expectations
What Happens After You Make an Offer?
Vendor Accepts
You have a binding agreement! Time to start meeting conditions.
Vendor Counters
Vendor proposes different terms (usually higher price). Now it's your turn to respond.
You're Unhappy
You can walk away at any time before the offer is accepted. No agreement = no obligation.
Deposit
You'll nominate a deposit amount in your agreement (usually 10% of purchase price).
This is paid to the vendor's solicitor's trust account once you go unconditional.
Timing
Allow sufficient time for all conditions:
- • Bank unconditional offer
- • Registered Valuation
- • Building Report
- • LIM report review
TIP: Factor in time between going unconditional and settlement - at least 3 weeks for loan documentation and giving notice on your rental.
Don't create tight timeframes - this only adds stress!
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Frequently Asked Questions About Making an Offer
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Offer accepted? Great! Now you need to meet all your conditions and go unconditional.
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