27 Nov Competition hot in first-home property market – but dont forget to get good advice from your lawyer.
Source: NZ Herald – November 2011
A shortage of houses in the first-home buyers’ market over winter has caused a rise in multi-offer agreements, confusing those new to the real estate game.
Multi-offer agreements are when more than one written offer is received for a property at one time, turning a sale by negotiation into a sale by tender.
Real estate agents are warning first-home buyers to be aware of the rules of multi-offer agreements so they don’t miss out when making an offer.
“Multiple offers occur on a regular basis and were particularly prevalent over the winter and spring months when there were very low levels of stock on the market, but there was also high buyer demand,” said Rachel Dovey of Bayleys Real Estate.
As soon as two or more purchasers were willing to put an offer on paper, negotiations halted and all parties were invited to present their best offer. The offers, in sealed envelopes, were then presented to the vendor.
A seller then chose their preferred offer, whether it be the highest price, least conditions or family over developer.
Kiri Barfoot, of Barfoot and Thompson, said prospective buyers needed to realise there was no room for negotiation after envelopes were sealed and buyers had to put their best offer forward.
“In this situation, people need to get good advice from their lawyer and real estate agent. There are no second chances” she said.
Barfoot said multi-offer agreements had been around for years but first-home buyers may not have heard of them.
Barfoot advised buyers to do their homework and make informed offers.
“Often first-home buyers like to get advice from everyone and, by that stage, someone else has fallen in love with the property as well and are ready to make an offer.”
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