What is a LIM Report?
Buyers | 4 April 2019
By The settled.govt.nz team
So you’ve seen a place you love and you’d like to snap it up right away. Is a verbal offer enough to seal the deal?
The rules governing real estate transactions in New Zealand require all offers to be presented to sellers in writing. A written offer provides the sellers with a clear record of all the information about the offer and is a solid base for further negotiations. If for whatever reason, a written offer can’t be provided, the real estate agent can present a verbal offer to the seller. It’s not enough for them to say, ‘Ms Brown will offer you $657,000 for your home’. They must provide full details of all the conditions so the seller is able to make an informed decision.
A written sale and purchase agreement must be signed and accepted by all parties for a sale to be valid. While it’s fine in principle to present a verbal offer, getting it written down is a safer bet.
Don’t forget to get your lawyer involved before you sign anything. A sale and purchase agreement is a legal contract and you can’t just change your mind after you sign it.
When more than one potential buyer makes a written offer on a property, the seller can choose whichever one they think is the best (and then open further negotiations, if necessary). Although real estate agents work for the seller, they are required to treat everyone fairly and in good faith. If you make an offer on a property and there are other offers on the table, the real estate agent must tell you that it has become a multi-offer process. Some agencies will ask you to sign an acknowledgement of multi-offer form.
If you’re told that you are now in a multi-offer process, you should be aware that it’s time to put your best offer forward. You may not have the chance to make changes or improve your offer later. You should also be told if your competitor buyers pull out and you’re the only one left, in case you want to review your offer before it goes to the seller. Remember that the most attractive offer to a seller may not be the one with the highest figure written on it.
Be aware that a seller may choose to negotiate with you but that doesn’t mean they’ve accepted your offer. If you don’t agree on the seller’s terms and conditions listed in the sale and purchase agreement, they can choose to move on to negotiate with another buyer.
The next time you make an offer, make sure you do as much research as you can about the property. Our Property Checker tool is useful for helping you identify issues with a property. Make sure you get your finances sorted as well. Lastly, talk to your lawyer about the paperwork – and make sure you put any offer in writing.