How to make an offer on a property

You’ve done the hard work—you’ve saved your deposit, secured mortgage pre-approval, and found a property that feels like home. Now it’s time for the exciting next step: making an offer. This is where you formally express your interest in buying the property, and it’s crucial to get it right.

This guide explains the different ways to make an offer in New Zealand and what you need to know to put your best foot forward.

The key document: the sale and purchase agreement

No matter how you buy a property, your offer will be made in writing on a Sale and Purchase Agreement. This is a legally binding document, so it’s essential to have your solicitor or conveyancer review it before you sign.

The agreement is usually prepared by the real estate agent and will outline all the details of your offer, including:

• The price: The amount you are offering to pay for the property.
• The deposit: The amount you will pay upfront to secure the sale (usually 10% of the purchase price, paid when the offer becomes unconditional).
• The settlement date: The date you will pay the remaining balance and take legal ownership of the property.
• Chattels: A list of items that are included in the sale, such as curtains, light fittings, and dishwashers.
• Conditions: Any clauses that must be met for the sale to go ahead.

Understanding the different ways to make an offer

In New Zealand, properties are sold using different methods, and each one has a unique process for making an offer.

Offer by negotiation

This is the most common and flexible method of sale. You work with the real estate agent to submit a written offer to the seller. The seller can then choose to accept your offer, reject it, or make a counter-offer. This process continues until both parties agree on a price and terms. The biggest advantage of this method is that you can easily include conditions in your offer.

Buying at auction

An auction is a public sale where buyers bid against each other. If your bid is the highest and meets the seller’s reserve price, the property is sold to you when the hammer falls. The key thing to remember about auctions is that all bids are unconditional. This means you must have all your finances approved and have completed all your due diligence (like getting a builder’s report and LIM report) before the auction day.

Offer by tender or deadline sale

This is a confidential process where all interested buyers submit their best offer in a sealed envelope by a specific date and time. You don’t know what other buyers are offering, so you need to put your best foot forward from the start. You can usually include conditions in a tender or deadline sale offer, but an unconditional offer will always be more attractive to a seller.

What are conditional and unconditional offers?

Understanding the difference between a conditional and an unconditional offer is crucial, as it affects the strength and risk of your position.

A conditional offer

A conditional offer means your offer to buy the property is subject to certain conditions being met by a specific date. If these conditions are not met, you can usually withdraw your offer. Common conditions include:

• Subject to finance: This gives you time to get final approval for your home loan from your bank.
• Subject to a builder’s report: This allows you to get a professional building inspection and be satisfied with its findings.
• Subject to a LIM report: This gives you time to get a Land Information Memorandum from the council and have your lawyer review it.
• Subject to the sale of your current home: This is for buyers who need to sell their existing property to finance the new one.

An unconditional offer

An unconditional offer means you are legally committing to buy the property with no conditions attached. Once the seller accepts and signs your unconditional offer, the property is sold. This is the standard for auctions and is a very strong type of offer in any negotiation, but it carries more risk. You should only ever make an unconditional offer if you have completed all your due diligence and have your finance 100% confirmed.

Tips for making a strong offer

In a competitive market, you want your offer to stand out. Here are a few tips:

• Be prepared: Having your mortgage pre-approval ready shows the seller you are a serious and capable buyer.
• Keep conditions to a minimum: The fewer conditions you have, the more attractive your offer will be. Try to get as much due diligence done as you can before you make your offer.
• Be flexible on the settlement date: Ask the agent what the seller’s preferred settlement date is. If you can match it, it can make your offer more appealing than a higher offer with an inconvenient date.
• Work with your agent: We are here to guide you through the process, provide advice on price, and negotiate on your behalf to get the best possible outcome.