The Buyer’s Guide to Auctions
What is an auction?
An auction is a method of selling a property through the process of public negotiations. Purchasing property through an auction allows you to publicly negotiate the price, which helps ensure you are paying the true market value for the property at that time.
How Barfoot & Thompson makes sure you pay the true market value
Barfoot & Thompson guarantee our buyers that our auctioneers never make bids on behalf of clients, accept bids they believe to be made on behalf of clients, or knowingly accept any bid that is not genuine. It doesn’t matter what you call them, they aren’t real bids, which is why we do not allow that practice at Barfoot & Thompson auctions.
Registering your interest
If you are interested in bidding for a property, make sure you register your interest formally with Pukekohe Property. That way, if a pre-auction offer is made, you will also be contacted and given the opportunity to submit your best offer.
Buying before auction day
In most cases you can place an unconditional offer prior to auction day. If the offer is at an acceptable level to the client, all other registered buyers will be contacted and given the opportunity to submit a bid by bringing the auction forward.
Your salesperson will assist you with your written offer should you wish to submit before auction day.
Before bidding at an auction you need to:
Have read and understood the Auction Particulars & Conditions of Sale. Be in a position to bid on a cash unconditional basis. You can organise pre-approval through your bank or mortgage broker and then bid up to a price you are prepared to pay. Be able to pay 10% deposit (by personal or bank cheque) and sign the contract as soon as the auction is over.
The Buyer’s Guide to Sale and Negotiation
What does ‘by negotiation’ mean?
Selling by negotiation allows a client to list their property either with;
- Only one agent (sole agency).
- Several agents (general agency).
The property will then be placed on the market with an asking price, or “by negotiation” with no fixed asking figure.
Offers are invited from customers who have inspected the property.
Making an offer
There are two types of offers:
Having one or more conditions to be met within a specified period (e.g. subject to a building inspection)
Your salesperson will guide you through the process of submitting your offer in writing, paying the deposit and settlement/possession dates.
The Buyer’s Guide to Tenders
What is a tender?
A real estate tender is a method of buying a property through the process of private and confidential offers made by a set deadline.
Understanding the tender process
Offers need to be submitted on the standard Tender Document (talk to us to get a copy of this) and deposited at the specified closing location by the tender deadline. Barfoot & Thompson will hold your offer secure until the deadline.
All tenders are opened at the same time in the presence of a Barfoot & Thompson Manager or Auctioneer. Although vendors reserve the right to negotiate with any Tenderer, in most cases a decision is reached on the Tender day. If your Tender is accepted you are legally bound by the terms and conditions of the tender document.
Presenting your best offer
Purchasing by tender gives you one chance to present your best offer to the property owner. Unconditional, cash tenders are traditionally the most attractive offers for the vendor, but conditional offers may also be made. To help you determine your offer, your salesperson can offer you information about property sales in the area and you can obtain information from other sources, for example Quotable Value or a registered valuer.
Registering your interest
If you are interested in submitting a tender for a property, make sure you register your interest formally with a Pukekohe Property. That way, if there is any change of circumstance we will be able to contact you.
Properties for sale by tender will not be sold prior to the deadline.
Any property marketed as a tender by Barfoot & Thompson is a “pure” tender, where the property cannot be sold before the tender closing date. This means that you are able to carry out any due diligence you need to with confidence that the property will not be sold before the deadline.
- Tender documents are different from normal Sale and Purchase Agreements, so you may wish to seek legal advice before submitting your Tender.
- If you are planning to make a conditional offer based on finance, or selling a home, you may want to think about organising finance or bridging finance so you can make your offer unconditional. This will make your offer a lot more attractive for the seller.
Before submitting a tender you need to:
- Have read and understood the Tender Documents. Insert any conditions or variations to the settlement date you want to add into the Tender Document. Barfoot & Thompson has a range of standard clauses to cover common situations, but you may wish to seek assistance from your solicitor.
- Be able to pay 10% deposit (by personal or bank cheque) as soon as your tender is accepted.
- Understand that you are legally bound by your tender as soon as it is accepted.
The Buyer’s Guide to Mortgagee Sales
What is a mortgagee?
A mortgagee is a party, normally a bank, institution or finance company, sometimes even an individual person, who has lent money to another party (the mortgagor) and has taken security for that loan over a property owned by the mortgagor.
What is a mortgagee sale?
A mortgagee sale is when, as a result of the mortgagor not meeting their obligations under the terms of the mortgage, usually in not meeting their mortgage repayments, the mortgagee exercises its power of sale by selling the property to recover its debt, after completing a legal process.
How is that done?
In the majority of cases the property is offered for sale by public auction or tender.
Is a mortgagee auction or tender different from a normal auction or tender?
As the mortgagee is not the owner of the property, it offers the property for sale under different terms and conditions. For example, most mortgagee sales are not offered for sale with vacant possession and do not include chattels in the sale. The mortgagee generally does not give warranties regarding building permits, Code of Compliances or boundaries. These are just some examples.
The full sale conditions are contained in the auction particulars and conditions of sale or the tender documents and prospective purchasers should obtain a copy of these from the real estate salesperson and familiarise themselves with the conditions of sale before attending the auction or submitting a tender. If they do not understand any of these conditions or are unsure on any matter, then they should consult their solicitor.
It is also the customer’s responsibility to have researched the property fully and satisfied themselves in all respects with regard to the property.
Is there a reserve set at a mortgagee auction?
The mortgagee will set a reserve with the auctioneer, just prior to the auction. This reserve is kept confidential between the mortgagee and the auctioneer and is not made public.
Can a mortgagee sale property be withdrawn prior to auction or closing of tenders?
The mortgagor has the right to redeem or repay their mortgage, on terms satisfactory to the mortgagee, prior to the property being sold. As such, a number of properties offered for sale on behalf of a mortgagee are withdrawn from sale.
To find out more about bidding at a mortgagee auction speak to your salesperson.
How do I find out what properties are being offered for mortgagee sale by Barfoot & Thompson?
On this website, you can use the Search Panel on the home page and select to show only mortgagee sales, or click the link to all current mortgagee sales listed under useful resources. You can also find them through the Herald Homes lift-out section in each Saturday’s New Zealand Herald and through local Property Press or other local community newspaper publications.
Before you purchase your next property, we recommend you consider viewing or commissioning specialist reports.
When purchasing a property it is common practice to purchase a LIM Report (Land Information Memorandum) from your local council. A LIM provides information on special land features or characteristics (e.g. erosion, hazardous substances), storm water and sewerage, rates owing on the land, title, future plans about the area (e.g. zoning, building heights), builders’ certificates issued, use to which the land may be put and any other information the local council considers to be important.
It can take up to 10 working days to obtain a LIM report when the council is busy, so you may need to factor this into your Sale and Purchase Agreement. You may be able to request an urgent LIM. Each council will charge for a LIM Report. The charge will vary depending on the council so contact them direct for up to date pricing.
A valuation report on a property is recommended as the GV (government valuation) or CV (current valuation) may not provide a true market price for the property. These can be commissioned from independent registered valuers or from Quotable Value New Zealand www.qv.co.nz.
Builders and engineers’ reports
Registered builders and engineers can give a report on a property which helps confirm the house is in sound condition and not likely to be subject to any structural problems.
Contact your local master builders association www.masterbuilder.org.nz, the building research association www.branz.org.nz, your local authority or Institute of Professional Engineers www.ipenz.nz to ask for a list of qualified builders and engineers.
Arranging a Mortgage
A mortgage can be arranged directly through your bank, a financial institution or you can contact a mortgage broker. To work out how much you might be able to borrow or how quickly you can pay off your loan use the BNZ loan calculators. To find a mortgage broker, a good place to start is the New Zealand Mortgage Brokers Association. www.nzmba.co.nz.
Finding a Solicitor
Finding the right lawyer is an important part of the buying and selling process. If you don’t already have a lawyer, seeking advice from friends is a good place to start. Otherwise, contact the Auckland District Law Society on www.adls.org.nz or phone 09 303 5270.
The Overseas Buyers Guide
If you live outside of New Zealand and are considering purchasing real estate in Auckland or Northland, it’s likely you have some questions. Below, you will find some commonly asked questions and answers that may help you.
How do I find what properties are available?
Barfoot & Thompson sells more Auckland property than any other real estate company, so this website is a good place to start. For properties elsewhere in New Zealand you could also try www.realestate.co.nz, www.trademe.co.nz or www.nzrealtors.co.nz.
I don’t really know Auckland at all. How do I know what areas are most suitable to my needs?
Every property listed for sale with Barfoot & Thompson contains detailed information about the area. Simply click on a home that meets your criteria and then click on the ‘suburb Info’ tab.
How can Barfoot & Thompson assist overseas buyers to buy property in NZ?
Barfoot & Thompson specialise in Auckland and Northland real estate so our salespeople are able to offer knowledge about important amenities such as shops, schools and recreation in order to help match you with the perfect property.
Barfoot & Thompson are not franchised so our salespeople have access to every listing in our system and any salesperson can help you buy property in any part of Auckland. This is particularly useful if you prefer to deal with someone who speaks your own language and who you can communicate more confidently with.As Auckland’s largest real estate company, selling around one in every three homes, we’ve helped many buyers into their dream property. We are confident we can help you too.
Are there any restrictions for overseas investors buying property in New Zealand?
The New Zealand Government’s foreign investment policies are administered by the Overseas Investment Office (OIO), whose prime role is to assess applications for consent from foreigners who intend making substantial investments in New Zealand.
For more information on this process and the OIO, visit the Overseas Investment Office www.linz.govt.nz/regulatory/overseas-investment
How do I learn more about New Zealand?
See the list of websites below which can assist you with learning about New Zealand in more detail.