When you find a house in your price range that ticks all or most of your boxes, you may be ready to put in an offer.
This needs to be formally written up on a sales and purchase agreement, although some real estate companies have other processes.
You would normally do this by contacting the real estate agent and setting up a time to write up an offer with them, or alternatively requesting a copy of the sales and purchase agreement and writing your offer up with your lawyer.
Getting your lawyer to look through the contract before you sign it can be advised, as it is a legal contract.
A Conditional Offer – this is most common
You do this when you still have some due diligence to complete before you can ensure this is still the right property for you.
Waiting to complete your due diligence until you’ve had an offer accepted can be more time and cost effective.
The conditions you put in your offer give you opportunities to exit the agreement if you can’t satisfy these in time.
The less conditions you put in an offer the more attractive it can be and vice versa.
If you need a mortgage to buy the property, you must put finance in as a condition. Even though you might already be pre-approved, the bank must also approve the property you are buying. This could involve a registered valuation or other reports before they approve of the property.
I usually recommend my clients put these 3 conditions in their offers,
- Finance
- Building Inspection
- LIM – Land Information Memorandum
EQC can often be another common condition for Christchurch properties. You can add or subtract whatever conditions you like; however, the vendor doesn’t have to accept your offer.
You also need to decide how many working days you need to complete your due diligence.
How many days you require will depend on whether or not you’re already pre-approved, what conditions you have, what professionals you require to get involved and how busy everyone is.
If you’re pre-approved in a quiet market, you might only need 5 working days.
If you’re not pre-approved and the property market is busy, you may need 15 working days.
Always ask your Mortgage Adviser or finance person how many working days you require. If you run out of time to complete your due diligence, you can always request an extension. This will often be granted if a better offer has not already been received.
Once you and your lawyer are happy you have satisfied all of the conditions, you can instruct your lawyer to confirm the contract and go unconditional. This is when you’ll usually pay the deposit.
An Unconditional Offer
It is what is says, there are no conditions on your offer.
An unconditional offer is more attractive to the vendors than a conditional offer.
If your offer is accepted, the contract is confirmed and you pay the deposit. You should do all of your due diligence prior to putting in an unconditional offer, including getting the bank to approve your finance for that specific property.
When you bid at an auction your bid is unconditional, thus prior to bidding at an auction, you must also complete all your due diligence.