Month: September 2019
We have noticed a large increase in the number of property sales put to the market by deadline sale of late. So what is a deadline sale and how does it compare to the sale of a property by auction?
In previous articles on this conveyancing lawyer blog, we have talked at length about our offer to review auction packs that no obligation to our clients. If you are unsuccessful and do not end up as the successful bidder we do not send you an account. It is that simple!
With a sale by auction, you are generally provided with as much information as possible about a property by the owner and their agent. This will traditionally include a Land Information Memorandum, a title search, copies of any easements or encumbrances affecting the title, often a building report and in Christchurch at least, all information relating to any earthquake claims, the settlement of those claims and repairs and how they have been completed.
So how does this differ from a deadline sale? Similarly to an auction, the owner will decide with their agent to accept offers by a certain predetermined date (unless sold sooner). Much information is then provided by the vendor similar to the situation where a property is listed by auction. This will typically include a Land Information Memorandum, all information regarding earthquake damage and repairs and sometimes a building inspection report also.
The significant difference with making an offer on a property offered by deadline sale is that unlike an auction, you can insert conditions for your benefit as the purchaser. So, even though you are able to do some of your due diligence in advance you can still make your offer subject to the likes of a finance condition, a Land Information Memorandum condition and perhaps a building report if you like.
From a vendor’s point of view of the hope is that if you are happy with the information in the LIM which is provided, you might make your offer without a condition requiring you to obtain a Land Information Memorandum.
Often a deadline sale will end up in a multi-offer situation where more than one party wishes to make an offer by the deadline. In that situation where there is an agent involved, you should be asked to sign a multi-offer form acknowledging that you know that multiple offers are to be presented to the vendor. When this happens you will get one chance to put in your best offer and if successful, you will never know how much more you offered then the next highest bidder for the property.
In a multi-office situation, buyers will often strive to make their offer as clean as possible by doing as much of their due diligence as possible based on the information provided and making their offer as clean as possible. In other words, with as few conditions as possible to make their offer attractive to the vendor. In such circumstances, a vendor might accept an offer slightly lower than the highest offer if it is subject to no conditions almost no conditions.
The last thing you need to know about deadline sale is that often when an offer is received and that offer is at a level at or close to the selling price required by the vendor, the deadline will often be brought forward. If at that stage you are the only party making an offer but there are other people interested, the agent will go back to the other interested parties and let them know that there is an offer and that the deadline will be brought forward.
If that happens then the agent will tell you that you are in a multi-offer situation and usually advise you that you might consider whether you want to increase your initial offer because in those circumstances you will only get the one chance. How much you offer will obviously depend on how much you like and want the property.
As your Christchurch conveyancing lawyer, our offer with deadline sale properties is the same as our free auction Pack review for those going to auction. We will review the deadline sale information provided and report to you and if you are unsuccessful there will be no cost to you. To avail yourself of the service simply go to the contact page on this website and send us your details and a short message. We will be in touch with you promptly.
The Reserve Bank surprised many by dropping the Official Cash Rate (OCR) by 50 basis points in August. Many believed it would be 25 basis points, so it came as a bit of a surprise.
Initially the banks only moved their floating rates and it took about a week before we saw the fixed rates they were offering begin to change. In the end customers received approximately 30 basis points off the older fixed rates that were being offered. A typical 1 year rate at the moment (if you have at least 20% equity in your home) is 3.55%.
There is likely to be a number of further drops to the OCR although there may only be one more in 2019. Some commentators are placing the eventual low at around .25% (Currently 1%). However how much of these further drops are passed onto the consumer remains to be seen.
The best term to pick at the moment is the 1 or 2 year term. I favour the 1 year term the most as it gives the mortgage holder the ability to take advantage of future drops on the OCR.
If you would like a review of your mortgage or help with your next loan rollover feel free to contact Scott Miller on 021 343 648