Returning from lockdown, I was as curious as anyone to see what state the market was in. Truthfully, the interest levels from buyers in Wellington don’t seem to have changed markedly compared to pre lockdown. One property I am selling has garnered over 36 inquiries in only 4 days on the market. This has meant that buyers are putting in a lot more thought around the offer they are putting forward in hopes to be successful. It could be valuable to read this piece in the hopes of being the person to submit a winning sale and purchase agreement.
Many of us have been in an unenviable position. We spend hours (literally) researching a home we like or, heaven forbid, have fallen in love with. Money is quickly shelled out on solicitors advice and, depending on the information available, a LIM report/council records, building advice and other due diligence.
The day comes to submit your offer. Anxiety and excitement levels are high. Anxiously, we wait for the call from the agent with the good or bad news. Time seems to stand still as we wait, and wait, and wait. The call comes… we try and steady our heartbeat. Only to find it is not the news we were wanting to hear.
Personally, my most depressing part of selling property is making the call to a prospective purchaser who has been unsuccessful. I appreciate all the time, money, and effort invested for no reward. Following, I will attempt to outline ways in which you can make your offer more attractive and hedge the bets in your favour when trying to submit a winning sale and purchase agreement.
Getting price right
This is number one on the list for a reason. Money talks. We all want to be successful with our offer but fear paying an exorbitant amount more than needed. I started writing about the methods and processes you can undertake to feel comfortable with putting a figure down on paper. But realised that it was essentially a blog on its own. So please look for a follow up on this topic specifically. In there interim click here to read a basic blog I wrote some time ago on the topic.
Ask the right questions
This will be part of my follow up blog about getting the price right, but I thought that it would be prudent to briefly mention it here also. When you make contact with the agent (this could be via phone, email or actually at the property) be sure to ask questions like:
- Are you able to briefly talk me through any recent sales in the vicinity and whether you think they sit higher or lower than this property in value?
- What are the interest levels like in this property? How many potential buyers have been through? Have there been many tender/offer documents requested?
- Has there been anything disclosed to you that a buyer should know about this home? This question may help unearth something you need to do due diligence on or factor into your price.
- What information or reports are or will be available to view?
Most agents will answer these questions succinctly and accurately.
Play it cool
If you can help it, don’t tell the agent how absolutely besotted you are with a home. You know when you went on a first date and liked the person but played it cool? Treat this as a similar situation. Don’t “come on too strong”. Coming on strong with a property gives the agent confidence that they have interest, which in turn gives them confidence when talking about the property to other potential purchasers. People want what others want. Keep them on their toes right up until offer time.
Make time just before the close of tender/deadline to meet with the agent to fill out the offer
What are the benefits of meeting with an agent just before tender close or offers may be presented? Two main benefits – as above, you will keep the agent on their toes and as much information as possible close to your chest for as long as possible. You will also be in a position to probe at a time when the agent should be in the most informed position possible. Feel free to ask inquisitive questions at this appointment. Obviously you are trying to garner as much information as you can. Use similar questions to ones I have outlined under the “ask the right questions” heading.
The agent will only answer within the scope of what they are allowed, but hey you don’t know if you don’t ask.
Do you have a lot of conditions? Consider using a due diligence clause
Some may disagree with this, but I have brought multiple properties, including one sight unseen, with a single due diligence clause in the further terms of sale. This has worked well if I haven’t had time to do a lot of research before offering. Put yourself in the seller’s shoes, you receive an offer which was subject to:
- Building inspection – 5 working days
- Finance – 5 working days
- LIM – 5 working days (assuming it is already available)
- Insurance – 5 working days
- Valuation – 5 working days
- Toxicology report – 5 working days
OR you recieve an offer that was subject to:
- Due diligence – 5 working days
I have personally found that the single due diligence clause is more palatable to many owners when I am trying to submit a winning sale and purchase. Yes, it gives a wide scope for the due diligence you wish to carry out. But inform the agent in on what you plan to do so they can relay to the owner when presenting offers, and I think you will find it may receive a more positive reaction.
Enquire about settlement date and don’t skimp on the deposit
This usually isn’t the be-all and end all when an owner is looking at accepting an offer. It is common to nip back to the purchaser and ask for some flexibility around this if the price and conditions are acceptable. But to hedge your bets, if there isn’t already a preferred settlement date in the contract ask the agent if the owner has a preference.
Similarly, usually the deposit amount isn’t a deal breaker but eyebrows could be raised if it is particularly low. It doesn’t have to be 10% but ensure that it is healthy enough that it gives an owner comfort.
Attach a genuine letter
I know most of us have heard about including a letter about yourself with the offer. You know, the old attempt to pull at the heartstrings. I haven’t seen a letter ever bridge a giant chasm in price during my time in real estate but I have seen a letter assist in the difference between an offer being accepted and not when they are close. If you do write a letter when trying to submit a winning sale and purchase agreement make sure you add a picture or two. Use it as an opportunity to create a connection and help your success.
Check contract for any pre-inserted conditions
There may be pre-inserted conditions in the contract put there by the agent or the agents company that you need to cross out should you not want them. These are often missed as they are typed in and can just look part of the contract. This may be even more prevalent in our current world environment. A clause subject to insurance is a good example. Please dont make sure you miss out on a property because the agent assumed you were conditional but you assumed that you weren’t!
Do not put untoward demands on the contract
Please try and refrain from playing hardball with your conditions. The last thing you want to do from the outset is get the owners back up. Trust me, it makes it a lot more difficult. An example would be putting a restricted timeframe for acceptance on your offer, including out of the box chattels or making the number of working days too long. Please touch base with me if you would like some assistance in this regard or to chat through your conditions.
Do I need to be unconditional?
If you are able to get yourself into a position where your offer is unconditional, that is a very smart thing to do. I have seen many offers that were not the highest accepted by the owners for the sake of closure. An unconditional offer will often be given the chance to negotiate even if it isn’t the highest. In our current climate I suspect that an unconditional offer could hold even more weight than usual.
If your offer is unconditional, clearly and boldly write “THIS IS AN UNCONDITIONAL OFFER IN ALL RESPECTS” in the further terms and conditions
This may seem a little strange of a suggestion. But years ago I was presenting offers to a single lady who was very anxious. The campaign had her wrung out and the last thing she felt like was spending another week or so waiting for conditions to confirm. One particular sale and purchase agreement had “THIS IS AN UNCONDITIONAL OFFER IN ALL RESPECTS” written in bold in the designated further terms of sale box. Afterwards, she confessed when she saw this she felt a wave of relief knowing that if she signed that offer her home would be sold.
Use uneven numbers, cross outs and add a smidge
This is exactly as it reads. Uneven numbers and cross-outs show that you have given the price some serious consideration. $791,500 looks a lot more thought through than the round number of $790,000. If an owner is considering counter signing your offer, my experience shows they will counter higher on the $791,555.
Add a little, $799,000 is all well and good for pricing but not great for the offering process. $801,500 is only $2500 more (or around $67 per year with the current interest rates) but looks a lot more appealing on paper.
Have you been mentally increasing your offer in your head as you fall more in love with a home? Why not give the owner a visual representation of your thought process. Don’t be afraid to write a couple of lower numbers down you were considering, and cross them out before writing in your final number. This again shows how much thought you have put into your offer and potentially how much you are stretching yourself.
Get in touch
Thank you for reading about ways in which to submit a winning sale and purchase agreement, if you have any other questions don’t hesitate to get in touch. I am looking forward to following up with you all around more advice when offering and a lot of information around the all-important negotiation.
