Making a Tender on a House – After the Tender Has Been Made

Last post we talked about how to put in a tender, and before that we explained just what a tender is. This post is all about ‘after the tender’. Sometimes with all that is going on with just making a tender, once the tender has been submitted you find yourself saying - What now? Well here is what to expect.

What Happens After the Tender is in?

The tender(s) received are all kept sealed (confidential) and are not opened until after the close of the tender. The tenders will be opened with the vendor present, this may not be until a few hours after the tender closes.



The details of each tender will be explained to the vendor as they are opened. If there is more then one tender, the agent will usually document the key points of the individual tenders as they are opened on a separate piece of paper for the vendor to review.

The vendor can choose to accept any tender (not necessarily the highest one), reject all the tenders, or enter negotiations with one or more of the tenderers.

If the vendor does not receive the price or terms they want, they may choose to start negotiations. The submitters of the top tenders can be asked to re-submit a new offer, or negotiations can continue with one. This can mean that tender negotiations continue well past the tender time/date.

When Will I Hear if my Tender is Successful?

You should hear back from your agent within a few hours of the tender close time. The agent will tell you whether or not you have been successful. If you are, you now have a contract with the vendor and can start working through your conditions (if any). If your tender has not been successful, your deposit cheque will be returned.



Your agent may come back to you asking for an improvement in your offer (more money, less conditions), there may be another offer very close to yours, or your offer is the most favourable offer, but the vendor is after a bit more i.e. the vendor wants to enter into negotiations with you, the agent may even come back to you with a countersigned agreement.

Think through any changes in your offer carefully, remember you already put in your ‘best offer’ when you submitted the tender!

What If I Don't Hear Anything About the Tender?

If you do not hear within a few hours the result of the tender, contact the agent and discuss the situation. Agents often hold off contacting any of the tenderers until a contract has been agreed.

In this situation make sure you are comfortable with what is going on. Ultimately, if the tender deadline has past, and the vendor is in negotiations with another party, your offer is now considered unaccepted and you are free to pursue other house purchase opportunities.

What Happens After the Tender on a house
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The Propertytoolbox Home Buyers Guide

Just starting out on the house hunt? Not even sure if you can afford a house? Maybe a free chat with a mortgage broker could help you find out.



Making a Tender on a House – Putting in Your Tender

Last blog post we talked about just what a tender is.This post is all about putting in a tender. Next post we give you an insight to after the tender.

Thinking of Making a Tender on a House?

If you are interested in making a tender on a property, request a copy of the tender documents from the real estate agent. The tender documents can include any or all of: Never assume that the tender documents include all the relevant documentation with regard to a property. You still need to do your own house buying checks.

Ready to Put in a Tender?

If you have done all your checks, your happy, and you have decided you are going ahead with the tender, read all the tender documents carefully, and fill them in.

The sale and purchase agreement will need to be completed including adding your details, the purchase price, the deposit amount, the settlement date and any conditions. There may also be other documents to sign i.e. acknowledgement that the sale is by tender.

Get in Touch with Your Bank or Mortgage Broker

This is also a good time to run the details of the property you are interested in past your bank or mortgage broker. There may be some issues with the property that could affect the amount a bank is prepared to lend i.e. its condition, title type, location etc.

This can be quickly checked. It is always good to have some mortgage advice at this point and a good mortgage broker, or personal banker can help – take advantage of free advice from a mortgage broker!

Conditions in Your Tender

Deciding on conditions to have in your tender can be difficult. A condition free tender (a cash tender) is always going to be more attractive then a conditional tender if the money is approximately the same.

A tender process often gives you time to work through all your potential conditions prior to the tender date i.e. you can get a building inspection, valuation, LIM, and confirm you finance etc, but whether or not you choose to do this is up to you. Propertytoolbox has a few thoughts on the subject of conditional vs cash offers here.

Help with Your Tender From Your Property Lawyer

It is very important to get your property lawyer or conveyancer to look over the tender documents. In most cases, the vendor will have added conditions and deleted standard clauses in the sale and purchase agreement.

Your property lawyer can tell you the implications of these changes, change the wording of the tender conditions if necessary, add any of your own conditions and check the title.

Done all Your Checks? Time to Submit Your Tender

After all these checks have been done, and you are happy to proceed, the tender can be submitted (usually to the real estate agents’ offices), with a cheque for the deposit, before the tender closes. You will get a receipt to confirm that your tender documents & deposit were submitted.

Working Out Your Chances of Winning the Tender

With a tender situation you may be the only tender, or one of many. You may be able to gauge this by asking the real estate agents office how many copies of the tender documents were sent out, or you can ask the agent – neither is a reliable method.

The reality of a tender is that unless you have reliable information to the contrary, you have to assume you are in a competitive bidding situation and have to put in your best offer.

Houses Sold Prior to Tender

Be aware of the fine print as some houses are advertised for sale by tender (unless sold prior), which means the vendor is open to offers before the tender date. In this situation, you can choose to approach the vendor early or wait to the tender date.

Registering your interest in the property with the agent ensures that if an offer is being submitted prior to the tender date, you get a chance to put an offer in also.

Next Post – Part 3 – Making a Tender on a House – After the Tender Has Been Made Making a Tender on a House |

The Propertytoolbox Home Buyers Guide

The Propertytoolbox house buying guide has lots more helpful stuff for all you house hunters – head there now!

Making a Tender on a House – What is a Tender?

Welcome to the Propertytoolbox three part series on making a tender on a house. This first post explains just what is a tender. Next post, we talk about putting in a tender, and the post after that will be that all important subject of - what happens after the tender has been put in!



What is a Tender

A tender is a way of marketing and selling property. When a house is sold by tender, any offers (tenders) for the property are made by a set date and time (the tender date – which is set by the vendor) and tenders can be conditional offers. A vendor with a house for sale by tender is usually not open to offers prior to the tender date.

What is the Tender Process

The tender process attempts to encourage a competitive offer situation with the tenderers all being unaware of what the other is offering. Sometimes the ‘winning’ tender can be far in excess of any other tenders. The reason for choosing to sell a house by tender are many and diverse! But the most common are:

  • The real estate agent feels that there will be a number of people interested in the house, a tender is a good way to structure a multi offer situation.
  • The vendor wants a strong marketing campaign with a set end. The house will be marketed intensively over the days/weeks leading up to the tender date.
  • The property is unique and difficult to value – a tender lets the market decide the value.
  • A house being sold by tender can give the illusion that there is strong interest in the property – this is a clever marketing technique that implies a multiple offer situation when in fact there is likely to be little interest in the property.

Properties for Sale By Tender

Properties for sale by tender are usually not marketed with a price. However, a trend over the last couple of years has been the ‘tender reserve’ where a guide as to the minimum amount acceptable to the vendor is advertised.

What is the difference between a tender and an auction? A tender is different from an auction because of two crucial points:

  • The tender offer can include conditions (an auction bid is an unconditional offer).
  • When tendering you don’t know what other potential buyers of the property (tenders) are offering, unlike you fellow bidders at an auction.

Open and Closed Tenders

The terms ‘open’ or ‘closed’ tender can often be used – this can be a confusing! An open tender is a tender made available to anyone while a closed tender is where only selected individuals or companies are invited to submit a tender on a property.




Open tenders are the most common form of tender used for the sale of private dwellings. Often the term ‘closed tender’ is used incorrectly – most commonly the intended meaning of ‘closed tender’ when used with regard to residential property is that offers will not be accepted prior to the tender date – but this should be confirmed.

Next - Part 2 - Making a Tender on a House - Putting in Your Tender

What is a Tender on a House
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The Propertytoolbox Home Buyers Guide

Want to find out more about house buying? The Propertytoolbox house buying guide has all the basics – check it out. Want to bookmark a great dictionary for all those real estate terms – the Propertytoolbox definitions section is a fantastic reference.


Renting Versus Buying

It is the eternal question – renting versus buying. The conclusion that is nearly always reached is that over a long period of time it is better to buy a house if you can rather than rent.  If you are all set to give up renting and are off on the house hunt - check out our house buying guide for house buying tips.

We all dream of owning our own home but if your finances don’t allow it, your dream of a cosy bungalow in a leafy suburb may turn into a cold box on a main highway. Often, the standard of living you want for you and your family cannot be achieved by buying, so renting is the only way to go. This may be the only way of getting the location you want, the number of bedrooms you require, or getting into the right school zone. Not sure what you want in a house? We have some info and questions to help you get this nailed down in our 'what do I want in a house?' section - complete with a handy checklist that you can use to both make a list of 'wants' and also for a record of how a house scored when visited.

Many people consider rent as ‘money down the drain’ but the same could be said of interest on a mortgage… The success of your own home as ‘a good place to put your money’ really does rely on the house increasing in value over time.  In a lacklustre property market, house values can stagnate for years, especially outside of the main centres. So renting could be a good option in these times.

Consumer have a handy renting versus buying calculator that you can use to work out the basic 'cost of paying a mortgage' versus 'cost of paying rent' question. If you are not sure how much you can borrow, talk your bank or a mortgage broker. Propertytoolbox makes it easy to have a free chat with a mortgage broker - head this way!

Renting means your house deposit is in the bank earning interest, and any other money saved can be added – the power of compounding interest will mean that you are going to see significant increases in your bank balance! To work out what you can save over time by putting your money in the bank - instead of into buying a house - check out this Sorted calculator - if you calculate saving all the money that would have gone towards paying for the mortgage and the cost of ongoing house ownership (usually a lot more then just your rent) you will be surprised at how this can add up over time!

Also if you are not sure you are in it for the long haul – for some reason you feel you may only own a home for a short period of time, or may move often – renting could be a sensible choice as there are significant costs to selling. Often selling uses up any monetary gains made by the house increasing in value if it has only been owned for a short period of time. If the property market has been flat - then you can easily lose money!

Maybe buying a house is not for you right now, but that does not mean that it is not in your future. Keep saving towards a deposit and keep an eye on the property market. When your circumstances, money, and the state of the property market suit your house buying goals - go for it!

There is a Problem With the Building Inspection! What Should I Do?

The first thing you need to do when your building inspection identifies a problem is to work out how serious the problem is – a good person to question initially is the person who did your building inspection – you need to make sure that you fully understand the problem that they have identified.

Building Inspection Problem? Get a Specialist Building Advice

A building inspector is not an expert in all aspects of building so if a particular problem has been identified and the building inspector has indicated that they cannot tell you the extent of the problem or the cost to fix - it is best to speak to, or get quotes from, an expert in the area.




Say the piles are a problem – speak to a replier – they will be able to assess the extent of the problem and give you a quote for the remedial work.

Now you are in a position to start making decisions depending on your situation...

I Have a Signed Sale and Purchase Agreement

You may have gotten the building inspection as part of working through the conditions on a sale and purchase agreement. If you are not happy with the building inspection:

  • You are now legally entitled to cancel the agreement. To do this you tell your lawyer, and usually the real estate agent that you are not going unconditional based on an unsatisfactory building inspection. This can be a very hard decision to make as by this stage you have invested time, money, and emotion in the house, but in many cases it is the best decision.
  • You can re-negotiation the price of the house with the vendor. Go into negotiations with quotes for remedial work in hand – and bargain hard! Don't forget, it always pays to budget for some extras!
  • You can ask the vendor to fix what is wrong before you buy the house. Especially if the problem is fairly easy to fix i.e. a few hours work by a plumber or electrician this is often a good solution. If the problem is major – the vendor will rarely agree to fix it.
  • You may still be happy to proceed with purchasing the house at the agreed price - and you still can. Perhaps none of what was identified in the building inspection is a surprise, or you now know why the house was a reasonable price from the beginning! Before proceeding double check your numbers, make sure you are happy with the amount you are going to have to pay in repairs and renovation, and add a contingency of at least 10%.

If you and the vendor come to an agreement that involves the vendor having to complete work, or the price changes, or anything else at all, this needs to be formalised in the sale and purchase agreement by your lawyer.

Even if the work agreed is small (i.e. rubbish removal or repairing flashing) and seems insignificant to include – the reality is that it will not be done unless the vendor commits to it via the sale and purchase agreement.

I Haven’t Started Price Negotiations

If you have obtained this building inspection before even beginning negotiations on a house that you are interested in you have similar options:

  • You can walk away – the house is not suitable anymore – move on!
  • You can start price negotiations fully armed with exactly what is going on with the house. This is a much stronger bargaining position then if a price had already been agreed and a reduction was being negotiated. It is hard for people to comprehend that seemly overnight their house price has decreased significantly.
  • You can start negotiations from the beginning with a condition that lists things for the vendor to fix before you will settle on the house – again, if the problems are extensive - this can be a very short negotiation!

Sometimes the extent of the remedial work needed to fix a problem identified by a building inspection can not be worked out exactly by a ‘surface only’ examination by a building inspector or tradesman i.e. extent of rot given evidence of rotten weatherboards.

In these situations you will only be able to get an estimate of the cost of fixing – as a lot will depend on the extent of the problem and this will only be known when the remedial work starts.

It is up to you here to make a decision based on how much of a risk you want to take! In these cases, if you are not comfortable with what can potentially be an unknown, and large, expense it is best to walk away.

Building Inspection Problem - What To Do
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The Propertytoolbox Home Buyers Guide

The information you have just read about building inspection problems has been added to the Propertytoolbox house buying guide - An essential resource for house buyers in New Zealand. Find out more about house buying in New Zealand here.


House Maintenance Budget? Costs of Home Ownership…

Before you buy a home you need to know the full cost - and we are not just talking about mortgage repayments here! Yes, the mortgage is the most obvious and high profile cost of home ownership and usually is by far the largest one. But don't forget about rates, insurances, water, repairs and maintenance!  So just how much is this all going to cost?

The mortgage is usually the first figure calculated - and often dictates what the house buying budget is for many people. The biggest thing to consider here is the potential effect of an interest rate change. Currently interest rates are low, this almost certainly means that in the future your mortgage repayments are going to be higher. A good way to see the effect a change in interest rate has on your mortgage repayment is to have a play with a mortgage calculator - put in a variety of interest rates and see the effects. Here are some statistics for average bank 2 year fixed home loan interest rates that give you some numbers to play with:

Current 2 year fixed home loan rate = 7.1%

Average home loan interest rate for last 5 years = 8.0%

Home loan interest rate mid 1998 = 10%

Home loan interest rate April 2008 = 9.6% 

Home loan interest rate May 2003 = 6.7% 

With costs such as rates, insurance, and water you will be able to find out the exact amount these will be for the first year at least. These will go up year on year, sometimes by an amount far exceeding inflation, so factor this in. If you budget for an increase of 10% every year for these bills you are unlikely to be caught short.

As a bare minimum you should allow $1,500 or better yet 0.3 - 0.5% of the value of your house per year for maintenance. This does vary widely depending on the age, size and condition of your house and the building materials used. You may not use all of this maintenance money one year, and then have major expenses the next! But it will average out over time. Maintenance cannot be avoided, so budget for it!

Something you may not have thought about is all those extra bits and pieces that you are going to need to buy for your new home - new furniture, new appliances, what about plants for the garden? And are you planning any renovations?

How much you want to spend on renovation and new things for your house and grounds is up to you, but there is no doubting you will want to spend money, so establish a budget.

So when you work out how much you can afford to pay for a house, remember to add on all those extra expenses! A good rule is to add another 20-30% to your mortgage repayments to cover rates, insurance, water, small improvements, new stuff, and repairs and maintenance.

Ultimately you will have to come up with the money for all these extra things from somewhere - so take this into account when you are working out how much you can afford in repayments.

This information is part of the Propertytoolbox mortgage & money guide - This guide contains heaps of good info about the money part of home buying. Read more here.

The Real Estate Agents Authority Gets Down to Business!

The real estate Complaints Assessment Committee (CAC), part of the Real Estate Agents Authority (REAA) has made its first decision. A North Shore real estate agent was found guilty unsatisfactory conduct.

The daughter of a recently widowed woman complained after her mother received a condolence card from a real estate agent soon after her husband’s death that included a business card and a valuation of the mother’s house.

As a result of this solicitation, the real estate agent was found by the CAC to be in breach of the authority’s Code of Professional Conduct and Client Care for the manner she approached the complainants mother.

This is first of many assessments and decisions to be made by the CAC – there are another 200 complaints currently in the pipeline!

If you are buying or selling a home you should be aware that real estate agents are required to comply with the Real Estate Agents Act 2008. This Act introduces changes into the real estate industry that will benefit the buyers and sellers of houses.

One more obvious change brought about by this new Act is that buyers and sellers (before signing a sale and purchase agreement) must get a copy of the New Zealand Residential Property Sale & Purchase Agreements Guide from their real estate agent! This guide has all the essential info that you must know before signing a sale and purchase agreement.

This act also saw the creation of the REAA. The REAA launched in November 2009 with a focus of high standards of service and professionalism within the real estate industry, and to provide increased protection for buyers and sellers of houses. The REAA provides independent oversight of the NZ real estate industry and in conjunction with the Act hopes to promote public confidence in the industry.

The REAA replaces the Real Estate Institute of NZ (REINZ) and now handles licensing of people and companies working in real estate, investigation of complaints from consumers (the CAC), disciplinary action (the Real Estate Agents Disciplinary Tribunal), setting industry standards, and providing information to buyers and sellers of houses.

Want to know what to expect from a real estate agent – check out the Code of Professional Conduct and Client Care . This code was published as a result of the Real Estate Agents Act 2008 - those working in the real estate industry must follow this code and it is a reference point for discipline.

You can even check a real estate agents license details here, including checking whether they are licensed, finding out how to contact them, check the history of their licence and check their recent individual disciplinary record.


Should I Get a Valuation, Building Inspection, and LIM Before Making an Offer?

There is a cost to getting all of these reports prior to making an offer on a house - so why should you get them done?

Advantages of Getting Your Due Diligence Done Prior to Offering

The main advantage of having your valuation, building inspection and LIM done prior to offering is you have a full understanding of the house and its worth to you.

Another major advantage is that getting a valuation, building inspection and LIM usually means you can get unconditional finance approval for that house and can then choose to make a cash (unconditional) offer – this sort of offer is very appealing to vendors.




When a cash, unconditional offer is agreed and signed it is binding, the house is sold! A cash offer can give you bargaining power and you can often buy a house for a lower price with a condition free cash offer.

The Disadvantages...

The main disadvantage is the cost. Altogether, these reports will cost well over $1000 – just how much depends on the house itself. This money is potentially being spent on a house you may never buy.

In normal house negotiation situations (not a tender, or auction) putting your building inspection, valuation and/or LIM as a condition in your offer is standard. If a price is agreed on – then you get the reports (do your due diligence).

Houses for Sale By Auction or Tender - Due Diligence

In the case of an auction, if you want them, you need get your valuation, building inspection, LIM and unconditional finance prior to the auction as when you are bidding you are making an unconditional offer for the house; if you are the winner bidder – you have bought the house.

In a tender situation – adding a building inspection, valuation and/or LIM to your tender puts you well below a cash offer in the rankings. Your offer will need to be significantly higher then other tenders to be seriously considered in this situation.

So if you are serious about your tender – try to make as close to a cash offer as possible – this usually means doing your valuation, building inspection and/or LIM prior to the tender date and getting an unconditional finance offer so you don’t have conditions in your tender.

Due Dilligence You Can Do For Free

No matter what you decide to do, we recommend you read our before you put in that offer section, here we have 4 things you can do at minimal cost (free even) that will let you get to know the house you are thinking of buying. You may find that what you discover changes your mind, saving you the cost of hiring the professionals altogether.

Building Inspection Property Valuation and LIM Before Making an Offer - Due Diligence
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The Propertytoolbox Home Buyers Guide

Want more info and advice? Head to the Propertytoolbox Home Buyers Guide for all you need to know about buying a house in NZ. We have comprehensive information about property valuation and building inspection that can help with those pre-offer decisions.



Does The House Need Repiling? Repiling NZ Style…

What are Piles?

Piles are wooden or concrete posts under a house that form the foundations and are what many New Zealand houses sit on. The job of the piles is to distribute the weight of the house evenly across the soil underneath, and the house construction distributes the house weight as evenly as possible over the piles, ensuring the house stands straight and square.




Over time piles can rot away, causing them to fail, uneven distribution of house weight over piles can cause uneven settling, or movement of the ground under and around piles can cause piles to move.

Repiling a house NZ Style - Not a Firm Foundation

Not a Firm Foundation

Repiling a house NZ Style - 100+ Year Old Totara Piles

100+ Year Old Totara Piles

Has the house been repiled?

If the house was built in an era that used totara piles, an a examination of the piles under the house will soon determine if repiling has happened. New piles are either concrete or tanalised (H5) pine and are easy to spot.


Make sure to check out that all the piles have been replaced. It is quite common to see that only a few piles are new, often these are the piles around the edge of the house.

Why repile?

Sometimes all the piles move, but more often different piles move to different extents. This causes the house to twist, bow, and crack, resulting in damage. The piles may have stopped moving, or may be continuing to move - this all depends on the cause of the movement. To halt ongoing damage, re-piling is necessary. If you are planning renovations, it pays to start with firm foundations or you are going to end up with an inferior result.

About repiling

Repiling involves digging new piles down to a firm base and attempting to re-align the house on this new foundation. Sometimes it is obvious that repiling work is necessary. You may find yourself walking up hill and down around a house! Usually it is a lot more subtle.

To establish if the piles are a problem and to what extent, you will need to ask the experts. A house inspector is a good start. Make sure you get a good idea as to what is caused the need for repiling – it this likely to be an ongoing issue? i.e. poor soil, ongoing subsidence, risk of landslide. Can the cause be fixed? i.e. leaking pipe, drainage issues causing water to run under the house.

Repiling - The process

Repiling is a major job and different repilers repile use different methods - some cut holes in the floor to access under the house and some lift the entire house up. The technique used depends on a variety of factors with access being a big deciding factor and personal preference and tools and equipment available to the repiler having an influence too.

Repiling a house NZ Style - Lifting up the House

Lifting up the house

Repiling a house NZ Style - Cutting the Floor to Place House Raising Jacks

Cutting up the floor to place jacks

I am repiling - What else can I do?

Repiling opens a lot of opportunities to do other things to a house, it can be moved, lifted up and another level added underneath, or shifted somewhere else completely! The access that is gained under the house is also an opportunity to do things underneath that in usual circumstances are quite difficult - like underfloor insulation and working with the plumbing and electrical systems.

Repiling a house NZ Style - Access Under the House During Repiling

Access under the house during repiling

Repiling a house NZ Style - Moving a house during repiling

This house was moved across 1m during repiling

Repiling requires a building permit - other additions and changes to the house can be added to the same permit so it pays to plan in advance exactly what you want to do with a house before you repile so all your permissions can be gained at the same time - saving money - and also allowing you to organise access under the house for other works while the repiling is happening.

How much for a repile?

If you need to repile get a repiler in for a quote. Re-piling costs vary hugely and depend on many. Repiling costs start at around $12,000 - 15,000 (for a very small house, on the flat with fantastic access) and quickly climb when you start getting into soft soils, erosion problems and difficult access.


What is in a LIM?

A LIM is a comprehensive report containing everything the Council knows about a property or section and can include:

  • Valuation data
  • Yearly rates payable for the property.
  • If there are any unpaid rates.
  • Any charges for water.
  • Information about Building Permits and Consents for the property.
  • Any information in regards to whether it is a protected or historic building, or site, and if there are any protected trees.
  • Any Resource Consents issued for the property.
  • Any relevant planning issues or planning zones that impact the property.
  • Any Resource Consents issued in the immediate neighbourhood.
  • Information on subdivisions and developments affecting the property and the immediate area.
  • Drainage information relating to both private and public sewer and / or storm water on the property.
  • Special land features including potential erosion, avulsion, falling debris, slippage and possible hazardous substances.
  • Consents, certificates, notices, orders or requisitions affecting the land or buildings.
  • District Plan classifications that relate to the land or buildings.

For further details regarding what a council is required to provide you in a LIM, check out the Local Government Official Information and Meetings Act 1987.

The LIM will be up-to-date and contain a summary of all the information a council has on its files as of the day it is issued.

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