Posts Tagged ‘Countersigning’

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House Buying Negotiating Tactics

There are plenty of house buying negotiating tactics out there - In New Zealand we love a bargain and we love to negotiate. The vendor of any house for sale will not hesitate to counter-sign an offer if it is not to their liking – so don’t be afraid to start house buying negotiations with a lower offer than you are prepared to pay.

There are exceptions to the ‘go in low’ theory and that is when you are involved in a tender, or ‘best offer’ situation – here you need to put your best offer forward.

Negotiating tactics come into their own when you are in a one on one negotiating situation with the vendor. So here are a few guidelines.

Don’t be influenced by the advertised price, or what the real estate agent is indicating, or even the RV - plan to pay what you feel the house is worth - using your experience of what you have seen to guide you (we have some suggestions on how to work out a houses market value) and offer accordingly.




Now, there is low and there is LOW. Don’t go too low - offer something that you would be pleased to get it at, but you feel is still fair, or at least in the ballpark. Sometimes negotiations can stall right from the beginning when an offer is just too low, and there is a feeling that no agreement will ever be reached.

If timing is something you want to use to your advantage - have a think about using a sunset clause.

Once you get that first counter-sign, you will have your first indication of what the vendor will accept. You may be partying on the inside as you are actually happy to pay this, but let’s just see if we can get them a bit lower. The meet in the middle technique in this situation is usually a good one - and often expected.

It is not always money that changes on a counter-signed agreement or that is up for negotiation - sometimes settlement date is a big issue and being flexible with this is as good as cash to some vendors. Find out if this is the case and use it in your negotiations.

Take time to think about it if the sale and purchase agreement comes back counter-signed you don’t have to respond straight away – give it a few hours or even sleep on it.

If the negotiations stall and you are still more then 10% away from the vendor’s price, then it is unlikely to happen. But once you in the 5% realm, then it would take some very stubborn people to let the negotiations fail.

If negotiations do fail and weeks later the house is still staying stubbornly on the market – if you are still interested – re submit you same last offer – the vendor may now be prepared to meet the market.

Need more help on making an offer – check out the Propertytoolbox house buying guide.

Making An Offer – The Highlights

Making an offer on a house is quite often done too quickly and not enough is known about the kind of commitment you are about to make.

An offer on a house quickly turns into a legally binding contract – you need to be aware of this – you will not be able to get out of a contract once it goes unconditional – so make sure you know what you are doing when you make an offer!

Making an Offer - the Highlights

In the Propertytoolbox Blog we have often delved into the subject of making an offer - here are our highlights:

1. Tendering on a House

We had a lot to say on this subject so we created a 3 part series on the tendering process. Firstly we covered off ‘Making a tender on a house - What is a tender' then we went into detail on 'Making a tender on a house - Putting in your tender’ and then we did the after match analysis in ‘Making a tender on a house - After your tender has been made’. Reading this series will let you in on the mysteries of the tendering process.




2. The Sunset Clause

A sunset clause is a condition that can be included by you or by the vendor in a sale and purchase agreement. They are not commonly used, but can be useful. In this article ‘Sunset clauses – What are they?’ we go over why and when you may want to use a sunset clause – and why the vendor may have included a sunset clause.

3. All About Countersigning

Countersigning is common – a very large proportion of house purchase negotiations involve haggling on price and conditions – and therefore will involve countersigning – especially in today’s market. This is actually one of the most common questions we get here at Propertytoolbox. So find out all about it in our ‘What is countersigning’ article.

The Propertytoolbox Home Buyers Guide

For more tips, tricks and advice – read on in our Home Buyers Guide. And if you are about to make that offer – head straight to our ‘making an offer on a house’ section.




What is Countersigning?

When you make an offer, or place a tender, on a house it will either be accepted, rejected, or you will start negotiations with the vendor. If you start negotiations you will presented with your original sale and purchase agreement countersigned. This countersigned agreement is usually the original contract you submitted with some changes made by the vendor, signed by the vendor. They may have changed anything on the agreement including the price, the settlement date or the conditions.

It is usual for these negotiations to be handled by the real estate agent and you should have any amendments to the sale and purchase agreement approved by your lawyer before signing - especially if the amendments are changes to the conditions of the contract, or parts of the standard contract have been crossed out. You may choose not to accept the changes made by the vendor, and can either countersign the agreement again (making your own changes) or end the negotiations.

Every time the sale and purchase agreement is amended and submitted to the other party it is, in law, the rejection of the previous offer and the making of a counter-offer. This amendment of the sale and purchase agreement is often referred to as countersigning. All changes to the agreement need to be initialled (this can mean a lot of signing!). Only when the countersigned document is accepted without any amendment and signed is a legally binding contract formed.

Just because you have countersigned and countersigned and finally agreed - this does not mean that the house is sold - you may still have conditions to work through before the contract goes unconditional - find out more about going unconditional.