Real Estate Deadline Sale query

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#2657609 16-Feb-2021 15:54

mattwnz:
My concern is that someone else may do this and then the vendor accepts it, and I thennever had the chance to put in the offer, because the agent said that they aren't accepting offers before the deadline date. ....

Don’t worry about what anyone else might or might not do, you can only control what you can control.

If it’s a deadline sale, you can put in an offer at any time and the Agent MUST present it. You can make it a condition that the offer is confidential and you want a response in say 24 hours, this would ensure they present it lickety-split.

it’s completely irrelevant what the agent tells you; if it’s a deadline sale then they must present your offer.

mattwnz

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#2657615 16-Feb-2021 16:10

duckDecoy:

mattwnz:

Excluding the land value, the price I was going to offer was about 3500-4000 per sqm metre without being conditional on much.

That seems a lot higher than the cost to build https://www.canstar.co.nz/home-loans/otago-expensive-region-build-new-nz-home/

Could buying land and building be an option? It might mean waiting longer though.

You are right. But the advantage is no waiting, and not having to deal with the building process etc, and there does appear to be a waiting list for building due to the lack of builders ATM. So would probably be talking about a years wait at least.

tdgeek

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#2657659 16-Feb-2021 16:17

mattwnz:

You are right. But the advantage is no waiting, and not having to deal with the building process etc, and there does appear to be a waiting list for building due to the lack of builders ATM. So would probably be talking about a years wait at least.

Possibly quite true. Id visit a couple of name brand builders, see what prices are like, available subdivisions, wait time. It may take longer but how long will it take to find your home? The pluses are you can choose the size, layout, face the sun, carpet, kitchen and so forth. 10 year guarantee. NEW. You might sign up tomorrow, yes there is a wait but you are sorted. Plenty of time to prepare, etc.

billgates

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#2657675 16-Feb-2021 16:57

tdgeek:

Possibly quite true. Id visit a couple of name brand builders, see what prices are like, available subdivisions, wait time. It may take longer but how long will it take to find your home? The pluses are you can choose the size, layout, face the sun, carpet, kitchen and so forth. 10 year guarantee. NEW. You might sign up tomorrow, yes there is a wait but you are sorted. Plenty of time to prepare, etc.

We bought section in September 2018. Went to architect who was incompetent to say the least dealing with council and replying to their RFI. Architect submitted consent December 2018 with key details missing. Council rejected consent by April waiting for RFI forever. Re submit consent and finally approved 3 months later in July.

Meanwhile in between this we had tendered to 3 builders. Builder 1 we wanted to go with was unavailable for atleast 5 months. Builder 2 said they could start in 3 weeks but started build almost 6 weeks later in September 2019. COVID hit with lockdown in March and houses was completed and handed over in August 2020. Almost 2 years.

Builders are extremely busy and if council throws a spanner in the works to your consent then that makes it even more stressful. On the upside like you said you get a new house and get what you want but is the wait worth 2 years? We decided to build in the end because eventually we gave up after not winning 2 auctions and 2 pre-offer conditions. House market is crazy and some cashed up buyer was along offering an extra $50 to $100k because they too needed a home so we went build route in the end. Atleast you knew roughly how much it would cost you.

Do whatever you want to do man.

Paul1977

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#2657680 16-Feb-2021 17:06

mattwnz:

Excluding the land value, the price I was going to offer was about 3500-4000 per sqm metre without being conditional on much. This is above the homes top estimate. But I know the agent expects to get even more than this. The new RV has also just come out and is inline with the homes middle estimate.

What are you basing the land value on? The RV land value? In this market I'd think the RV for the land is just as meaningless as the RV for the house. The only way to know what the land is worth is to see what other sections are going for in the same area, which is likely impossible if you aren't looking in a brand new subdivision.

Handle9

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#2657682 16-Feb-2021 17:13

BlinkyBill:

According to settled.govt.nz you can make an offer, with conditions you like, at any time and the agent must present it when offered. You should have a condition that your offer is confidential to you and the vendor, so the agent doesn’t use it to boost the price.

Realistically, in this market your offer will be compared to other offers at the deadline. The ‘unless sold prior’ allows the vendor to sell early if they want, but in this market why would they?

A unilateral confidentiality clause is worthless. The agent and vendor aren't bound by it - they have no obligation to you unless they sign it.

mattwnz

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#2657721 16-Feb-2021 18:02

Paul1977:
mattwnz:

Excluding the land value, the price I was going to offer was about 3500-4000 per sqm metre without being conditional on much. This is above the homes top estimate. But I know the agent expects to get even more than this. The new RV has also just come out and is inline with the homes middle estimate.

What are you basing the land value on? The RV land value? In this market I'd think the RV for the land is just as meaningless as the RV for the house. The only way to know what the land is worth is to see what other sections are going for in the same area, which is likely impossible if you aren't looking in a brand new subdivision.

That is a good point. In my town there are quite lot of subdivisions and in this case there is a new subdivision directly across the road. So have been basing the price on those sections as well as others in the town for the same sized land. But as the RV is late 2020 the RV land value is only slightly less than what other similar priced sections are sellingfor. But the problem with some subdivisions is you are forced to use a particular franchise builder. So some will advertise a land price on trademe, but you then enquire about the land and find out that one of the conditions of sale is that you have to build a new house using a particular franchise builder within 2 years. Not all are like that but some are.

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mattwnz

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#2657723 16-Feb-2021 18:06

billgates:
tdgeek:
Possibly quite true. Id visit a couple of name brand builders, see what prices are like, available subdivisions, wait time. It may take longer but how long will it take to find your home? The pluses are you can choose the size, layout, face the sun, carpet, kitchen and so forth. 10 year guarantee. NEW. You might sign up tomorrow, yes there is a wait but you are sorted. Plenty of time to prepare, etc.

We bought section in September 2018. Went to architect who was incompetent to say the least dealing with council and replying to their RFI. Architect submitted consent December 2018 with key details missing. Council rejected consent by April waiting for RFI forever. Re submit consent and finally approved 3 months later in July.

Meanwhile in between this we had tendered to 3 builders. Builder 1 we wanted to go with was unavailable for atleast 5 months. Builder 2 said they could start in 3 weeks but started build almost 6 weeks later in September 2019. COVID hit with lockdown in March and houses was completed and handed over in August 2020. Almost 2 years.

Builders are extremely busy and if council throws a spanner in the works to your consent then that makes it even more stressful. On the upside like you said you get a new house and get what you want but is the wait worth 2 years? We decided to build in the end because eventually we gave up after not winning 2 auctions and 2 pre-offer conditions. House market is crazy and some cashed up buyer was along offering an extra $50 to $100k because they too needed a home so we went build route in the end. Atleast you knew roughly how much it would cost you.

Yes that is one thing I am afraid of, and is why many people do prefer to buy existing. It wasn't that long ago when building was a lot more expensive than buying an existing property, but not so much now depending on location and the spec of the house.

snnet

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#2657778 16-Feb-2021 20:03

sounds a lot like "this house is for sale BUT YOU CAN'T BUY IT" in tl;dr

Don't think I'd bother!

freitasm

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#2657956 16-Feb-2021 22:24

Removed @BlinkyBill completely off topic reply and quotes of that.

Keep your manners folks. Don't break the "don't be a dick" rule.

mattwnz

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#2657966 16-Feb-2021 22:45

snnet:
sounds a lot like "this house is for sale BUT YOU CAN'T BUY IT" in tl;dr

Don't think I'd bother!

Yes, but that is the market at the moment. It is crazy, but there are so many buyers and hardly anything on the market. So agents sales techniques change to reflect this. Great for sellers, but bad for buyers.

Paul1977

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#2658039 17-Feb-2021 09:06

mattwnz:

That is a good point. In my town there are quite lot of subdivisions and in this case there is a new subdivision directly across the road. So have been basing the price on those sections as well as others in the town for the same sized land. But as the RV is late 2020 the RV land value is only slightly less than what other similar priced sections are sellingfor. But the problem with some subdivisions is you are forced to use a particular franchise builder. So some will advertise a land price on trademe, but you then enquire about the land and find out that one of the conditions of sale is that you have to build a new house using a particular franchise builder within 2 years. Not all are like that but some are.

In that case you'd expect your land estimate to be pretty close. But in a new subdivision there will also probably be a lot of covenants. You also need to factor in landscaping costs for a new build as, which are not insignificant. Also curtains - these aren't cheap either!

But assuming a new 180m2 house with a build price of $2500/m2, compared to offering $4000/m2 on an existing 180m2 house... is a $270,000 difference. That difference would more than cover curtains and landscaping, and leave a lot left over.

Or will builders just be increasing their prices parallel to the market for existing houses?

Batman

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#2658111 17-Feb-2021 10:48

Most likely build cost has already gone up to match

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#2658176 17-Feb-2021 12:52

trig42:
In this market, the agent is doing the right thing.

They do have to present the offer, but they are working for the vendor, not for you. Their job is to maximise the selling price. They will probably advise the vendor that this is only an opening offer, and to wait until the deadline for a better one.

I was chatting to an agent who has been a family friend for over 40 years, and she was telling me that the market is crazy at the moment, and she prefers to do a full 3-4 weeks marketing and open homes and go to auction (or deadline). She estimates that in this area (outer Auckland) she is getting 2-300k more per house (on an average sale price of 1.2-1.6m) than the agents that are going straight to the vendors (who really know no better and are happy with the offer) with the first offer. This is an agent is is not 'desperate' for a sale, and is working for the vendor, rather than herself. What this is doing in this market is artificially lowering the sale prices, thereby perpetuating lowering vendor expectations.

Yeah this

https://www.nzherald.co.nz/business/investors-rushed-in-to-beat-lending-restrictions/PFKD3T7OXWRVE2FZFYDAJIX7PI/

mattwnz

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#2658609 17-Feb-2021 17:31

Batman: Most likely build cost has already gone up to match

Not sure if build costs have gone up anywhere as much as house prices. Probably more in line with inflation. I have seen new build packages over the last year raise their price by 20k for the same package.

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