Real estate, post level 4

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#2746285 18-Jul-2021 17:36

mattwnz:
Traditionally people would buy a property first and put a condition on the sale that it is conditional on them selling their property. But some real estate agents encourage buyers to not put conditions on properties these days, which imo is risky for buyers unless they do a lot of due dilliegence before hand, which is expensive if you miss out anyway.

If I were selling a house and a buyer had a condition on their offer subject to selling to their own house I would simply ignore it a turn my attention to the next offer. This isn't the UK, we do not entertain the idea of "chains" in the sale of houses.

If you want to buy my house and still have another house to sell, then you need to get bridging finance.

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GV27

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#2746287 18-Jul-2021 17:41

Senecio:

If I were selling a house and a buyer had a condition on their offer subject to selling to their own house I would simply ignore it a turn my attention to the next offer. This isn't the UK, we do not entertain the idea of "chains" in the sale of houses.

I can assure you conditional offers absolutely are a thing in NZ.

mattwnz

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#2746292 18-Jul-2021 18:13

Senecio:
mattwnz:
Traditionally people would buy a property first and put a condition on the sale that it is conditional on them selling their property. But some real estate agents encourage buyers to not put conditions on properties these days, which imo is risky for buyers unless they do a lot of due dilliegence before hand, which is expensive if you miss out anyway.

If I were selling a house and a buyer had a condition on their offer subject to selling to their own house I would simply ignore it a turn my attention to the next offer. This isn't the UK, we do not entertain the idea of "chains" in the sale of houses.

If you want to buy my house and still have another house to sell, then you need to get bridging finance.

I can tell you that when it switches to a buyers market again, and there aren't as many offers on each house, then conditions will be a thing again. A few years ago houses weren't as easy to sell and offers often had conditions, and finance and selling a house was a common one. You have to take what you can as a seller, it maybegood now for sellers but conditions change. A house I looked at last weekend had been sold with conditions, but it had a sunset clause on it, where a buyer could still put in an offer, so it is still happening.

mattwnz

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#2746293 18-Jul-2021 18:19

tdgeek:
mattwnz:

I have a similar conundrum. Probably most FHBs do which is what is causing the problem. I just hope the governemnt are going to introduce more changes soon, as what they have done so far has had no real effect. But due to it being winter at the moment there are few houses in the market and none that I would consider in my area, especially not at some of the crazy asking prices. Many are now double what they sold for just a few years ago without improvements and substantially more than any estimates. When they sell, it just inflates the market even more.

Govt measures have worked, investors have backed off. But its way too late, and even those measures aren't having all investors backing off right now as they phase in. 20 years ago you could have managed this by measures to keep investors away, but nothing happened. Its even too late to enact radical measures to spur a massive house building boom, as A) the prices are already high, B) timber shortage, C) skilled builder shortage if suddenly everyone wanted to build. New builds are up, probably due to "enough of this I"ll build to a fixed price" but its just a nice increase in building, not a short term fix

I don't think some of the property experts would agree that they have had much of an effect. There is no sign of investors selling up, and still a lot of investors looking. As someone commented in the stuff article above, the governments changes over brightline tests may have made the situation worse, as many investors are now not going to sell until the brightline test period is up.

Maybe they could have had a policy where they would waive the brightline test if an investor sells to a first home buyer? That could benefit more people than kiwibuild had provided. It is easy to show if the buyers is a FHB

mattwnz

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#2746295 18-Jul-2021 18:28

tdgeek:
mattwnz:
Traditionally people would buy a property first and put a condition on the sale that it is conditional on them selling their property. But some real estate agents encourage buyers to not put conditions on properties these days, which imo is risky for buyers unless they do a lot of due dilliegence before hand, which is expensive if you miss out anyway.
It isn't always easy to sell a house or get the price you want. Especially on higher value properties in some areas.

The Central Banks seem to think this inflation and these shortages etc are a short term thing. But who believes this is the case?

I can't see its a short term thing. Whether anyone believes my list of factors I posted yesterday or not, I cant see anything thats going to shift the goal posts. You get that when an issue such as car maintenance, house maintenance, or house prices is known about but its left for 20 years.

I agree. But that could mean interest rates could rise quite a bit it counteract the inflation. I don't think that is a bad thing because the current groeth is so artifical driven by very low interest rates. I noticed UKs mortgage rates are far lower than NZs, yet their house prices aren't as bad and haven't risen as much

mattwnz

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#2746296 18-Jul-2021 18:32

Handle9:

In a rapidly inflating market you buy first and get bridging finance until you can sell. Providing you have a good payment history, secure income and can convince the bank it's not that big a deal.

The challenge is finding a property you can close on.

What do you think is going to happen with house prices over the next few years? Do you think, like the government and reserve Bank, that house price growth will flatline by mid next year?

Senecio

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#2746297 18-Jul-2021 18:33

GV27:

Senecio:

If I were selling a house and a buyer had a condition on their offer subject to selling to their own house I would simply ignore it a turn my attention to the next offer. This isn't the UK, we do not entertain the idea of "chains" in the sale of houses.

I can assure you conditional offers absolutely are a thing in NZ.

I have no problem with conditions, but conditional upon the sale of another property. No thanks.

mattwnz

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#2746303 18-Jul-2021 18:55

Senecio:

GV27:

I can assure you conditional offers absolutely are a thing in NZ.

I have no problem with conditions, but conditional upon the sale of another property. No thanks.

I agree, it isn't ideal, but in todays market it may not be that much of an issue as long as it is a a good house and good location. But a sunset cause will help. I know for a fact that buyers are still accepting offers with this sort of clause, and I know a sale that recently feel through after the buyer pulled out. But agents seem to like no conditions, and I have been strongly recommended by several to make it condition free. All they want to do is just sell a house and for it to go unconditional .

When may parents sold a couple of years ago, the market was very different, and they accepted an offer on condition of a sale which was on the market at the time. And it went through fine.

Market conditions can change very quickly.

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#2746307 18-Jul-2021 19:24

the answer is it all depends

Handle9

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#2746331 18-Jul-2021 22:01

Senecio:
GV27:

I can assure you conditional offers absolutely are a thing in NZ.

I have no problem with conditions, but conditional upon the sale of another property. No thanks.

Why not? It's not like you remove the property from the market when you accept a conditional offer. You leave it on the market and if you get a better offer you have options.

Pretty much all conditional offers include a cash out clause where the vendor can require the purchaser to go unconditional with a few days or cancel the contract.

Handle9

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#2746332 18-Jul-2021 22:03

mattwnz:
Handle9:

In a rapidly inflating market you buy first and get bridging finance until you can sell. Providing you have a good payment history, secure income and can convince the bank it's not that big a deal.

The challenge is finding a property you can close on.

What do you think is going to happen with house prices over the next few years? Do you think, like the government and reserve Bank, that house price growth will flatline by mid next year?

It'll probably continue to rise more slowly. Don't take financial advice from me. I thought my first house was grossly over priced when I bought a 3 bed in Auckland city for $255k.

tdgeek

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#2746351 18-Jul-2021 23:57

mattwnz:

I don't think some of the property experts would agree that they have had much of an effect. There is no sign of investors selling up, and still a lot of investors looking. As someone commented in the stuff article above, the governments changes over brightline tests may have made the situation worse, as many investors are now not going to sell until the brightline test period is up.

Maybe they could have had a policy where they would waive the brightline test if an investor sells to a first home buyer? That could benefit more people than kiwibuild had provided. It is easy to show if the buyers is a FHB

Many media articles stated that investor interest in buying has dropped off, thats the point

As to Stuff, investors had no interest in selling when its a bull market. The incentive with the current state of house prices is keep them, so that point isn't correct.

tdgeek

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#2746352 18-Jul-2021 23:59

mattwnz:

I agree. But that could mean interest rates could rise quite a bit it counteract the inflation. I don't think that is a bad thing because the current groeth is so artifical driven by very low interest rates. I noticed UKs mortgage rates are far lower than NZs, yet their house prices aren't as bad and haven't risen as much

Interest rates will rise, but it will be slow. Maybe 0.25% early 2021 is opinionated by economists. And that sharpe rises will cause harm.

tdgeek

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#2746353 19-Jul-2021 00:01

Senecio:

I have no problem with conditions, but conditional upon the sale of another property. No thanks.

In todays market, I agree with GV, its a thing, and houses sell quickly as there are more buyers than sellers so its not really a concern.

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#2746379 19-Jul-2021 06:42

We sold our house last year. It wasn't a typical house (280 sq m on 10 acres) and we got a conditional offer from someone in Wellington who needed to sell their penthouse first. This had an 8 week time period on. We accepted the offer on the basis that a bird in the hand is worth two in the bush etc.

10 days later, we got a cash offer for the same price with zero conditions, so we exercised the cash out clause in the first offer. They failed to meet the requirement to go unconditional so that offer died and the cash sale occurred.

Not uncommon overall because mostl contracts have finance clauses and the lending bank will often require the sale of the buyer's existing home as a condition of lending on the new one.

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