Deborah's Blog

Tue, 16 Feb 2010 00:00:00 +1300

Back-up offers

I’ve recently sold two units by tender. In each case, a conditional offer was accepted.
About 80% of conditional offers confirm on the due date, another 10% get a time extension and then confirm, and the remaining 10% can’t meet their conditions and cancel their contract.

In the first of this month’s sales, the two tenders were very close in price, and Tender 2 was accepted as its conditions seemed likelier to be met. Then when Tenderer 2 needed an extension of time, I got Tenderer 1 to work on their conditions and come back in with a back-up offer. Result: sold to Tenderer 2, who might otherwise have asked to renegotiate the price because the builder’s report showed defects in the garage, but knew he would lose out to Tenderer 1 if he tried to do so.

In the second of the 2 sales, the builder’s report showed a number of mostly-minor defects which buyer A wanted fixed. Meanwhile, the owner arranged to fix the only important defect, and I’d signed up a back-up offer, having shown Buyer B the other defects which he wasn’t bothered about. So Buyer A couldn’t renegotiate and

Buyer B got it. I did another open home and some personal appointments while his offer was conditional, and lined up Buyer C just in case.

So, as an American friend puts it: “the show ain’t over til the fat lady sings, and so far I’m just humming.” Under offer doesn’t mean sold. I keep doing open homes until I have an unconditional sale, and I try to get a back-up offer. 15 years ago, when I was starting out in real estate, many deals like these two failed. One of the skills experience brings is the skill to stop that happening, and to hold a sale together.

Buying Un-Seen

I am always amazed when someone buys a home they haven't personally seen. When I needed a home in Dunedin for a student family member, I flew down there with a shopping list pre-selected on-line, saw 25 homes in 1½ days, bought one unconditionally and flew out again.

I had a buyer in Singapore contact me a couple years back looking for a cheap investment apartment, so I checked out all Remax stock, told him which one was best and why I thought so and sent him lots of photos, and he bought it. He still hasn't seen it, but it's paying its way well, and he's happy with it.

I had a law lecturer from Auckland get a Wellington-based friend to choose a house for his daughters to flat in here - he arrived to see the house for the first time on settlement day, and it was such a relief to find he loved it.

Today I had a family drive down from Auckland to see the unit they bought at tender last week. They had seen it on-line, and I had talked them through the lay-out and sent them lots of photos, plus the details of all suburban unit sales within a 5km radius in the last 6 months so they could assess value. Relief again, they love it.

If you're buying from out-of-town and you can't inspect the property yourself, just call me and I'll happily go that extra mile to help you choose the right place.

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