How to buy at the height of the market

Axi and Robin* bought their first home in Auckland using a TFM negotiated loan and KiwiSaver.

They first contacted us for a loan when they wanted to buy a three bedroom apartment off the plans in Takanini. But their circumstances changed and they had to pull out.
A few month later, they were back on the market. They first looked at a few properties that the bank rejected as they were deemed "potentially leaky." But before long, they had an offer to buy their first home in Auckland accepted as long as they meet the conditions set out in the sale and purchase agreement. The property they’re interested in is a $535,000 two bedroom unit in Birkenhead. They have saved some money towards a deposit, and have been contributing to KiwiSaver superannuation scheme for quite a few years.

In the last 12 months, they have earned a combined income of $90,000.

Both Axi and Robin are eligible to withdraw their superannuation contributions (including tax credits).

Banks have advised they will need a deposit of 20% of the purchase price ($107,000), which they don’t currently have. After looking through the TFM website, they contacted us again. We advised them to get their parents on board, and the parents were happy to help. They offered a gifting certificate of 10,000 dollars. With the superannuation money, Axi and Robin now had the full deposit amount. All this worked out due to the advice we offered, their parents' help, and our negotiating with a major bank.

House purchase price $535,000
Deposit amount $107,000
Deposit available $72,000
Gifting certificate $10,000
KiwiSaver $25,000

Contact us todayto discuss how we can help you buy your house.

*not actual names

How to buy a property?

There are three different ways to buy a property:

  • By negotiation
  • Auction
  • Tender

Sale by negotiation:

This method is most commonly used for sale purposes. It allows you to list your property with an asking price that attracts people looking around to purchase a property in that range. There is another way: sale by negotiation without any asking price. This method attracts many people who will then make an offer based on the current market rate. For sale by negotiation, your offer will be submitted to the vendor and then the vendor will decide whether to accept or reject it.

Sale by Auction:

This is another commonly used method of selling property. Nowadays sale by auction properties are more on the listings. They are advertised to attract buyers' attentions. The time and date for the auction is also mentioned while advertising it. The people interested in buying that property have to bid. This method attracts a wide range of customers.

There is always a reserve price (minimum price) the auctioneer is advised to sell the property for. The auctioneer starts with the opening price and then the auction starts. The interested customers can bid by calling out a bid or by raising their hands. Usually the successful bidder will need to pay 10% deposit & sign the contract. The highest bidder might be offered the option of purchasing the property immediately after auction if the reserve price is not attained.

Sale by Tender:

Sale by tender is the process of buying a property through a conditional written offer. These offers are all confidential. Interested parties are always encouraged to offer the price they feel the property is worth. If they feel that’s the house they want to buy, they need to put the best offer forward as they will not be sure about the price offered by competing parties. The seller is not bound to accept the highest or any offer.

In case if you are interested in making a tender on a property, you will then need to request a copy of the tender documents from the real estate agent. These include terms & conditions of sale by tender, a copy of certificate of title, a sale and purchase agreement and any other document relating to the property. Most probably you will get to know the results within a couple of hours after the tender close time. If you don’t hear back within a couple of hours about the result, just call the agent. When the tender date has passed, and if the vendor is negotiating with some other party, that means your offer has not been accepted and your are free to look for other properties.

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