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The Hidden Dangers of Unconditional Property Offers · That Home Loan Hub

• 0:10
  Speaker 1: Hello and good to see you, kunj Kia ora.
• 0:13
  Speaker 1: How are we?
• 0:13
  Speaker 1: Oh wonderful.
• 0:14
  Speaker 1: We had a couple of good long weekends for everyone to rest and recharge.
• 0:19
  Speaker 2: Yeah, it's good.
• 0:21
  Speaker 2: Are we recharged?
• 0:22
  Speaker 2: Hey, we're always charged and ready to go for our people.
• 0:27
  Speaker 1: So today we're going to talk about a couple of really important things.
• 0:30
  Speaker 1: What are we talking about?
• 0:33
  Speaker 2: I thought we'll cover off making an offer like a cash offer on a property.
• 0:39
  Speaker 2: I've seen a lot of agents encouraging clients to pretty much take off as much conditions as possible, so I just thought maybe we'll just cover that off a wee bit.
• 0:51
  Speaker 2: And what are the pros and the cons on that?
• 0:54
  Speaker 1: So the market is heating up right.
• 0:56
  Speaker 1: We see a lot more first-time buyers coming back getting the confidence because the interest rates are getting lower, yes, and agents are seeing more interest in the properties they're selling.
• 1:07
  Speaker 1: So a lot of the phone calls we're getting at the moment is oh my God, how can I put an offer unconditional cash offer, so I can win?
• 1:15
  Speaker 2: the property.
• 1:15
  Speaker 2: Yeah, and I think it's about us educating our clients.
• 1:19
  Speaker 2: And although there's, you know, more heat in the market, more buyers in the market, there's also a lot more stock as well in the market.
• 1:29
  Speaker 2: Yeah, so I'm not a very big fan of, you know, making a cash offer.
• 1:35
  Speaker 2: Hey me neither, Because cash offer means you have the house Like you're good to go.
• 1:41
  Speaker 2: You can't pull out.
• 1:42
  Speaker 2: That's it.
• 1:43
  Speaker 1: It's like bidding on Trade Me and going buy.
• 1:45
  Speaker 1: Now that's it, you bought it.
• 1:47
  Speaker 1: You've got to commit to the item.
• 1:48
  Speaker 2: Yeah, and most of the time like, yes, you've got your finance approved, but you've still got to get the insurance approved as well.
• 1:57
  Speaker 2: And there's all the other due diligence you know, like getting the LIM report, getting the builder's report, just to make sure that you're not buying a lemon or dud as well.
• 2:05
  Speaker 2: So like there's just so much to tick off that I would rather people take their time, like to tick those off, rather than being rushed or feeling the pressure from the agent encouraging those cash offers.
• 2:20
  Speaker 1: One of my favourite phrases of all times and I try to apply this a lot with our team is and I say this to my clients, the buyers is don't let the agent's pressure, the agent's urgency become your urgency yeah for sure, right, because everyone works on a different urgency level, correct?
• 2:43
  Speaker 2: Not yours.
• 2:43
  Speaker 2: If anyone knows, if a new owner urgency level.
• 2:48
  Speaker 1: Everything is urgent, yeah, but when it comes to buying a house, it's such a big decision of your life.
• 2:53
  Speaker 1: It's one of the, you know, the biggest decisions.
• 2:55
  Speaker 1: Sometimes it's even bigger than getting married, because, I mean, you can always get divorced.
• 3:01
  Speaker 2: That's another episode on its own.
• 3:04
  Speaker 1: But you know, when you commit to buy a house and if you don't have the right finances in place, you can find yourself in a big, big problem legally as well.
• 3:15
  Speaker 1: So the house may have issues with the title, but if you're committed to buy it, that's it.
• 3:20
  Speaker 1: The house may have issues with clothing.
• 3:21
  Speaker 1: I had a client I remember our client at the moment from Christchurch.
• 3:26
  Speaker 1: She emailed us.
• 3:27
  Speaker 1: The agent wanted her to go to auction and it's a monolithic property.
• 3:31
  Speaker 1: The auctions say sold, as is Correct, as is where is.
• 3:35
  Speaker 1: And the client is not from New Zealand.
• 3:36
  Speaker 1: English is her second language.
• 3:38
  Speaker 1: She's a solo mom.
• 3:39
  Speaker 1: She has no idea.
• 3:41
  Speaker 1: Yeah, exactly, and the agent has taken her for a ride.
• 3:44
  Speaker 1: So if it wasn't for us jumping in and going, hey, hey, hey, hold on a second, you don't want to buy this property.
• 3:49
  Speaker 1: Because these are the problems with this kind of properties when she's from, that sort of cladding is a common type of cladding and she doesn't see any problems with that.
• 3:57
  Speaker 1: She goes well, everyone in my country has this.
• 3:58
  Speaker 1: But in New Zealand, obviously, with monolithic properties, there are problems with that.
• 4:03
  Speaker 1: So how do we protect our clients?
• 4:05
  Speaker 1: How do we educate them that putting a cash offer is not as attractive as it may seem?
• 4:12
  Speaker 2: Yeah, correct.
• 4:13
  Speaker 2: Yeah, I think, like I said earlier, it's like more about educating our clients, and at the moment it is a buyer's market, so they still have that upper hand, I think.
• 4:25
  Speaker 2: So that's why I'm encouraging them to take their time and to do those due diligence.
• 4:31
  Speaker 2: But also, disclaimer, not all agents are, you know, like that, so they're not all putting pressure on to do, you know, the cash offers and things like that.
• 4:41
  Speaker 2: It's just recently there has been an increase of it, so I think our clients just need to be aware.
• 4:47
  Speaker 1: I think the tip for the buyers here would be to be up front with the agents and say hey look, I am a first-time buyer, I don't know what I'm doing.
• 4:54
  Speaker 1: You know, don't be afraid to look like an idiot.
• 4:56
  Speaker 1: Yeah, it would be worse if you were an idiot in the court trying to battle out why you can't buy this property now.
• 5:02
  Speaker 1: Yeah, so you know, don't be to put down when I go unconditional.
• 5:13
  Speaker 1: And hey, if you haven't listened about going unconditional to that episode that you and I have done, please go back and listen to that episode where we cover off the deposit on the paper versus deposit for the bank.
• 5:25
  Speaker 2: Yeah, I mean like there's so much help out there, there's so much resources out there, so like do your research in that sense as well and again, yeah, your mortgage as well, like us encouraging ours to put that finance clause in yeah, you're not alone.
• 5:42
  Speaker 1: I think a lot of people feel isolated during this journey if they don't get the right help around them.
• 5:47
  Speaker 1: So that's why you know, get the right help around you, get the right mortgage advisor, get the right lawyer that you can message and get help.
• 5:53
  Speaker 1: And with the agents you know, sometimes the same agent can show you multiple properties from their agency, like, for instance, harcourt's.
• 6:00
  Speaker 1: I know they work, you know they can sell anyone else's properties if they've got it on a listing same as Encore agents.
• 6:08
  Speaker 1: So just really reach out and talk.
• 6:12
  Speaker 2: I mean because if that house is not, if it's not going to happen, there's more properties out there, like they've got choices, I mean.
• 6:21
  Speaker 2: But I do understand that our first home buyers do fall in love with those houses.
• 6:26
  Speaker 1: And that's the problem, right when you think with your heart and you can't remove that emotion.
• 6:29
  Speaker 1: I think the other tip for them would be is that if you really want to go to auction for this house is to go to the auction but make an offer after the auction ends, because sometimes properties don't sell at the auction.
• 6:40
  Speaker 2: Yeah, if it passes auction, you're there, you can go in and put in negotiate.
• 6:45
  Speaker 1: And then I guess, another tip that we can share with them.
• 6:48
  Speaker 1: Look, we're full of tips today.
• 6:48
  Speaker 2: Yeah, you're full of tips.
• 6:50
  Speaker 2: I'm just like, yeah, that's our synergy, right that's how we work.
• 6:55
  Speaker 1: I start the sentence you finish it?
• 6:56
  Speaker 2: Yeah, I finish it.
• 6:57
  Speaker 1: I think the other tip for them would be is and if you do really want to be at the auction is, have all your ducks in a row before the auction and be prepared.
• 7:06
  Speaker 1: If you do go to an auction, have an ending price, Don't get overly.
• 7:16
  Speaker 2: Don't get caught up and carry on and be like me and go up to 42 beds.
• 7:18
  Speaker 1: Yeah, don't be coach, don't be coach.
• 7:19
  Speaker 1: So I guess you know this is a problem we're facing right now, but there are solutions to it.
• 7:26
  Speaker 1: So pros of going to auction or putting a cash offer is that you may find yourself a really good deal.
• 7:34
  Speaker 1: You may buy it for way less than if you were to put conditions around it.
• 7:37
  Speaker 1: But if you do want to do that, have your ducks in the room.
• 7:41
  Speaker 2: Correct, get all the due diligence ticked off.
• 7:42
  Speaker 2: So it doesn't necessarily mean you can't put a cash offer in, so we can get all the due diligence ticked off prior um, but you do need to approach um us, you know, with good time, with good lead in time.
• 7:58
  Speaker 2: So give us at least 10 days, I reckon, to get those ticked off.
• 8:01
  Speaker 2: And yes, if you do want to go cash, it is possible.
• 8:05
  Speaker 2: We're not saying it's not yeah, we're not being naysayers here, but we just want to protect you.
• 8:10
  Speaker 1: We're here to protect you and your financial um well-being.
• 8:13
  Speaker 1: So, absolutely possible.
• 8:15
  Speaker 1: So the pros are yes, you can do this um get your due diligence sorted, and the cons are it can be risky.
• 8:23
  Speaker 1: Yeah, lots of risk involved.
• 8:25
  Speaker 1: You're locked in straight away.
• 8:26
  Speaker 1: You're locked in straight away.
• 8:27
  Speaker 1: So here was the episode about how to make a cash offer or how not to make one.
• 8:31
  Speaker 2: Yeah, pros and cons of cash offer follow us for more good stuff, thank, you see, ya, see ya.