Property buying process

How to Make an Offer on a House in New Zealand

Making an offer is the first formal step in purchasing a home. In New Zealand, an offer is not just a verbal price agreement — it is a legally binding contract called a Sale and Purchase Agreement. We guide you through drafting protective clauses and vetting titles before you sign.

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Vetting Checklist

✔ **Pre-Signing Vetting**: Always email draft agreements to Quay Law first.

✔ **Title Checks**: Verifying easements and covenants on the LINZ record.

✔ **Standard Conditions**: Inserting finance, LIM, and building report clauses.

✔ **Negotiation Cycles**: Understanding counter-offers and initials.

1. The Particulars Page

Lists the names of the buyers and sellers, the property's physical address and legal title reference, chattels included (e.g. blinds, stove, heat pumps), the purchase price, and the deposit amount.

2. General Terms of Sale

Contains the standard legal conditions governing property transfers in New Zealand, including rules on title checks, property access, risk allocation, defaults, and interest charges.

3. Further Terms of Sale

This is where custom protective clauses are added. Buyers use this section to specify conditions such as mortgage finance, builder's structural inspections, council LIM checks, or the sale of an existing home.

The Step-by-Step Process to Make an Offer

Step 1: Consult Quay Law for Title Review

Before writing any numbers down, email the real estate agent's draft agreement and the LINZ Record of Title to our Remuera office. Ian Mellett will check for easements, land covenants, and flat plan errors to prevent binding you to a defective title.

Step 2: Establish the Price, Deposit, & Timelines

Determine your offering price and the deposit amount (usually 10% of the price, payable to the real estate agency trust account once the agreement becomes unconditional). Choose a target settlement date (when you pay the balance, receive the keys, and take possession).

Step 3: Define Your Protective Conditions

Determine what conditions must be satisfied before you are legally obligated to buy the home. Standard conditions are listed on the front page of the ADLS contract with specified working day timeframes.

Step 4: Sign and Submit the Agreement

Once we have reviewed the agreement and inserted your protective clauses, you sign the document. The real estate agent presents the signed contract to the vendor (seller) for their consideration.

Step 5: Negotiation and Initials

If the vendor rejects your initial offer, they may write in a higher price or alter conditions, initialing the changes. They return the contract to you. You can accept by signing your initials next to theirs, or write a counter-offer. The contract becomes active once both parties initial and agree on all terms.

Standard Protective Conditions Wording

These are templates of the common conditions inserted into the Further Terms of Sale. Vetting these with Quay Law ensures they are drafted correctly.

Finance Condition

"This agreement is conditional upon the Purchaser obtaining finance approval from a registered bank, upon terms and conditions entirely satisfactory to the Purchaser in their sole discretion, within [e.g. 10] working days from the date of this agreement."

Why it is vital: Protects you if your lender declines your mortgage application or KiwiSaver withdrawal.

LIM Condition

"This agreement is conditional upon the Purchaser obtaining and approving a Land Information Memorandum (LIM) report from the [e.g. Auckland] Council regarding the property, within [e.g. 12 to 15] working days from the date of this agreement."

Why it is vital: Essential to check for unconsented structural changes or private drainage lines. Note: Auckland Council standard processing is 10 working days.

Builder's Condition

"This agreement is conditional upon the Purchaser obtaining a written builder's report from a qualified building inspector, in terms satisfactory to the Purchaser in all respects, within [e.g. 10] working days from the date of this agreement."

Why it is vital: Allows you to cancel the contract or renegotiate the price if structural defects or moisture issues are found.

Understanding Multi-Offer Situations

A multi-offer situation occurs when more than one buyer makes a formal written offer on a property at the same time. This is a blind tender process, meaning you will not know the price or conditions of the competing offers.

**Under the Real Estate Agents Act rules**:

- The real estate agent must inform you in writing that you are in a multi-offer situation.
- You must sign a **Multi-Offer Disclosure Form** confirming you understand you only have one opportunity to put your best offer forward.
- The seller can choose to accept any offer, reject all offers, or choose one offer to negotiate with exclusively.

Multi-Offer Strategy Notice

In a multi-offer situation, you should submit your maximum price along with the fewest possible conditions to make your offer attractive to the seller. However, **never scratch essential conditions (like title checks or finance) to win a bid**. Winning a contract for a structurally damaged house without finance approval is a legal disaster. Consult Quay Law to discuss your strategy.

Instruct Quay Law Before You Sign

Ensure your Sale and Purchase Agreement has the correct protective conditions. We offer fast draft contract and title audits. Request a transparent fee quote online before you submit your offer.

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Offer Process FAQs

You can withdraw your offer at any time *before* the seller signs it and communicates their acceptance to you (or your agent). However, once the seller signs the agreement and acceptance is communicated, the contract is legally binding, and you can only cancel it if your specified conditions are not satisfied.

An unconditional offer is a signed contract that contains no protective conditions (no finance check, no LIM check, and no builder's report). If the seller accepts it, you are legally bound to complete the transaction on settlement day. Bidding at an auction is always unconditional. You must complete all due diligence *before* the auction starts.

When you draft your written offer, we recommend inserting a **lapse date and time** (e.g. 5:00 PM on the second working day). If the seller does not accept or counter-offer before this deadline, your offer automatically expires, and your deposit obligations are terminated.

Discuss Your Residential Transaction

Get in touch with Quay Law to review a Sale and Purchase Agreement, audit a land title, or arrange legal settlement.