Real Estate jargon can be a little overhelming at times. This list of questions are asked more often than you think and knowing their correct meaning may help you in your quest to buy or sell a home. Email me if there is a question which doesn't feature that you would like answered and it will be emailed to you and added to the list.
What is the difference between a building consent and a resource consent?
A building consent confirms the proposed building work complies with the building code.
Resource consents are issued to permit activities which affect the environment. Auckland Council is required by the Resource Management Act to make sure that environmental effects are managed well.
What is a pre-auction offer
A pre-auction offer is an unconditional offer presented to the vendors in a hope to cut out competition. If the vendor accepts your pre-auction offer, the most common course of action is to bring the auction forward and other potential buyers will be notified of a new auction date.
Any potential buyers who do not have their 'ducks in a row' are likely to fade out which may help avoid a fierce bidding war come auction day.
Things to remember:
- Your offer needs to be cash and unconditional
- You are unlikely to shut down the auction altogether
- You are going to have to make it worthwhile for the sellers
- If your pre-auction offer hasn’t been accepted - this doesn’t necessarily mean the property won’t sell at the price you offered
What is a vendor bid?
The auctioneer has the discretionary right to place bids on behalf of the vendor. This will only occur if there are no bids, and will only take place at a level
below what Bayleys believes is fair market value (or the "reserve"). Only the auctioneer can make a vendor bid and will declare it as a vendor's bid so everyone is aware. Our vendors are given a written undertaking that they or anyone on their behalf will not bid.
Why do so many people sell via auction?
Auctions are a great way to sift out the serious buuyers as an auction campaign means:
- Potential buyers have a finite date in which to " have all their ducks in a row" in order to buy the property
- The likelihood of competitive bidding on auction day
- Not having a price helps reach a premium selling price. Potential purchasers tend to tell you what they want to pay, not what they will pay
- Once the hammer comes down the property is sold - unconditionally.
If I want to buy a house at auction, what do I need to do before auction day?
- Talk to me about the property so you have access to the LIM report, property memorandum, Certificate of Title. I may well know the history of the home too to give you further insight.
- Consider having a building inspection
- Make sure you have a loan in place (once an auction property is sold, remember it is unconditional)
- Make sure your legal representative has read and approved the conditions of sale