Wednesday, 25 February 2009

Buying a House

We got through it. We have a house, which we love. But the process was more than slightly annoying.

A friend of a friend of the family is an agent in town, so she showed us around to some listings her agency had that met our criteria. That was all good. We actually fell in love with the very first house we saw, which had only come on the market the day before. So dutifully we kept looking, knowing that with the markets the way they are now, there's no reason to rush.

After looking at 5 or 6 more places, we decided to make an offer on the first place. We called "our" agent ("our" in double quotes because really agents here can only ever represent the seller) and she said she'd be right by with the offer forms. By the time she came by, apparently there was another offer being put on the place. We thought that a bit sketchy, but since the place was so newly listed it was also to be expected that others would be interested an offering on the same time frame as us.

So we were made to sign a sheet saying we understood that there were multiple offers on the house. We were advised to make our "best offer", meaning don't hold back thinking that we could negotiate up. When multiple offers are made at the same time the way it goes is that both offers are presented to the sellers at the same time, and the sellers select which one they want to work with, and the others are let loose. Hence the recommendation to try to have the higher offer.

We had been planning on offering below RV, rateable (assessed) value, but decided to come up and offer exactly RV, which really, in our minds was not actually as high as we were willing to go, but with the markets the way they were, blah blah blah, we didn't want to jump too fast. We got a call later that night that the other offer was higher, so we were out.

I was really really pissed. The more I thought about it, the more I wish we had offered higher, because I loved the house. But sleeping on it, I calmed down, and got excited about looking again for something else. We started looking at more that next day. And then we got a call from "our" agent again. The other buyers couldn't go as high as the sellers wanted, so now they were offering it to us, at their original asking price. This confused me, because I thought the whole point of the multiple offers deal was that once one offer was chosen to go with, wasn't that it for the rest of the offers? Apparently not. It only meant that they would negotiate with the others first, and then if an agreement wasn't reached, the sellers could reach out to whomever they want. Really sketchy, right? Because essentially the agent told us to make our highest possible offer because there would be no more negotiating, but then there was more negotiating!

Well, I felt a bunch of swirling emotions, elation that the house was still available, but anger at the way the agents we seeming to scam us. So we turned the house down at the asking price, saying we were still interested but not at that price. And that they could contact us if the sellers were willing to come down at all. And we kept looking.

And we found a second house that we liked a lot through a different agency. This agent and agency seemed so uninterested in selling us this property, because we kept calling to see it a second time, and it took ages for us to get in again. Turned out the seller was less than willing to part with her house, and the sale was being forced on her as part of divorce proceedings. Not a pleasant situation, but we really liked the house. We decided to put an offer in.

The agent was tickled to tell us about the drama this caused, with the woman locking herself in the bathroom and refusing to come out to hear the offer. We were a bit concerned about her mental state, and over the long 24 hours it took her and her ex-partner to respond to our offer we decided we didn't really want to be involved anymore. They came back with a counter-offer, interestingly exactly the same as the price we could have the first house at. We turned it down, and withdrew our offer.

We waited another week or so, and didn't find much else we were interested in. The first place we loved was still listed, it had been a month on the market now, and we hoped that maybe the sellers were starting to feel pressure to sell. So we contacted "our" agent again, asking if there had been any movement yet. She said that the sellers would be happy to receive an offer. So we decided to offer again. We went into the real estate office, prepared to offer a bit more than we had offered before, but not as high as their asking price. When we got there "our" agent told us, "Guess what. There's another offer in again. You'll have to give your highest offer again." WTF, right?

At this point, we were sure we were being scammed. Apparently real estate agents in New Zealand are second only to lawyers in their reputations for sliminess. But there was nothing we could do if we really wanted the house. There was no way we could prove that they were making up these mysterious other offers. And technically, there could have been someone else making offers, like the sellers' best friends. Or even the sellers themselves, as I've actually heard is sometimes done here.

But we were sick of it, wanted the house, and still held onto the small possibility that the other offers were legit, so we ended up offering their asking price. The agent took them the offer, and called us back saying, "Do you have any more money?" And we were all, "NO. That is our FINAL offer." And they took it.

Blah. Leaves a bad taste, eh? Upshot? We LOVE our house. And we do know that we paid almost 10% less than the sellers paid for the house less than 3 years ago. So it's not like we were totally ripped off.

The last formalities went without a hitch. We had an inspection done, which came back with stellar results. We went into the lawyers, signed some papers. Wired the money into the lawyers' bank account, and they called us and said, "You can pick up the keys." Yay!

Moving in was a whole other story. To be told later.


Dennis said...

Kya, just wanted to let you know that I'm following and enjoying your Blog here. I remember your various comments on the expats list in the run-up to your immigration. Glad you made it to NZ.

No all real estate agents are sharks but it sounds like you ran into some. Unfortunate. But, you've got the house now, eh?

Marrisa said...

We certainly learned a thing or seven when it came to buying our house. Looking back now we know were were shafted out of extra money but you are in the position where you want it so badly and they know it. What a total piss around though, scamming they certainly are.

At least you are now somewhere you absolutely love - thats the main thing! xx

Anonymous said...

I think you need to check your facts first around buying a house. The reason 'another offer' would have been on the house was because when an offer is coming ontop a property, the agent calls for 'other interest' from their associate agents. they contact their interested prospects and advise an offer is imminent at which point the potential purchaser may submit their offer - usually their best offer. It is however upto the seller if they want to accept an offer and more importantly they can enter intop negotiations "in good faith" This may be becuase of conditions or dates of settlement. You were not being scammed. The agent is the being paid by the seller to bring them the best offer. its upto you to decide what conditions and how many $$ you want to offer. It is likely that a short negotiation will happen. You have not been "shafted" but merely wanted a good buy on a house that you loved but so do other people. Sellers often seek more money on a house where the deal didnt work as they now have a market value set albeit that sometimes the old adage is true - the first offer is often the best offer.