Buying a house is exciting, but it’s easy for the fine details of residential conveyancing law to slip through the cracks. If you’re interested in a number of properties, you may find yourself wondering, “Can I make multiple offers at once when shopping around for property?” Many assume you can, and we understand why. After all, keeping options open takes a lot of guesswork out of the process.
But the truth is, making multiple property offers can get real tricky real fast. Read on to find out more about how you can keep your options open without accidentally committing to two binding contracts at once!
Multiple Offers: What are the facts?
By making any offer at all on a property that you’re interested in, you are indicating that you are happy to enter a contract to buy it. Offers can be conditional, i.e. made with stipulations which may void your offer. For example, you may make an offer to a seller with the condition that the house is given a professional property inspection before the sale, or you might make an offer that will only go through on the condition that a bank approves your finances.
However, a seller is under no obligation to accept offers that come with too many conditions, and very few sellers would ever accept an offer that contains the condition “unless I find something better.” At face value, this means you can’t make multiple offers on different properties at once. If you did, you might wind up with two offers accepted by different sellers, and then you’d be on the hook to buy two houses.
These constrictions are due to the legally binding nature of the sale and purchase agreement—the document used to make the sale of property. But don’t worry, there are a few ways to keep your options flexible.
How can I keep my options open?
Typically, sellers are able to hold onto an offer for as long as they want, before either accepting or rejecting it. If you have an experienced property lawyer on your side, and you’re worried about putting all your chips on one bet, your lawyer might suggest you put an expiry date on your offer. This makes it less attractive to a buyer, because it puts a time limit on their offers—they might think they can wait for a better one. However, this does protect you if you want to be able to make multiple offers around the same time. As soon as one offer expires, you can make another.
Your other option is making an offer and then withdrawing it if you find something else that you’re more interested in. Agents should be able to formally confirm the withdrawal by putting it in written form. However, before the offer is formally withdrawn it may be accepted, and then you are bound by the terms of that contract. This is a high risk strategy that requires careful consideration and advice beforehand.
Remember to be careful!
Given the advice above, you might be thinking: “Well, can’t I just make all my offers conditional, and then simply tell them my finance fell through if I want to withdraw?”
Be very wary of trying to game the system—it exists to make sure everyone involved has a fair chance to get what they want. If you do try to void your own offer by claiming a financing condition can’t be met, for example, the seller and their agent are well within the rights to ask you to prove that this is the case with hard evidence. If your bank did not, in fact, deny your finance, then your offer still stands. It’s best to be honest, and go through the legitimate process of withdrawing your offer.
Still unsure how to approach buying a house?
Buying property is one of the most significant decisions you may ever make. It’s a complicated process to go through, and it’s important to get it right. Committing to an offer on a property is tough, so if you’re looking for help with the journey, BMC Law’s Wellington legal services could be what you need. Talk to us today, and we can help you make the right moves to get the house you want.