Recently came across a few good IPs in Invercargill and needed advice of fellow forumates regarding making offers in NZ (is it a norm that most offers will not be longer than 60 days). The only reason I ask is if I spot a good opportunity but it needs some cosmetic work done (reaping out carpets, renovate bathroom completely and give interior a paint-over which should not take any longer than 3 weeks), Can I negotiate with vendor for early access to property and have a long settlement (60days)? Is NZ vendors open to creative settlement terms?
Cheers
johnWant to join financial independence before 31 years old, currently 25
Hi jcls79
there is no real ‘norm’ for how long a contract will be from signing to settlement. you need sufficient time to investigate the deal (your due diligence) and the clauses to allow you to do that, then you go unconditional. how long from unconditional to settlement can depend on as many things as it does here – does the vendor need money urgently? is the end of the fin year coming up? etc etc.
if the property is vacant, absolutely no reason at all why you could/would not ask for early access (generally once you have gone unconditional and paid your deposit) to do the refurbishment.
One thing to think about – insurance of the property whilst you are in there – me, i like to know its covered in case something happened and the owner lays blame at your feet!!!Yep Kiwis open to creative terms such as this – this is pretty standard on nearly all of the agreements we do ourselves.
Cheers
CDCastleDreamer
NZ Investor and Property SpotterCD,
Just to clarify, what sort of insurance would you need to cover you whilst you are in there presettlement ?
Are you just saying that you should bring forward the insurance so that you are covered for any time you have access to the property, not just after settlement ?
Thanks,
Andrew.Hi Aptam,
you aren’t required to have insurance prior to settlement in NZ for your property. But to make the seller more comfortable with my asking for access to rip stuff up and paint and what not, i have offered to cover the insurance cost for that period. If the vendor is happy with an early access clause for refurbishment and doesn’t baulk at that, then I would generally not worry about offering to pay their insurance.to me, every deal is about some sort of win win, so you always need to have something to offer the vendor to appear to be trying to be accommodating and fair. that’s just good business, so I use the insurance opportunity to help with negotiations, and also to make sure that the property is actually insured before I access.
what would happen if you accessed and did damage to the property or burnt it down by accident – and then you found out that the vendor had let their policy lapse – i don’t even want to go there, so I check it out first as part of my due diligence…..CastleDreamer
NZ Investor
http://www.nzpropertytogo.comHi,
I did a similar deal in Australia recently and found it very difficult to get insurance. The issue was not the grey ownership but the fact that the property would not be occupied during the reno. (and couldn’t be under the terms of the contract I negotiated with the vendor). I ended up with “builders insurance” which cost over $1000 for 90 days!
Enquire about the insurance first.
Andrew
Hi CD,
thanks for your thoughts. The insurance tip is definately a good bargaining chip.
Just to clarify, when you say you are ‘covering the cost of the insurance’ for that period I presume you are talking about having the insurance in your own name, rather than simply reimbursing the vendor ?
cheers,
Andrew.
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