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The vendor elects to list the property with only one Agent. A sole agency is for a specified period of time. During a sole agency, the sole agent may be approached by other agencies that claim to have potential purchasers; if this is the case the sole agent must inform the vendor. Sole agencies have the advantage of enabling the agent to devote their time and energy to the exclusive marketing and promotion of the property.
A similar situation to a sole agency but where two agencies have the right to market the property.
Where the vendor elects to allow any agent access to market and sell the property. The vendor may elect to market and sell the property in their own right.
A comparative market analysis given by a salesperson based on all the available information, as to the amount that a property is likely to sell for if placed on the market. It is a guide to the vendor and is not purported to be a valuation.
An auction is a way of marketing and selling a property with intensive advertising, media-designed, to capture the maximum attention of all buyers within a set-time frame. The process is a means of purchasing/selling real estate with public competition to determine the true market value of the property on the day. The Auctioneer will ask for an opening bid and will then nominate the increments by which the bidding can be raised. The successful bidder will be asked to pay the 10 % deposit and sign the auction contract. A property sold through auction is an unconditional sale on the fall of the hammer.
The Barfoot & Thompson procedure for pre auction offers is that the offer is to be written up on the ‘Barfoot & Thompson Pre Auction Particulars & Conditions of Sale’. The following clause will be added as a Special Condition of sale:
a. The offer shall remain open for acceptance by the vendor, and b. May not be withdrawn by the purchaser until 4pm on the second working day after the offer has been first communicated to the vendor. The vendor can then decide whether the offer is at an acceptable level. If it is, all other registered buyers will be informed of the time, place and manner for the opportunity for their best offer. The vendor, in consultation with the auctioneer, may elect to bring the date of the auction forward and the instigating offer will be used asthe opening bid.
The vendor usually sets the reserve price prior to the auction. The reserve is generally established as a result of feedback during the marketing period from interested parties. The reserve is the minimum figure that the Auctioneer is instructed to sell the property for. If the reserve price is not reached, the property is passed in to. The highest bidder is then offered the first right to purchase the property immediately after the auction at the vendor’s reserve price
The legal practice of allowing vendor bids is against Barfoot & Thompson Company Policy. Bids are only ever accepted from genuine bidders. It is strictly against our company Policy to have the Auctioneer or any other person placing bids for the vendor in order to increase the price.
These are designed to uphold the industry standards. They are put in place by local authorities (usually Councils) to control the quality of construction.
Registered builders and engineers can give a report on a property which helps confirm the house is in sound condition and not likely to be subject to any structural problems. This provision is not in the general terms of the agreement. A purchaser will need to make sure that the salesperson includes a special clause for such a report.
The salesperson that is marketing a property takes the other salespeople in the office through the property so that they can familiarise themselves with the property before bringing prospective purchasers through.
The official document of title showing ownership of the land described in it. The Certificate of Title describes the area and location of the land, it shows the registered proprietor (land owner) and all charges (Mortgages) and other interests, (e.g. easements) affecting the land. Every Certificate of Title has a unique number that is used to identify the property it relates to.
A Freehold Title where the owner of the property has ‘exclusive rights’ to the property.
Owners of a Cross Lease Title hold an undivided share of the parent title of the property. They hold ‘sole use rights’ to the unit being occupied and usually its garage and outdoor living areas. All other areas of the property are shared on an undivided basis with the other owners.
Most commonly used for flats and units, this title gives ownership of a small piece of a larger property including airspace. The owner has ‘sole right to a particular unit to lease, sell or dispose of, as they desire’. They also have an undivided share of the common land and become a member of the Body Corporate, which controls maintenance and has stipulated rules governing occupation .
The titleholder owns leasehold property. The occupier owns the houses or buildings on the land. The owner of the property (lessor) grants to another person (lessee) the right to ‘exclusive possession’ of the property for an agreed period, usually in return for an agreed amount of money (lease).
A caveat is a document which gives notice of a person or organisation’s interest in that property. A caveat does not create new rights. It protects perceived existing rights or creates a ‘hold’ on the property on a tempory basis.
The items that are deemed by both parties to be part of the property and that will be left with the property by the vendor on settlement date. Chattels include such things as the stove, floor coverings, blinds, curtains etc. The chattels to be left with the property are agreed and listed at the time the listing agreement is signed and confirmed when the Sale & Purchase Agreement is negotiated.
The fee payable to a Real Estate Agent for selling a property.
A legally binding agreement between two or more people. Generally, contracts may be written, oral, partly written, or partly oral, or implied by a person’s behavior. Contracts relating to land must be in writing. Contracts may have a number of conditions (Conditional Contract). This is where the contract may have one or more conditions to be met within a specified period before becoming unconditional. eg. subject to the purchaser raising finance, or subject to a building inspection.
The process of legally transferring or registering ownership of interests in property. This process is normally carried out by a lawyer or conveyancer and results in the ownership of property being recorded on the Certificate of Title by the Land Transfer Office.
Rules and Regulations governing the use of the property. eg. There may be a building covenant that stipulates that any dwelling built on the property must be of a certain standard or value or not exceed a certain height.
In a property purchase, the deposit is the amount of money that is paid to secure the purchase of the property. The deposit is usually payable to the Real Estate agents’ Trust Account. The deposit is normally asked for at the time the purchaser makes the first offer on the property and is a demonstration of the seriousness of the offer. A deposit of 10% is usually required.
A right held by someone to use land belonging to someone else for a specific purpose. Drains, electrical and phone lines, and water piping are usually covered by an easement.
The value that you hold in your property. The total value of the property less a mortgage or other liability on the property.
A fund managed by the Real Estate Institute of New Zealand which all Real Estate Agents are required to contribute to. The fund may be used to reimburse persons who may suffer pecuniary loss by reason of theft by a Licensed Real Estate Agent.
A franchise group is a number of small individual Licensees/Real Estate Agents who have joined together under the banner of a franchise holder. They continue to operate as individuals in competition with each other but utilise the promotional power and administrative processing of the franchise name. Barfoot & Thompson is not a franchise group; it is a private company owned under the control of the Barfoot & Thompson families. Barfoot & Thompson branches do not compete with each other and work as one business unit rather than separate small individual entities.
A LIM Report (Land Information Memorandum) is available from your local council. When purchasing a property it is common practice to purchase a LIM Report. It provides information on special land features or characteristics such as erosion; storm water and sewerage; rates owing on the land; title; future plans about the area (e.g. zoning, building heights); builders certificates issued; use to which the land may be put; and any other information the local council considers to be important. Many vendors acquire a LIM at the time of listing their property to support the marketing process and to provide information to any prospective purchasers. Claus 8.2 of the Sales & Purchase Agreement outlines the process for obtaining a LIM. It can take up to 10 working days to obtain a LIM report so this may need to be factored into the Sale and Purchase Agreement. You may be able to request an urgent LIM. Each council will charge for a LIM Report and this will vary depending on the council. Please Note, this does not include an inspection by the Council.
Usually the Council for the area.
An agreement between a vendor and a Real Estate Agent where the Real Estate Agent is contracted by the vendor to market and sell the vendors property.
A document recording the terms of a contract or other legal details.
It is a requirement under the Real Estate Agents Act 1976 all agencies be members of the Real Estate Institute of New Zealand and that they use the letters MREINZ whenever they promote their activities or advertise on behalf of their vendors.
A security over property, given to the lender for the repayment of principal and the payment of interest on the loan. A Mortgage over land is registered or noted on the ‘Certificate of Title’ to that land.
Possession is the right of control over a property and usually includes the right of use. In the real estate transaction process, possession usually happens at the time of settlement when the buyer takes ownership of the property.
It is normal for the purchaser to be allowed one pre-settlement inspection to ensure that the property is in the state at which they agreed to purchase it.
The person who buys a property.
A person Licensed by the Real Estate Agents Licensing Board who holds himself or herself out to the public as ready to act for reward as an agent in respect of the transacting of property.
A legal entity established under the Real Estate Agents Act 1976 to register and license all Real Estate Agents and approved salespersons. Only those persons licensed or approved by the Board are legally permitted to be involved in the transaction of real estate.
The body established under the Real Estate Agents Act 1976 to administer the affairs of all Real Estate Agents.
Those engaged by a Real Estate Agent on a contractual basis to sell property. Salespersons must be qualified and hold a current Salespersons Certificate.
An American term for a Real Estate sales person.
A Contract between vendor and a purchaser for the sale and purchase of property. A Sale and Purchase Agreement for land must be in writing and is a legally binding document. The Sale & Purchase Agreement used by Barfoot & Thompson is the one approved by the Real Estate Institute of New Zealand and the Auckland District Law Society. There are 13 standard clauses in the Agreement for Sale & Purchase. There is space on the agreement form for additional clauses to be added should they be required. When the first offer is made a copy is provided to the purchaser. When both the vendor and purchaser have concluded negotiations and the Sale & Purchase agreement has been signed and dated, agreements are forwarded to both the vendor’s solicitor and the purchaser’s solicitor.
It is normal practice for the salesperson to give copies of the completed agreement to the vendor and the purchaser as well. They then have documentation of when the possession date is and of what chattels go with the property.
The process by which a sale and purchase of property takes place. It is commonly conducted through lawyers and involves the payment of the purchase price (less any deposit already paid) in exchange for the Certificate of Title, a Transfer Document, and a release of previous charges over the property. Keys to the property are usually either handed over to the purchaser or his/her lawyer at settlement, or able to be picked up from the salesperson immediately following settlement. Normally, the settlement date and the possession date are the same.
A tender is a form of marketing and selling a property with intensive advertising media designed to capture the maximum attention of buyers within a set time frame. The process is a private and confidential means of purchasing/selling real estate. For Barfoot & Thompson tenders, the Tender Document, (offer), is filled in and then deposited at the Branch Office and held secure until closing time. The tender documents are different from a normal Sale and Purchase Agreement. Once received by the salesperson, every tender offer shall be irrevocable and shall be a continuing offer capable of acceptance until 5.00pm on the 3rd working day after the closing deadline.
A tender offer may be conditional, however an unconditional, cash tender will be more attractive to the vendor. Finance can be organised prior to submitting the tender offer. Although vendors reserve the right to negotiate with the highest or any tenderer, in most cases a decision is reached on the tender day. For this reason, submitted tenders should be the best offer.
The process of examining the land title to ensure that the vendor has the right to sell, and therefore transfer the ownership.
The date on which all the conditions of a Sales & Purchase Agreement have been met by all parties.
A valuation report can be obtained to give an indication of the market value of the property. Independent Registered Valuers provide two types of valuations; a vendor valuation; and a purchaser valuation. The quoted value of a property may vary depending on which type of valuation is being conducted.
The seller of a property.
Control of the use of land exercised by the local authority or the responsible planning authority.
A physical address, not a PO Box number, where legal notices and documents can be served to either the tenant or the landlord or accepted on behalf of the tenant or the landlord as the case may be. The ‘Address for Service’ may be different from the contact address.
A sum of money, which can be any amount up to a maximum of 4 weeks rent, that a landlord can ask a tenant to pay at the commencement of the tenancy as security against future unpaid rent or damages. A landlord, or agent of the landlord, is required to lodge the bond with the Tenancy Services Centre within 23 working days of receiving it.
An address where either the landlord or tenant can be contacted on an ongoing basis during the tenancy. This can be either a home address or business address. It is common for the landlord to use a business address and the tenant, the tenancy address.
Key money is any payment requested by the landlord for letting the property to the tenant excluding rent, bond, or agents/solicitors fees. For example, $50 for the key to the house or $20 deposit on a lawnmower included with the tenancy. A landlord may not charge key money except with the consent of the Tenancy Tribunal so in practice, key money is a thing of the past.
To carry out an inspection – 48 hours notice and not more frequently than 4 weekly. To carry out necessary repairs or maintenance – 24 hours notice. To show the property to prospective tenants or purchasers – with the prior consent of the tenant which cannot be unreasonably withheld. If the tenant agrees – at any time. Right of entry does not automatically extend to agents selling a property.
A weekly amount that a willing landlord might reasonably expect to receive and a willing tenant might reasonably expect to pay.
A minor is a person who is under the age of 18 years and has never been married. To ensure a Tenancy Agreement with a minor is binding, the contract must be ratified by the Tenancy Tribunal.
A landlord cannot ask for more than two weeks rent in advance or ask for more rent to be paid before the rent already paid has run out. However a tenant can offer to pay a larger amount eg calendar monthly in advance.
The landlord must give 60 days written notice and cannot increase the rent more frequently than every six months. Rent can only be increased during a fixed term tenancy if it is stated in the Tenancy Agreement
Notice of Intention to Sell (a)Where an existing tenancy is in place the landlord is required to advise the tenant in writing if the property is to be put on the market for sale. A tenant may seek compensation if no Notice of Intention to Sell has been issued. (b)If a landlord is letting a property that is on the market for sale the prospective tenants must be advised of the fact.
(a) landlord/agent may enter the property at any “reasonable” time to show prospective purchasers through however access is subject to the consent of the tenant, which may not be unreasonably withheld. Providing the tenant with 48 hours does not automatically permit access. The tenant may deny access if access arrangements are not adhered to.
(b) A tenant does not have to agree to open houses provided that the alternative arrangements for access are reasonable
If a fixed term tenancy is in place the property is sold subject to the tenancy. No notice can be given and the tenancy continues until the term, which is written in the Tenancy Agreement, expires.
If vacant possession is required the landlord may give the tenant 42 days written notice to vacate once the agreement for sale and purchase is unconditional.
Must provide the tenant with written notice that the property has sold, date of changeover and name and contact details of the new landlord.
The terms and conditions of the original tenancy agreement continue under the new owner. The new landlord must within 10 working days of settlement, advise the tenant of their full name, contact address and address for service if different to their contact address, and where and how to pay the rent.
Ownership of any bond held for the tenancy passes to the new landlord at the date of settlement unless the old landlord prior to settlement date has lodged an application making a claim against the bond with the Tenancy Tribunal.
Someone who obtains possession at the invitation of a person authorised to give possession eg the named tenant. A squatter has rights and cannot just be evicted. An Application for a ‘Possession Order’ must be lodged with Tenancy Services to claim possession from a squatter.
Is a tenancy that will terminate on a specific date. Fixed term tenancies cannot be terminated by notice, by either party. The Tenancy Tribunal may grant an Order ending the tenancy if a case of hardship can be proved.
The tenancy can be terminated by the tenant giving 21 days notice to the landlord. If the landlord requires the property for his own occupation or that of a family member, 42 days notice to the tenant is required. If the landlord wants the tenant to leave for any other reason the tenant is entitled to 90 days notice.
The tenant is the person to who the tenancy of the premises has been granted. Generally the tenant is the person/s named as tenant/s in the tenancy agreement.
A trespasser is someone who has never been given the right to possession. ie a transient moves into the property. The Police can be called to evict the trespasser.