Buying your first home in NZ – information for new immigrants

If you’re coming to live in New Zealand (or you’ve recently arrived), chances are you’d like to buy a home.

If that’s you, I recommend you do some research before you buy.  A great place to start is the Immigration New Zealand website.  It’s full of useful advice and further links. 

One important issue affecting home buyers that the Immigration website does NOT draw to your attention is New Zealand’s recent leaky home crisis.  This is a key issue that you should know about.  You’ll get a taste of the issues here at the links I’ve provided below. 

It is important that you know that leaky homes have adversely affected the lives of thousands of NZ residents.  The NZ Goverment is working to find a solution to the problem, but it is a work in progress at this time.

Anyone who buys a leaky home (or a potentially leaky home) is financially and/or emotionally at risk.  Before Nov 17 2009 New Zealand’s laws made it far too easy for customers to unwittingly purchase an at-risk home.  The new Real Estate Agents Authority and the Real Estate Agents Act (2008) tightened up the way real estate salespeople are required to advise you of the risks involved when representing sellers of homes that commonly fall into the ‘at-risk’ category. 

I have provided the following useful links relating to NZ’s leaky home crisis.  If you don’t know much about it, you’re about to become better informed and protected:

Department of Building & Housing media releases

Home Owners & Buyers Association of NZ – Leaky Home Info

Leaky Home Forum New Zealand

Consumer Build – What caused leaky homes

Tips for buying at auction

Many New Zealander’s seem to be intimidated by the auction process and it’s easy to understand why.  Auctions are very exciting events.  I’ve been in real estate for 13 years and I still get that surge of adrenaline when I bid on a property myself.

But if you avoid auctions because you’re uncomfortable with the process you’re going to miss a lot of good buying opportunities.  It’s usually the best properties that are offered for sale via auction, particularly in Auckland where a culture of auctions is ingrained.

All that said many buyers still perceive them as highly stressful events that lead to spur-of-the-moment decisions based on emotions rather than sensibility.

This only happens when people are unprepared.  Many people forget that pretty much all of the tough choices, such as determining your maximum price, can be pre-planned – thereby reducing the auction itself to merely a forum for executing decisions already made.

Preparing to buy via auction

You can authorise someone else to bid on your behalf.  Choose someone you trust who has auction experience, or even hire a buyer’s agent. 

Alternatively, get ready to do the bidding yourself, if you’re prepared and clued up, it can be great fun and yield a great result – here’s how.

Prior to the event

• Use your research and budget to help you identify a ‘walk-away’ price.   It’s in your interest to keep this a secret from the agent, so they don’t use this information to help the vendor set their reserve.
• Have your finance already in place and attend the auction ready to write a deposit cheque.
• Attend some auctions beforehand to experience the atmosphere and observe different bidding strategies.
• Organise any amendments to the contract, such as a longer settlement period, prior to the auction.  Talk to the agent and get agreement from the vendors in writing.

On the day

• If you’re going to start the bidding, start low.
• Project confidence – make the other bidders think you have no limit.
• Make your bids fast and assertive. Agonising over your next bid is a sign of weakness.
• Call out your offer in full (i.e. say “$350,000” instead of the increments, i.e “$5,000”).
• If it’s going to pass in, make sure you are the highest bidder, as this allows first right to pay the reserve price.
• Stick to your ‘walk-away’ price. It’s better to feel the short-lived disappointment of missing out on a property you love than the long-lasting remorse of paying too much.

Fate can play a hand in these things. If you miss a property at auction, accept that it wasn’t meant to be and look forward to finding something better soon.

Thanks to John McGrath for providing the framework for these tips.  Good luck and enjoy the ride!

Remuera – Looking for a building inspector?

Thanks to Ian Mellet of Quay Law for bringing to my attention the New Zealand Institute of Building Surveyors (NZIBS).

Over the years many buyers have asked me to recommend which building inspector or company I recommend.  Rather than point you towards anyone in particular, my suggestion is that you have a good look through the NZBIS website.

You’ll find a list of accredited building inspectors to choose from.  You’ll also find a useful FAQ page that answers questions like “what do I do if the inspector finds problems?”

Email enquiries about homes for sale

One of self-help guru Anthony Robbins best quotes goes like this:  “The quality of your life is determined by the quality of the questions you ask”.

I’ll admit it!  Many real estate salespeople provide limited information on property websites.  One of the reasons for this is ‘old school thinking’.  It wasn’t long ago that agents found buyers by placing ’teaser’ ads in newspapers.  These ads gave basic details that ‘teased’ buyers to telephone the salesperson to request more information.  Once the buyer was in the salesperson’s net, the rest was history.

These days, if you’re buying, and you send an email enquiry from a property website, you probably won’t receive a long-winded informative response.  One reason for this is because about 90% of people only ask these two questions:  Where is it and how much?

Salespeople, being salepeople, will more often than not, email you back with basic answers to your basic questions, then ask you some questions.  If you are annoyed by this, you shouldn’t be.  It’s your fault!  Any salesperson worth their salt will answer your questions and then ask you questions.

So what’s the solution?  Firstly, yes salespeople should provide more information up front.  Floor area, floor-plans, address, price, lots of photos etc etc.  Many in my industry are working to improve this basic service. I am.

Secondly, if you’re serious about buying, ask your questions, but also send a comprehensive wish-list, your price range, preferred location.  It really helps if you mention a home you have seen that you like, and even better if you mention a home that you made an offer on but missed out on.  By doing this, a good salesperson will sense the type of home you are likely to buy and will be able to help you more efficiently.

Good luck buying, we have a good buyer’s market right now.