House Buyers – Getting a Real Estate Agent to Help You
A good real estate agent will keep in contact with potential buyers…… but this isn’t always the reality. Here are tips for getting a real estate agent to work for you.
Getting to know you - Get to know the agents in the area you are looking in. Establish which ones have the most listings or seem to most often have the listings the fit your criteria, then stick with them!
Seriously!! - Most real estate agents will not take you seriously until they have seen you around open homes for a few weeks and have had you call them enquiring about properties they have listed. You can also request to go on their emailing database to be sent new house listings and give them a ring each week when the new listings in the office have come out (usually by Tuesday afternoon).
Tell me what you want – Make your ‘Not Negotiable’ list very clear to the real estate agent. A short concise list of requirements saves everyone time.
One on one - A good idea is to arrange viewings of houses outside open home times then you can get to know real estate agents and they can get a better idea of what you are looking for. This relationship can be invaluable, giving you access to properties before the marketing starts and even letting you in on ‘quiet’ listings.
State the facts – Be upfront about your situation. Tell them you have your finance sorted, you don’t have a house to sell and you are ready to move. You are buyer gold! Put it out there.
Soon agents will be knocking down your door, and you will be getting first look at houses fitting your criteria, but don’t let your work on this relationship lapse. If you find they stop calling you, start calling them! This is a relationship that is easier to maintain then build from scratch.
You will meet many real estate agents in your house hunt and you will get an idea immediately as to whether or not you can see any value in building a relationship. You may find that no matter how hard you try, some will not take you seriously, don’t take it to heart, they are not doing their job, just move on.
Just what should you be asking the real estate agent? Find out in ‘The House Hunt’ section of the Propertytoolbox House Buying Guide.
Propertytoolbox Blog Highlights 2011
2011 has seen a lot of great info coming through the Propertytoolbox Blog. Here are my favourite articles for the year.
Sunny NZ Houses
This article about finding out if your house gets sun was a star of the blog this year. The sun aspect is quite often overlooked when buying a house, but it can be an important part of your enjoyment of the house – so check it out ‘Sun Aspect of NZ Houses – Does the House Get Sun’. This article has all the info you need to work it out.
Buyers – Get Your Real Estate Agent to Help You
We’ve told you before – the real estate agent is working for the vendor – but surely they can help you out too? Sure! And in this article ‘House Buyers – Getting a Real Estate Agent to Help You’ we give a few tips on how you can develop your relationship with real estate agents so that you can make the house buying process a bit easier.
Am I a Cash Buyer?
The ‘cash buyer’ term can be a bit of a confusing one and is often used liberally in the house buying process. Propertytoolbox wanted to explain all so that misunderstanding didn’t turn into an expensive mistake! Check out this article ‘Am I a Cash Buyer – Can I Make a Cash Offer’ and find out if you are a cash buyer.
Sale & Purchase Agreement – Checklist
Sometimes the creation and signing of a sale and purchase agreement can happen in a flash! This is a legally binding agreement you are signing so you need to take some time to check it over. In this article ‘House Sale & Purchase Agreement – Checklist’ we give you a list of things to check over before you sign – better to be safe then sorry!
The Propertytoolbox blog is taking a break over Christmas and will be back with a monthly addition in February. Have a great holiday and we will see you then!
House for Sale – Viewing a House
There are typically two ways that you can view a house for sale.
Open Homes
Many houses for sale have open homes. Details of the time of the open home are usually included in any advertising, and your local weekend paper is the most up-to-date resource for these.
There are many pros and cons to open homes. The main pro and con being, there will be other people there. This makes it near impossible to have a confidential chat with the agent if you have any questions to ask, or to do a thorough inspection. But the presence of other viewers means you can wander around the house at your leisure independently of an agent.
If you are interested, or have questions to ask, you can either ring the agent later or wait for them to call you. Don’t rely on a call from the agent, usually they will call you by the Monday night following the open home, but if there has been lots of interest, or they are not following the usual agent protocol, they may not call.
Arranged viewings
An arranged viewing is when you organise to see the house with the real estate agent at a time that suits you. Agents often need to give vendors and/or tenants plenty of warning before they can show you through a house, so you need to plan in advance for these. Also with some organisation you can see all the properties you are interested in one after the other, saving you time.
Again, arranged viewings have pros and cons. You are no longer blending into the crowd at an open home. Good real estate agents will direct your attention to good points of the house and away from bad points, this is their job. They may also try to brush over what may seem like important issues to you. Just remember they are trying to get the house sold and you should only rely on what is on record at the local council and the opinions of independent professionals like building inspectors, and valuers.
The main advantage of an arranged viewing is that there are no other potential buyers there, so you can do a thorough investigation. But try to have a look around independently of the real estate agent.
After some advice on what to look at when viewing a house - Propertytoolbox has house viewing tips and 10 quick visual checks when viewing a house.
Is Now The Right Time to Buy a House?
You have probably heard about the property cycle and that house prices have fallen, but may be recovering, and perhaps there is another recession on the horizon... how is that going to affect property prices? Perhaps the feeling is that now, with so much uncertainty around, is not the best time to buy...
Now is actually as good a time as any to buy a home if you have a stable income. Sure prices may fall, but they will also go up again and if you have a long term view, this normal cycle of house prices doesn’t really matter. Nobody really knows what is going to happen and you could wait forever trying to predict the best time to buy.
Especially when you are talking about buying a home (not an investment property) if you buy and sell in the same market (i.e. around the same time) you are going to get value for money.
If you want to wait until house prices stabilise - then one rule that you could use is to buy when prices start consistently going up again. Checking the Quotable Value Data that comes out every month is the best way to find this out, you can even subscribe to get these statistics emailed to you.
You can be confident that if you buy a house right now you will be paying less then for the same house 2 - 3 years ago and now you may even be able to afford a house in a suburb that was previously out of your reach - and you definitely have more negotiating power in the current market.
We have some more food for thought in our 'Thinking About Buying' section of the Propertytoolbox House Buying Guide.
Am I a Cash Buyer – Can I Make a Cash Offer?
Cash buyers and cash offers are two very different things but these terms are quite often used in the house buying process so it is a good idea to know what they mean.
A ‘cash buyer’ is a buyer with the ability to make a ‘cash offer’. House buyers often refer to themselves as ‘cash buyers’ when they:
- Have ‘cash’ i.e. have money in the bank and don’t need to get a mortgage, or
- Have pre-approval from their bank for lending and will not need to sell an existing house in order to buy a new one (i.e. will not need a house sale condition).
But! Many ‘cash buyers’ will never end up making a cash offer… So what is a ‘cash offer’?
If you make an offer with no conditions (an unconditional offer) then you are making a ‘cash offer’. It is not recommended that you make a cash offer unless you have completed all your due diligence regarding a house (i.e. know what you are getting into!). Due diligence can include, but is not limited to, a property valuation, building inspection, LIM, and making sure you have finance approved for that particular house for the price you are offering i.e. all the stuff that you would normally have as a condition…
Once a cash offer is accepted you have ‘gone unconditional’, skipping the period between ‘under offer’ and ‘gone unconditional’ that exists when a conditional offer is accepted. If you make a cash offer and it is accepted you have now bought a house and on the possession/settlement date you will be required to have the funds to complete the purchase.
So you may be a cash buyer – but will you ever make a cash offer? That is for you to decide…
Need to find out more about financing and making an offer – check out our Mortgages and Money section and the Propertytoolbox House Buying Guide.
I Can’t Get a Mortgage – What Can I Do?
The days of the 100% mortgage seem to have gone (for now). You generally need a 5-20% deposit to be able to buy. This means that you will only be able to borrow 80-95% of the purchase price of the house you want. Going on the average New Zealand house price this means you should have around $20,000 - $75,000 in your savings account…
If you don’t have that sort of money, you can go about getting it by starting on a savings plan – you may be surprised how quickly you can save a significant amount – try diverting that extra money you worked out could go towards a house (mortgage payment, maintenance, rates and insurance etc) to a savings account – only pay your rent out of this account, and watch it grow. This is actually a really good way to find out how you cope with the costs of owning your own home, and evidence of a good savings history will make any bank happy!
If a 5-20% deposit is years away, or likely to never eventuate, or you just want a house now, there are other options available. For a start some banks do not strictly enforce the 80-95% rule, so shop around. A good mortgage broker could be your best bet in this situation.
You could also get a guarantor. This means you could get someone else to guarantee that you will be able to pay your mortgage and if you don’t, they will pay it for you. Usually parents are good places to start if you are looking for a guarantor. They don’t have to be a guarantor forever! When capital gains or improvements mean that you now own 5-20% of the current value of your house, you can get the guarantor removed (subject to your banks approval).
You could be gifted your deposit. Banks like it best if you have saved your deposit as it proves you have stable finances and will be able to make regular repayments. But, if you have no deposit they often accept a gifted deposit (money given to you with no legal right to claim back) or a co-borrowed deposit with another person, again probably a parent.
Co-buying is also an option - that is buying a house with a partner, relatives or friends. Or, if you are only planning to buy a house worth less than $280,000 (or up to $350,000 in some areas) you can check out the government scheme called Welcome Home Loans that helps people with no or small deposits buy or build their own homes.
Need more information on mortages – you need our Mortgages and Money Section.
How Do I Get a Mortgage?
A good place to start is your current bank’s website. Most banks have information about mortgages and ‘how much can I borrow’ calculators. Be careful when using the calculators, the amount they say that you will be able to borrow is likely to differ once all your personal circumstances are taken into account.
Propertytoolbox has some favourite bank websites; Westpac and National Bank have great information and calculators.
If you are after a competitive deal, and interest rates will be a big factor in your decision, you can start by checking out all the banks’ interest rates. The website www.interest.co.nz is great for this. Many banks also advertise products and specials on this website – so have a good look around.
Ringing your current bank or a mortgage broker is a good way to begin the process - outline your situation and see what they have to say. If you are happy to continue after these initial discussions it is a good idea to go and see them in person. Your current bank may be more then happy to lend you money to buy a house, but make sure you approach at least one other bank, this way you will know if you are getting a competitive mortgage product. Also you may be able to use this information to negotiate a better deal.
You will need to prepare a pack of information about yourself. It will include at a minimum - proof of identification and pay slips (or proof of income) for up to two years depending on your employment status (permanent, contractor, self employed etc).
There is a lot of paperwork involved in mortgage applications, so be prepared! You may be required to provide all sorts of information ranging from 3 months worth of transactional bank statements, to business accounts, and even proof of residency. And there will be very comprehensive forms to fill in, different ones for each bank. It can be a long and tiring process!
If you have unusual circumstances, a mortgage broker is probably the best way to go about getting a mortgage.As with most things – the more you shop around and negotiate, the better the deal you are going to get, and the more likely you are to find a mortgage that will suit you. So be prepared to do some hard work to get a good mortgage.
Want to find out what lenders take into account when working our 'how much can I borrow' head here. Need more information on mortgages - the Propertytoolbox Mortgages and Money section has it all!
For Sale By Auction – Before The Auction
So the house is ‘for sale by Auction’ - this puts a lot of new home buyers off – but get to know the process and you will be able to make good decisions about buying at auction. This article is here to help you with thinking about buying a house at auction and what you need to do before you go to the auction to bid.
Houses for sale by auction are rarely advertised with a price – this is often the reason for the Auction – the price of the property is hard to determine – and the seller of the property has decided that there will be enough unconditional interest in the property to make an auction a good option for selling & determining a market value. So you need to work out the price for yourself – you are ‘the market’ after all!
Sometimes a vendor is only after an unconditional sale, quickly, and an auction is seen as a way to achieve this – so don’t assume that if a house is for sale by auction that there is going to be lots of people interested or that you are going to have to pay a premium – you may be the only one who turns up on the day…
A house for sale by auction is usually marketed over 2 – 3 weeks with the auction date included on all the marketing information for the property. If you want to buy a house for sale by auction you (usually) need to bid. You do not have to be at the auction in person, you can organise to bid over the phone, or you can send someone to bid on your behalf.
Sometimes, in the fine print, a vendor is open to offers before an auction, be aware of this and make sure you register your interest in the property with the real estate agent so that if any pre-auction offers come in – you get a chance to put in your offer too. A good real estate agent will never turn down to opportunity to create a competitive offer situation!
When you buy at auction you are buying unconditionally. This means that if you are the highest bidder, and the reserve is met, you have effectively made a cash offer that has been accepted and this is legally binding. If you are unable to make a cash offer, don’t give up, if a property does not sell at auction, conditional offers will usually then be considered.
Therefore, if you are planning on buying at auction, you need to make sure that all your conditions have been satisfied before you bid. Get your property valuation, building inspection, and your LIM, confirm your finance, get your lawyer to check the title and make sure you have done your personal inspections and research into the property.
Attend a couple of auctions as a spectator before your auction - find out who the auctioneer is going to be at your auction and check out their stlye - some are a lot more understandable then others, and most have different techniques for handling vendor bids.
By the time you are standing (or sitting) in front of that auctioneer you have probably already spent a fair bit of money on the house. It is very important to not let that affect your bidding. You need to set a budget and stick to it! Easier said then done when you already have an emotional and financial investment in the house. Perhaps someone bidding on your behalf is a better way to go….
So now you are ready to bid – good luck! The full run down of Auction is in our House Buying Guide article ‘For Sale By Auction’.
House Sale and Purchase Agreement – Checklist
You are putting an offer in on a house, the sale and purchase agreement has been drawn up (usually by the real estate agent) it is time to sign - for your own peace of mind check that all of the following are correct:
- Date - is the agreement dated correctly (at the top).
- Purchaser – The name(s) of the person(s) purchasing the house.
- Property - The Address, Estate, and Legal Description of the property – these should be the same as on the title document which can be provided (and checked) by your lawyer.
- Purchase Price – what you have offered - both in numerically and in words.
- Deposit - The deposit amount - these are funds that you must have available to pay if/when the contract becomes unconditional.
- Possession - Check that this date (the date you want to take over ownership of the property) is correct.
- Conditions - Check these are correct and agreeable to you.
- Tenancies – Check to see if there are any
- Futher Terms of Sale - These are also referred to as 'Conditions'. Check that any conditions you require are present, are worded correctly, and are agreeable to you.
- Schedule 1 (Chattels) - Are these what you expect.
- Check that all the pages of the agreement are present
- Check that no clauses in the agreement have been crossed out - if they have - find out the reasons and the implications.
- Check that all the pages and amendments have been initialled.
Be careful when checking the name of the purchaser(s). You need to correctly name all of the people who will be owners of the property. These names can be people, company’s or trusts. If you are unsure who the purchaser of the property is going to be – you can add ‘or nominee’ after the purchasers name (i.e. John Smith or Nominee) – this gives you scope to change the name. But it really is best to know exactly who/what is going to be purchasing the property when filling in the sale and purchase agreement. Remember any change to the contract – even a change to the name is considered countersigning.
There can be conditions added to the sale and purchase agreement on both the first (Conditions) and ninth (Further Terms of Sale) page of the agreement. The 'Conditions' section provides a structure to the way in which the conditions are dealt with in the body of the agreement. Any conditions that are specified in the 'Further Terms of Sale' section can be drafted to meet your requirements - which is often preferable.
Tenancies can be an issue – if the property is tenanted check to see what the tenants lease agreement is. If they have a fixed term tenancy they have a legal right to live in the house until the end of the fixed term. If it is a periodic tenancy – 42 days notice needs to be given to the tenants (if you, or your family) are going to move in. For more info on tenancies check out the tenancy section of the department of building and housing website.
When you have finished checking have one final think - have you done all you possibly can to assure yourself that you know what you are signing? Are you feeling pressured? Don’t worry about taking a bit more time to do some more checks and research. Don’t sign until you are assured that you know what you are committing to.
Finally - It is always best, and we highly recommend, sending your sale and purchase agreement to your lawyer to look over before you sign.
For all you need to know about making an offer on a house – check out the Propertytoolbox house buying guide.
Sun Aspect of NZ Houses – Does the House Get Sun?
How do you work out if the house you are looking to buy gets any sun? The first house I ever bought had a lovely sunny deck and sun streaming into windows when I bought it in March – but spending the winter looking enviously at houses over the street basking in sunshine while my house did not get one single speck of sun for 3 months (due to an inconvenient hill…) was not fun…
I made it a mission from then on to find out all about the sun when I bought a house and now I am going to give you a few tips and tricks as to how to get a good idea of sun.
What parts of the house and section that get sun come down to three things, compass orientation, time of the year, and obstacles.
Compass Orientation
This is the most important. To find out your houses compass orientation, find north, you can usually work this out using a street map. All maps, including Google maps are orientated with north straight up. Now work out how your house is orientated around this north point. The north facing side of your house is going to be the sunniest side; the sun comes around from east to west during the day, spending the most time shining on house north faces. The eastern and western house sides will get morning and afternoon sun and the south facing side of your house will get a small amount of early morning or late afternoon sun at the peak of summer – i.e. south facing sides get basically no sun. Moss coated, dank walls are often a south facing give away.
Time Of The Year
During the summer the sun is higher in the sky and will penetrate into rooms of your house less. During the winter, the sun is lower in the sky and will often shine further into rooms because of this lower angle. The sun is also lower in the morning and afternoon at all times of the year, so eastern and western sides of your house will get more penetrating sun. The sun moves from nearly south-east to nearly south-west at the height of summer (taking 15 hours) and moves from nearly north-east to nearly north-west (taking 9 hours) mid winter. As a guide – the sun is half the height in the sky mid winter then it is mid summer and around 12-1pm is when the sun is at it’s highest (zenith) – good time for an open home…
Obstacles
Backing onto a hill, a big tree, a large neighbouring building can all have an effect on your sun. They may not have a major affect all year, but it is usually the effect of these obstacles in the winter (just when you appreciate all the sun you can get) that can really impact your enjoyment of a house.
Remember sunlight is one of the hardest, if not impossible things to change about a house – so it pays to work sun out when you are looking at buying new house. Some final tips - the neighbours (on the same side of the street!) may be able to give you some sun insight, or you could drive by the house at different times of the day to check out the sun. A good way to get to know sun is to think about the house you live in now, what's its compass orientation? Where does the sun comes in to that house and when? If you can superimpose what you know about sun in your current house, on a new house, you can get a good picture of sun.
Want to know more about sun, or just want the technical bits so you can use your compass? We have a big section in the Propertytoolbox website – the ‘Here Comes The Sun Guide’.
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