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.

Buying at Auction

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...

The Marketing Campaign - Before the Auction

A house for sale by auction is usually marketed over 2 – 4 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!

Buying at Auction is an Unconditional Offer

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.

Get Familiar With the Auction Process

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.

Let's Do it! Buying at Auction

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...

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The Propertytoolbox Home Buyers Guide

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’.

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 the sale and purchase agreement is correct.

Your Sale and Purchase Agreement Checklist

• 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.
• The price you want to pay for the house – what you are offering - both 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 to be included - is anything crossed off or excluded.
• 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.

Who is the Purchaser on the Sale and Purchase Agreement?

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.

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.

Adding Conditions to Your Sale and Purchase Agreement

There can be conditions added to the sale and purchase agreement in both the 'Conditions' section on the first page and the Further Terms of Sale section later on in the document.

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 Noted on the Sale and Purchase Agreement

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 services website.

Check With Your Property Lawyer

It is always best, and we highly recommend, sending your sale and purchase agreement to your lawyer to look over before you sign. Especially if there is some unusual conditions, sections crossed out or anything you are unsure about or have questions about - run them past your property lawyer.

Are You Ready to Sign?

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.

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The Propertytoolbox Home Buyers Guide

For all you need to know about making an offer on a house – check out the Propertytoolbox house buying guide.

How do you work out if the house you are looking to buy gets any sun? Read on to find out the answer to this very important question when buying a house in NZ.

Does the House Get 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 a houses north facing exterior walls.




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. External walls that are moss coated 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 rough 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.

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 Sunny 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.

Another 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.

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The Propertytoolbox Home Buyers Guide

Want to know more about sun, or just want the technical bits so you can use your compass? We expend on this info in the Propertytoolbox website – the ‘Here Comes The Sun Guide’. You can even buy a comprehensive guide to it all to take with you with the Sun Guide eBook. Just after more advice and info? Head to our Home Buyers Guide.

Mortgage interest rates and what they are doing is always something to be aware of when you have, or are thinking about having, a home loan. Forecasts for home loan interest rates can change quickly so it pays to keep an eye on interest rates on a regular basis – especially if you are looking at buying a house, have a variable rate mortgage (or floating rate mortgage), or have a fixed term mortgage about to come off its fixed rate.

There is agreement amongst NZ economists that given current economic information interest rates will be going up sometime in the next 12 months. At the moment (March 2011) most major NZ banks economists are forecasting that interest rates will have increased by 1%, 2 years from now. How and when this increase will occur is predicted slightly differently bank to bank. Most banks are not expecting a variable mortgage interest rate rise (as a flow on effect from an increase in the OCR) until somewhere between June and September 2011 and a few banks are even suggesting that the OCR will stay unchanged until early 2012.

Given current predictions most economists are recommending to keep your borrowing on a variable or floating rate for now.

Remember though – fixed interest rates will increase well before the OCR goes up – as soon as banks economists are surer about when they think rates will increase they will start factoring this into fixed rates. So if you are looking at fixing eventually – keep a close eye on the fixed rates and economic commentaries over the next few months. And as a general rule – when you do fix - try to fix for no longer than 2 or 3 years.

Major happenings - like the Christchurch earthquake can change interest rate forecasts overnight. This event has decreased the chance of an interest rate rise in 2011 significantly and we may even now see interest rates go down.

Want to find out more about the OCR – we talk all about it in our Propertytoolbox Blog article – ‘The OCR and your home loan interest rate’.

The guys at interest.co.nz have put together a good summary of what the chief economists of the big retail banks in NZ are predicting regarding mortgage interest rates this year. Check out the article ‘Where mortgage rates and term deposit rates are headed over the next year or two and why’.

Do you want to see for yourself what the banks economic experts are saying? Here are some useful links:

BNZ Weekly Overview

Westpac Economic Reports & Latest Economic Overview

National Bank Economic Forecasts

ASB Economic Media Centre

Kiwibanks Economic News

ANZ Economic Markets & Research – Property Focus

At Propertytoolbox we have some advice and tips on how to make your fix/float decision. If you are after info on just what fixing and floating is - check out our structuring your home loan advice.

The Propertytoolbox Blog will be coming to you monthly in 2011 - on the first Tuesday of the month. So keep us bookmarked or in your RSS feed for relevant NZ house buyer's information!

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Your property lawyer has an important part to play in the house buying process and lawyers rated a mention in many a Blog article in 2010. Here are the articles that highlight how helpful (and essential) a lawyer is when buying a house – read on and you will realise why it is a good idea to get a quality property lawyer early on in the house buying process and then make good use of them!

1. Your Property Lawyers Tips on House Buying Traps

Your property lawyer has experience in multiple house buying and selling transactions. They know all about what can go wrong, what things most commonly do go wrong, and what mistakes people make. This article has info on what a property lawyer thinks are the most common traps of house buying.

2. The Title Search

Here at Propertytoolbox we think it is really important to get a title check done really early on when you are thinking about buying a house - it is a cheap (and quite often free - if you have a nice lawyer) way of find out a lot about a property - it can really save you time and money as sometimes the title holds a few surprises! We tell all in this article 'A property title search - what is it?'

3. Lawyers & Settlement

Just what is your lawyer up to on settlement day? This is your lawyers big day in the house buying process - though they have helped you out with advice and a few checks up to this point - settlement day is the day where all the action happens! So just what happens? Find out here in our article on 'What happens on settlement day - the lawyer'.

These blog articles give some insight into what your lawyer is up to - the legal stuff re buying a house. If you want to find out more - check out the settlement section of the Propertytoolbox house buying guide.

Making an offer on a house is quite often done too quickly and not enough is known about the kind of commitment you are about to make.

An offer on a house quickly turns into a legally binding contract – you need to be aware of this – you will not be able to get out of a contract once it goes unconditional – so make sure you know what you are doing when you make an offer!

Making an Offer - the Highlights

In the Propertytoolbox Blog we have often delved into the subject of making an offer - here are our highlights:

1. Tendering on a House

We had a lot to say on this subject so we created a 3 part series on the tendering process. Firstly we covered off ‘Making a tender on a house - What is a tender' then we went into detail on 'Making a tender on a house - Putting in your tender’ and then we did the after match analysis in ‘Making a tender on a house - After your tender has been made’. Reading this series will let you in on the mysteries of the tendering process.

2. The Sunset Clause

A sunset clause is a condition that can be included by you or by the vendor in a sale and purchase agreement. They are not commonly used, but can be useful. In this article ‘Sunset clauses – What are they?’ we go over why and when you may want to use a sunset clause – and why the vendor may have included a sunset clause.

3. All About Countersigning

Countersigning is common – a very large proportion of house purchase negotiations involve haggling on price and conditions – and therefore will involve countersigning – especially in today’s market. This is actually one of the most common questions we get here at Propertytoolbox. So find out all about it in our ‘What is countersigning’ article.

The Propertytoolbox Home Buyers Guide

For more tips, tricks and advice – read on in our Home Buyers Guide. And if you are about to make that offer – head straight to our ‘making an offer on a house’ section.

Just how much should you pay for a house? This is really up to you to decide - BUT the more information you have to hand about the about the house itself, about comparable properties, about the state of the housing market, and about how all of these things will reflect on the value of the house - the more informed a decision you can make about the worth of a house.

A few Blog articles in 2010 touched on things that might help you work out the value of a house and here they are again for you to browse over:

1. How Much Should I Pay For A House?

This article has links to a number of resources you can use to work out market value and gives some tips and suggestions on what you should think about when you are working out the price you want to pay for a house. So if you are trying to work out the money bit check out the article ‘How much should I pay for a house?’

2. The RV and House Price

The RV of a house can be a bit of a wild card when it comes to working out what a house is worth – sometimes it is best to ignore the RV altogether – while other times it can be spot on! In our article ‘Is the RV a price guide’ we tell all about what the RV is and how it can (or can’t) be use to determine market value.

3. What Are House Prices Doing?

There are many things that can influence the housing market – the state of the economy, interest rates and house prices themselves are the obvious ones. In this Blog article we point you towards some good analysis of factors influencing the housing market – there are some things in here that may surprise you! Check it out – ‘House prices in NZ – where are they going?’

This is the last Propertytoolbox Blog article for 2010 – we will be back in the middle of January with some more great highlights from 2010 – and we are looking forward to bringing you some more meaty house buying information in the Blog in 2011. Don’t forget – you can always reference the house buying guide for good basic house buying advice anytime you need it. See you next year!

Making an offer on a house is a big step! The first time you make an offer can be quite nerve wracking! Here are some of this years best articles from the Propertytoolbox Blog that have tips, tricks and advice for you before you make that offer.

1. Take Your Time!

This is the best advice we can give – take your time, don’t be rushed. This is probably the biggest financial decision of your life so don’t hurry into it. We talk more about this in ‘Sleep On It!’ – which is part of our 10 key rules before you make that offer. And we delve a little bit deeper in the blog article ‘I Want To Buy A House - Take Your Time’.

2. Thinking About Getting The Experts In…

Should you get a building report, a valuation and a council LIM before you make an offer? This can be a tough one to decide. We talk about the pros and cons of getting these reports before making an offer in the article ‘Should I Get a Building Inspection, a Valuation and a LIM Before Making an Offer’ it could help you decide.

3. Question The Agent

The real estate agent will know stuff about the house, and if you ask they are obliged to tell you. So make sure to ask! This can be a helpful short cut to finding out information about the house that could affect your offer. Depending on the agent they can be a real mine of information – make the most of this. Here are the Propertytoolbox recommendations on what to ask in ‘Questions to Ask the Agent’.

4.  Ten Things To Look At When Viewing A House

Make sure you make the most of your house viewings. Right from the beginning, if you find yourself interested, start taking note of the things that really matter to you, things that will affect price, and that may be a deal breaker – no point wasting time! We have a top 10 things to look at blog article that gives you a place to start in ‘House Viewing Checklist – 10 Quick Visual Checks’.

There is a whole lot more good advice if you are thinking about making an offer on a house in the Propertytoolbox house buying guide – make sure to check out the I've found a house and making an offer sections.

The Propertytoolbox Blog has been full of great stuff this year. I have my own personal favourites and I thought I would share them with you. These articles were ones that I thought had some really helpful and useful information – giving you some key knowledge that could help you to make good house buying decisions! And that is, after all, what we are all about here at Propertytoolbox.

My Propertytoolbox Top Five

1. Scrim and Sarking.

This 4 part series of articles was packed full of information on Scrim and Sarking (a common wall lining in NZ houses). We started with explaining what Scrim and Sarking is and how to identify it. Then we went on to discuss why you need to think about replacing Scrim & Sarking wall linings. This article was followed by one on re-gibbing and what that involves and then finally on to the cost of replacing Scrim and Sarking wall linings. The series had some fantastic photos too, this was my favourite photo of the year.

2. The OCR

The OCR (Official Cash Rate) is an important part of your life when you have a mortgage – and it really helps to understand what it is about when you are deciding about fixing or floating your home loan. Our article ‘The OCR and Your Home Loan Interest Rate’ talks all about it – so have a read and maybe the OCR will not longer be a mystery!

3. Viewing a House – 10 Quick Checks

The advice in this article could save you a lot of time and energy! In it we list 10 quick visual checks you can do when you go to view a house. These few checks can give you some insight into things that you may have missed otherwise and may only come to light at future viewing or even in a building inspection as part of an offer.

4. Costs of Home Ownership

Sometimes only the full impact of the financial commitment of home ownership becomes clear when it is too late. This explains all, and may highlight things/costs you haven’t even thought of. It always pays to make any house buying decision fully informed so this article ‘House Maintenance Budget? Costs of Home Ownership’ is a must read.

5. Property Valuation

So you want a property valuer? How about a website that profiles your local property valuers allowing you to compare, choose and contact them? Propertyvaluationnz.co.nz does all that! Propertyvaluationnz.co.nz was launched by Propertytoolbox this year and I think it provides an awesome service for home buyers in NZ – find out more about it in the Blog article ‘Property Valuation NZ – Helping You Find a Property Valuer’.

So there you have my top five. Over the next few weeks we will be going over more of our ‘Best Bits’ from the Propertytoolbox Blog for this year. Do you want more great house buying information right now? Head straight to our house buying guide.