Guide To Purchasing A House

Purchasing A House

Take Your Time
Don't rush into buying a house. Take time to learn about the local housing market.

Finances
If you need a mortgage, you can arrange it easily with a bank. New Zealand banks usually approve mortgage applications quickly.

Learn About the Property Market
"Open homes" are popular and are usually held at weekends. You are welcome to look around an open home without making an appointment first. Visiting open homes is an excellent way to learn about the housing market.

Another way to see lots of houses quickly is to go on a tour with a real estate agent. Agents are usually happy to spend time driving overseas buyers around, hoping for a sale. Agents earn significant commissions on house sales so you will find many who are willing to show you a good selection of houses.

Fixed Price and Auctioned Properties
Once you've found a house that you like, the next stage is to make an offer for it. Most New Zealand property is offered at a fixed asking priced. Unless the market is red-hot, it's normal to offer less than the asking price. Sometimes you will find houses offered by tender - no price is indicated and offers are sought. Your local research will enable you to gauge an appropriate offer.

Selling houses by auction is also popular. Occasionally a bank will force an auction when people default on their mortgage payments. Auctions usually take place when there is likely to be a lot of interest in a property and competitive bidding.

Make Sure Your House is Well-Built
If you intend to bid at an auction, you'll need to sort out the buying process beforehand. You'll need a solicitor to check the property title. You should also get an independent valuation of the house and have a building inspection carried out.

A document you must see before completing a purchase is a Land Information Memorandum (LIM). The LIM contains information from the local council about a property's zoning, boundaries, building consents, etc. For a copy of a LIM, local councils charge anywhere between $100 to $400. This is expensive, particularly if you do not buy the property.

Once you've got the LIM, it's a good idea to visit the local council's building department to discuss it. You can ask for any additional information they have on the property - often they have more than they've included in the LIM.

To learn even more about any house that interests you, you can pay a fee to the government's Quotable Value.

Making an Offer For a House Selling at a Fixed Price
If a house is selling at a fixed price, you will normally make an offer through the real-estate agent. The process usually involves offer and counter offer until you reach an agreement with the seller. During this negotiation the seller may agree to remedy any faults your building inspection has uncovered.

You are entitled to attach conditions to your offer. You may make the offer conditional on obtaining a satisfactory inspection report or a satisfactory LIM report or your offer may be conditional on your own house selling. Even if the seller accepts your conditional offer, you need to be careful. If someone comes along with an unconditional offer, the seller can accept this offer - leaving you to start house hunting all over again.

When your offer goes unconditional you will be expected to pay a ten percent deposit on the purchase price.

Making an Offer for a House Selling at Auction
If a house is being auctioned, you may make an offer before auction day. Just be aware that your offer is legally binding. It has legal status as an auction bid, albeit an early one. You therefore cannot attach any conditions to it. The seller is at liberty to accept or reject your bid, or continue with the auction on the planned day. The seller could hold your early bid in reserve, hoping for higher bids on auction-day.

If a house goes to auction, don't be surprised if you find yourself bidding against the sellers - an agent is allowed to make bids on the seller's behalf. If you suspect you're in a bidding war against the sellers, you should probably stop bidding.

If you buy a house at auction, you need to have funds available immediately for settlement.

In Conclusion
A few days or weeks after your offer is accepted, you should at last be able to move into your dream house in New Zealand.