Steps to Buying your Home

The first step before buying a home is to ensure you have a deposit saved. Most lenders will require you to have a 20% deposit for your home loan. For example, if you wish to purchase a home worth $400,000, you would require an $80,000 deposit. However, some lenders have loan products to borrow up to 90% of the property value.

You will need a support team to help you on your real estate journey. Now is the time to find and establish relationships with:

• A solicitor/conveyancer/lawyer.
  
• A mortgage broker.
  
• Your bank/lender of choice.
  
• A house insurer.

Later on in the process, you may also need to hire a property inspector.

If you have put your finances in order, calculated your borrowing capacity, assembled your team and perhaps even sought pre-approval for your home loan – well done! Now it’s time to get to know the market.

Where do I want to live?
The answer will be determined by your needs and budget and between these you should be able to work out locations and neighbourhoods that may be suitable. From there we recommend going online to:

• Research what is currently on the market in those locations, comparing price with land size and features;
  
• Look at what properties in the area have recently sold for.

Take a look at how a neighbourhood has fared over the last 5-10 years. Have prices steadily increased, stabilised or decreased over time? This data can help you determine if the property will be a good long-term investment.

Once you have found a location that fits your needs, wants and budget, reach out to local Harcourts Sales Consultant. In addition to showing you current listings, they will be able to give you all the facts, figures, and honest opinions on the neighbourhoods you are looking at.

Finding the right home, at the right price, in the right location can take some time and dedication.

We recommend going to multiple open home inspections, talking to agents, exploring neighbourhoods, and attending auctions to give you live and direct insight into the market. Take any literature on the property home and conduct your own investigations online. This ‘on the ground’ research will further your understanding of current market conditions and help develop good instincts for how much a property should sell for.

When you speak with sales consultants, be sure to ask them:

• Why are the owners selling?
  
• How long has the property been on the market?
  
• Can they provide a list of comparable sales from the last 3 months?
  
• Was it owner-occupied or rented out?
  
• Have any renovations been done recently?
  
• Have there been any alterations and were all alterations permitted and certified?
  
• Are there any covenants or restrictions registered on the title?
  
• Are they aware of any zoning restrictions or planned zoning changes?
  
• What schools is it zoned for?
  
• Which chattels will remain?
  
• Where are the property boundaries?
  
• What is the current council valuation and rates?
  
• Are there any issues with property maintenance or damage that the agent knows about? (Such as collapsed drains or leaking).
  
• Have the sellers received any offers? (And if so, how much?)

While every home has its imperfections, it is important you know what unique flaws your dream home has before you purchase and begin the process of making it yours. You will need to organise professional inspections and reports when you think you may have found ‘the one’, however, while walking through a property for the first time there is no reason why you can’t look out for the following red flags yourself:

• Damage from pests, especially termites. Look for bores through wooden frames, or dirt tubes in the foundation or exterior walls.
  
• Poor construction. Look for windows and doors that jar, and cracks in the walls around windows and doors.
  
• Wet spots or water marks on the walls or ceilings. Poor insulation can lead to damp that can cause irreversible timber decay, corrosion and even loss of structural integrity, not to mention the presence or build-up of mould.
  
• Keep your eyes peeled for large cracks in the foundation which could indicate the house is shifting.

Your long term comfort could also be impacted by the neighbours, so make note of whether or not the property offers:

• Comfortable levels of visual and audio privacy.
  
• If the neighbours have noisy pets or if there is evidence of damage to fences or common areas caused by pets.
  
• The condition of neighbouring yards. Neglected yards may devalue your home when it comes to sell, in addition to being an eyesore while you live in the vicinity.

You will also need to consider location factors and their long term impact on your health, quality of life and the resale value of the property. For instance, properties on main roads or train lines may be more affordable, but will come with noise, pollution, traffic, and are potentially hazardous for young children or pets. Power lines on larger parcels of land have been known to lower house prices, due to being unsightly and considered by many to cause long-term health issues. You will also need to determine if the property is at risk of flooding and other natural hazards, and how this may impact your lifestyle, future plans, and insurance premiums.

Before you go forward with a sale, it is important to have your conveyancer or lawyer review the contract offered by the seller.
Common conditions of sale are:

• Finance.
  
• A builder’s report.
  
• Sale of another property.
  
• Solicitor’s approval of the contract.
  
• Specialist inspection or approval.
  
• Due diligence investigation of the property and title.

When you have found a house that ticks all of your boxes and that you can see yourself living in, you will need to arrange for a building and pest inspection, and order an LIM report to uncover anything that may have been concealed from the naked eye. Sometimes these reports will be provided to you as part of the sale. If this is the case, you may still want to arrange to have your own inspections done, or have the seller’s inspections transferred to your name for insurance. If the seller has already purchased an LIM report, make sure you are given the original copy.

The best way to make a formal offer and avoid any confusion is to make the offer in writing. A sales consultant will most often provide you with a contract to start the process which will also highlight any conditions of sale. The consultant will then present this offer to the sellers.

Once an offer has been accepted, it will be time to sign the contract and pay your deposit – usually 10% of the purchase price. Once paid, this deposit will be held in a trust until the sale goes unconditional, in all respects, at which point the deposit will be transferred to the seller, along with the remainder of the property sale price from the buyer’s lender. If a contract does not go unconditional, your deposit will be repaid to you.

The average time frame between signing a contract and settlement of a property will vary, but is usually about six weeks.

A property sale is a legal transaction and a contract is to protect both the buyer and seller and outline their legal obligations. A sales contract will contain all information relevant to the sale of the property, including any conditions of sale and inclusions. Once both the buyer and seller have signed the contract and exchanged copies, all conditions of the sale have been met, and any cooling-period has come to a close, the sale will automatically go unconditional, and both parties will be legally bound and obligated to comply with the contract and complete the transaction.

Before the sale goes unconditional, you will be given the opportunity to inspect the property one final time before settlement, to ensure any agreed to repairs or jobs have been carried out and nothing untoward has happened to the property since the signing of the contract.

On settlement day, the respective parties’ teams will ensure all conditions of sale have been met. The buyer’s lender will authorise the rest of the sale price to be transferred to the seller, and the seller’s agent will transfer the deposit that has been held in a trust to the seller. The seller’s lawyers will ensure all property taxes, land transfer duty, and water rates are paid. And finally, the seller will hand over the keys to the new owner. Once this is all ‘settled’, your solicitor will register the necessary documentation with Land Information New Zealand. Possession of the property will usually take place on the same day, a big day for both the seller and buyer, who have reached the end of significant journey and are just starting a brand-new chapter. Relax now, you’re home – and take a moment to celebrate your success.