Despite everything going on in the world right now, property in New Zealand is selling like hotcakes. In fact, Barfoot & Thompson sold almost 25% more in July this year than they did pre-COVID-19 in July 2019. That doesn’t mean you can’t still buy your dream home!
The 47,000 Kiwis who have returned home since March are thought to be driving this increase in demand. Whatever the reason, it’s a competitive market out there right now so you need to be prepared if you want to snap up your dream home.
Property market research: Do your homework
If you don’t know the market you’re buying in, you risk offering too little for a property, or even worse – offering too much (shiver). When looking at a particular property and area, find out:
- What similar homes have sold for in the area recently. If you’re looking at units or apartments, find out if any other units in the development have sold for recently.
- Whether the average price in the area is trending upward or downward.
- What’s in the future for the area – are new cafes popping up on the high street? Are younger residents moving in?
- Are there any developments or infrastructure projects planned in the area? Ask your local council to find out more. A brand new train station nearby your property could increase its value significantly – as long as it’s not too near.
The more you know about the wider market and the area you’re looking at, the better you’ll be able to estimate a property’s market value. So take your time, do your research and you’ll be winning at auction in no time.
Due diligence: Know what you’re buying
Before you buy any property, you need to know everything about it. That, of course, means viewing it as many times as you need to – but there’s only so much you’ll spot. You’re going to need some help from the experts too:
- Building inspectors – especially for older properties. If the property is in particularly bad condition it may also pay to have an electrician and plumber look at it as well.
- Conveyancer – to look at land information memorandums (LIMs), check titles and sale & purchases and give general legal advice.
- Valuation – if you’re not sure what to offer, consider having an official valuation done. Sometimes these are required by the bank to approve finance, so you may as well put it to use in your bargaining too.
Due diligence is all about protecting yourself and knowing exactly what you’re buying before money changes hands. The more you do, the surer you’ll be.
Finance: You won’t get far without it
Finance should be the first thing you arrange when you start seriously looking at property or buying your dream home. Choose a lender or an advisor that you can trust and who’ll give you unbiased, expert advice to make the process as easy as possible.
The first step is to get pre-approval, which is essentially an indication from a lender that they’ll allow you to borrow a certain amount to buy property (provided your circumstances don’t change). Once you’ve got pre-approval, you’ll know how much you’ve got to spend and you’ll be able to attend auctions or make offers with confidence.
Methods of sale: Auction & negotiation
The two most common methods of sale are by auction and negotiation. You need to understand both if you’re going to snaffle that dream home of yours:
- Auction: fast-paced public sales where interested buyers bid against each other to buy the property. The most important thing to know about auction sales is that they’re unconditional: once you’ve won an auction, you’re legally required to purchase the property. If you haven’t got your finance together and can’t complete the purchase, you may forfeit your deposit and lose the property.
- Negotiation/deadline: sales by negotiation or deadline are much less stressful than auctions! Buyers will make offers based on what they think the property is worth before a set date and the seller will choose the best offer and/or negotiate until they’re satisfied.
The property market may be competitive right now, but if you get your ducks in a row, you can still buy your dream home. For expert advice on all things property and to get your finance sorted, give the advisors here at Money Empire a call now.