|
Mortgage Information Service
There can be lots of questions about mortgages, buying houses,
areas to buy in, areas to avoid, best types of insurance etc. The
solutions can be as individual as you. That is why we encourage you
to talk to our experienced professionals, before you make a buying decision. It doesn't
cost anything and can prove invaluable, as we have built up a storehouse of
information over the years we have been in business, helping others and
buying property for ourselves, etc.
Call us on
0800 005 066 or email enquiry@mortgagehelp.co.nz
with your questions.
Here is some
information that may help:
Always talk to our experienced advisors first - saves time,
hassle and money.
Property Checklist 1: What do you want in a house?
·
Do you like brick or
timber or doesn't it matter?
·
What suburbs do
you like?
·
What suburbs do
you dislike?
·
How far are you
prepared to commute to work?
·
How many bedrooms
do you want? (A three-bedroom house is usually easier to resell than
one with two bedrooms.)
·
Do you need a
fenced yard? (The front fence is easy to do yourself, but having to
build fences between you and the neighbours if they aren't already there
can be stressful and can come at a time when finances are restricted.
Remember that sometimes 'Good fences make good neighbours'!)
·
Is there garaging
for your car/cars?
·
Do you need public
transport and is it available?
·
Do you need
schools and shops to be handy?
·
Does the house
have, or is it adaptable for, wheelchair access for a friend or relative?
·
Is the kitchen eat-in
or is there a separate dining room?
·
Do you want
walk-in wardrobes/en suite/ pantry/second toilet?
·
Do all extensions,
buildings, pergolas, sheds (even pools) have council approval?
·
Does the house
have a code of compliance certificate (fully approved by council)?
·
How long before
the floor coverings need replacement.
·
Do all the doors
(including cupboards) and windows close easily?
·
Check taps and
toilet flushes for problems. Are the pipes noisy?
·
How long does it
take for hot water to come through?
·
Are any of the
ceilings stained or is any wallpaper peeling from a leaky roof or drain?
·
Are all buildings,
sheds, improvements and portable extras included in the contract?
(Including satellite dishes, aviaries, garages etc. If in doubt,
include it.)
Make sure you:
1. Know
where you stand financially before you begin,
2. Know
what you want, or at least the basics of what you need in a house, and
3. Never,
never, never sign anything on the day no matter how many other people you
are told are looking at the property! You need time to check off
everything on the following property checklist. Tick each item off as
you work through them, adding any other points that apply to your needs,
and if you want to make further notes use your workbook.
Property Checklist 2: Before you sign anything!
Warning: Failure to take the simple precaution of
working through this checklist before
you sign any legal documents may leave you sorely sorry in the future.
·
Request a Land
Information Memorandum Report (LIM Report) from your council. This
report includes details of all town planning issues, certificates,
schedules, consents and permits held by the council on the property, as
well as any special site features such as wind zoning or flooding.
·
Is the property on
a freehold, cross lease or unit title? Make sure you understand the
implications of cross-lease or unit titles - talk with your solicitor.
·
Check on your
neighbours. Talk to them. Look around. Listen.
Sniff the air. (Are they shift or day workers? Do they have any
disgusting habits, home businesses or pets that you cannot live beside?)
·
Inspect the
property and neighbourhood noise level after dark. (Drive past it
several times or take a walk down the street or around the block - being
careful not to get mugged!)
·
Ask neighbours
about possible pollution or terrible smells from nearby industry.
·
Get someone to
check the structural integrity, stumps, roof, plumbing and electrical; and
check for dry rot, mice and bora.
·
Ask local
businesses about flooding levels. Asking neighbours can be
unreliable.
·
Check for the
public facilities, schools, shops and transport that you need.
·
Ring the council
to verify rates, rateable value and ensure all structures, additions and
extensions have approval or have been erected long enough not to require
approval.
·
Do you want the
phone number to stay with the property?
·
·How long have
the previous owners had it, and why are they really selling?
If a number of owners have owned a property over a short period of time, or
if it goes up for sale every time it rains heavily, then there could be
something seriously wrong. Ask the council and neighbours.
·
How long has the
property been on the market? If it's only been a short time, the
vendor may not budge much on price.
Value for Money Check
There are two checks you can make for investigating a
property's value for money - I usually do both of them.
·
First look at
similar properties in similar areas to see what prices are being asked and
see if it's roughly the same.
·
Secondly, find out
how much the current owner paid for the property.
Remember
that just because someone sets a price, it doesn't mean the property is
worth it.
You can find out how much the current owner paid from Quotable
Value, the company that took over from the old government-owned Valuation
New Zealand.
Always
talk to our experienced advisors first - save time, hassle and money.
Be aware that when signing a real estate contract you are
signing just that 'a contract'. This is binding once signed by all
parties. If you are not seen to be performing to the utmost on your
part of the contract (say in satisfying conditions) then you could be taken
to court and virtually cleaned out. We have seen some horror stories
because people don't understand the impact of contract law. Get legal
advice before
signing or you may run a contract pas us, so we can ensure you are
protected. Also ask your real estate agent for a blank contract - so
you can see what you are in for early on.
Always talk to our experienced advisors first - save time,
hassle and money.
Unconditional
Date
The unconditional date is the date on which the last of any
condition inserted into the agreement is due for satisfaction.
Possession
Date
This is the date you can move into the property or take
physical possession.
Settlement
Date
This is the date that all or where a deposit has been paid,
the balance of the purchase price must be paid. Settlement date is
commonly agreed to be the same as the possession date.
DEPOSIT
A common misconception is that the deposit is not payable
until the agreement becomes unconditional. Unless this is specified
in the agreement, the deposit is payable immediately upon the signing of
the agreement. Deposits are frequently 5 to 10% of the agreed
purchase price but there is no minimum deposit and the amount can be
negotiated with the seller. Make sure whatever your deposit terms are
that you have sufficient funds available to pay it when it is due - either
on signing the agreement or on a specified date.
If you do not have the funds yourself, contact your
broker. It is a good idea to pre-arrange finance when you decide to
start looking for a property. This will also give you an idea of what
your budget is.
CONDITIONS
In many instances, you may wish to make a conditional offer to
allow you further time to arrange finance or carry out further checks on
the property. Common conditions you may wish to consider making your
offer subject to include:
·
Finance being
approved
·
Satisfactory
independent valuation
·
Satisfactory title
search
·
Satisfactory
building/engineer's report
·
Satisfactory LIM
report
·
Sale of your existing home.
Any
condition you instruct the real estate agent to insert into the agreement
should state that it is for the "sole approval and benefit of the
purchaser".
Finance
Condition
This condition gives you time to arrange finance. Try to
allow at least 5 working days from the date the agreement is signed to
arrange finance (and a valuation if required).
Independent
Valuation Condition
Where you have already obtained pre-approval finance from a
lender, you may still need to obtain an independent valuation of the
property to determine the amount of your loan. You may also want to
obtain an independent valuation if you are unsure about the purchase price
agreed. Go over this with us.
Title
Search Condition
This condition specifies that the agreement is conditional
upon your (or your solicitor's) approval and satisfaction of the title to
the property. Your lawyer will make a search of the title to the
property to check there are no problems with the legal title and advise you
on what restrictions apply.
Building/Engineer's
Report Condition
You may want to hire a builder or engineer to inspect the
property to make sure it is structurally sound and identify any repairs
required. This condition should allow you to request the seller fix
the problems or re-negotiate the purchase price to reflect the cost.
Try to contact a builder or engineer in advance of making an offer to check
what time frame you should allow in the condition and the cost.
LIM
Report Condition
A LIM report is a Land Information Memorandum report from the
local council where the property is located. The report provides
information on the property which the council holds on its files, eg
building permits issued, subdivision or land use consents. If you
select the LIM condition option in the standard agreement for sale and
purchase, you have 5 working days to request the LIM report and 15 working
days to advise the seller of your approval of the report. This period
may be changed.
The cost of a LIM report and the processing time varies from
each council. In Auckland
the average cost is $200.
A LIM report will only give you the information that the
Council holds on a property - which may be limited. See the section
on "Protecting your interest in the property". If you have
made your offer subject to a LIM report condition, we suggest you contact
us first to discuss your options.
Sale of Purchaser's
Property Condition
If you are relying on the sale of your existing home to
finance your purchase of another property, you can make your offer
conditional on your signing an agreement for the sale of your existing
property, on that sale becoming unconditional or on the settlement date for
the sale. This condition must be carefully linked to the correct time
frames in the sale agreement and allow you sufficient time to confirm
whether the conditional event has happened. For example, if your
offer is conditional on settlement of the sale (which may occur at any time
until 5.00 pm on settlement date) ensure your condition stipulates you have
until at least 6.00pm on settlement date or the next working day to advise
the seller. If you do not go to 'sufficient' effort to sell your own
place, you could face legal action if you fail to sell. This cost one
couple in 2007 $400,000.
UNCONDITIONAL
AGREEMENTS
It is important to remember that once the seller signs the
agreement, you are bound to go through with the contract subject to
whatever conditions you have included in your offer. This means that
unless you have included conditions in your offer, you have entered into an
unconditional agreement to buy the property. At this point, it is
irrelevant that you do not have sufficient finance to proceed or you discover
a problem with the property.
Do not enter into an unconditional agreement unless you have
conducted thorough checks of the property before making your offer, have
arranged sufficient finance and sought advice from your lawyer.
Remember that even if you have pre-approved finance, most
lenders will still require you obtain an independent valuation to calculate
your loan amount. You must ensure you have adequate funds yourself to
make up any shortfall between your loan amount and the purchase price.
AUCTIONS
It is increasingly common for properties to be sold by
auction. This method of sale is equivalent to an unconditional
agreement meaning you must carry out all your checks before the auction
with no guarantee you will be the highest bidder. If you are the
highest bidder at an auction and your bid meets the seller's reserve price,
you are bound to buy the property. Most auctions require a minimum
10% deposit is paid following the successful bid at the auction and a
settlement date of between 30 and 90 days from the auction.
SALE BY TENDER
The tender process involves making a written bid to the seller
with your best offer. Your offer can include conditions. The
seller can then consider all bids received and can accept the bid they
consider the most attractive. Most tenders will require you to
include your deposit with the bid which is refunded if you are not
successful.
|
