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Buying a house in NZ

Buying a house in NZ

Old Apr 1st 2014, 7:19 pm
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Default Buying a house in NZ

We are moving back to NZ in the summer and have seen ( at last ) a property that we really like. The CV is 750,000 valuation 900,000 and asking price 985,000 so quite a wide spread. We have asked the vendors estate agent for an indication of what price would be acceptable to see if we can get there however he is insisting on a formal offer via a signed contract - is that the way it is done ? Is there no verbal discussion to start things off ?
Thank you
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Old Apr 1st 2014, 8:42 pm
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Default Re: Buying a house in NZ

Seems a lot of money to invest without seeing the property if I'm reading this correctly. I'd hold out until here to view firstly. I may well be wrong though.
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Old Apr 1st 2014, 10:09 pm
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Default Re: Buying a house in NZ

yes its a ridiculous system where you put in a formal offer on a contract then it goes to the seller who can either say Yes or No. if they say No they will strike through your offer and possibly some conditions and put their own in. it then comes back to you for you to look at, if you like it you say yes, if not you say no and strike through their stuff and put your own etc etc etc, at the end of it it can look a complete mess. (why they can't do the bartering first and the agreement last is beyond me)
We've just sold our house and the Solicitor had to ask us what the actual figure agreed on was as it was quite difficult to make out. Once all agreed you go Conditional.
You then have 10. sometimes 15 days to get all your due diligence done. LIMs can take upto 10 days to come through and if you have not pulled out for a reasonable reason you then go Unconditional which means you are legally in contract to buy it and if you fail after this time you have to pay compensation to the seller.

As already stated please don't buy anything you haven't personally looked at it's a fool errand especially at the price.
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Old Apr 1st 2014, 10:27 pm
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Default Re: Buying a house in NZ

I was told always make an offer subject to finance being available, as it's a nice get out clause, they can't really dispute.
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Old Apr 1st 2014, 10:30 pm
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Default Re: Buying a house in NZ

Originally Posted by simonmarkellis View Post
I was told always make an offer subject to finance being available, as it's a nice get out clause, they can't really dispute.
Yes I think most people put that in but to be honest its a bit lame and if you haven't already sorted the finance then don't bother making an offer until you have. I personally would not go into a negotiation without having a formal offer of finance in place.
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Old Apr 1st 2014, 10:34 pm
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Default Re: Buying a house in NZ

Originally Posted by MrsFychan View Post
Yes I think most people put that in but to be honest its a bit lame and if you haven't already sorted the finance then don't bother making an offer until you have. I personally would not go into a negotiation without having a formal offer of finance in place.
Agree, neither would I, but it's nice to have a get out of jail card if you just want to change your mind.
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Old Apr 1st 2014, 11:01 pm
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Default Re: Buying a house in NZ

Originally Posted by MrsFychan View Post
Yes I think most people put that in but to be honest its a bit lame and if you haven't already sorted the finance then don't bother making an offer until you have. I personally would not go into a negotiation without having a formal offer of finance in place.
Unfortunately, when you need a mortgage - banks aren't lending unless they see a sales and purchase agreement now.

Westpac I know want to see these agreements, as do Sovereign.
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Old Apr 1st 2014, 11:40 pm
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Default Re: Buying a house in NZ

Originally Posted by jules999 View Post
We are moving back to NZ in the summer and have seen ( at last ) a property that we really like. The CV is 750,000 valuation 900,000 and asking price 985,000 so quite a wide spread. We have asked the vendors estate agent for an indication of what price would be acceptable to see if we can get there however he is insisting on a formal offer via a signed contract - is that the way it is done ? Is there no verbal discussion to start things off ?
Thank you
Keep in mind that the CV is the Council Valuation which the annual rates are based on. If the house has been renovated or improved the CV may not reflect the added value. In Auckland one would expect to pay well over the CV.
A valuation is more accurate as a valuer has gone to the property and is independent and qualified to do so. The price asked for will be higher than the Valuation because it leaves room for negotiation.
To get an accurate indication of the value of the property - ask the Agent for a list of all properties in the immediate area (with same land size) that have sold in the past 6 months. Good luck
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Old Apr 1st 2014, 11:54 pm
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Default Re: Buying a house in NZ

Originally Posted by simonmarkellis View Post
Agree, neither would I, but it's nice to have a get out of jail card if you just want to change your mind.
Technically, it's not. You need "all due diligence" for that. Bottom line, take any contract to a solicitor first before signing - get them to make sure what you sign to is what you want, unless you are reasonably experienced with the language of the agreement.

To the OP: you're thinking of buying a house for >$900,000 without having seen it? Why don't you just burn your cash instead? Seriously, wait till you get here and have had at least a little look about - a 'dream' house on paper is unlikely to be so dreamy in reality and anyway, there will be another. If you make a formal offer, you will be legally bound to it if the vendor puts their signature on the paper.
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Old Apr 2nd 2014, 1:07 am
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Default Re: Buying a house in NZ

Originally Posted by Tom1983 View Post
Unfortunately, when you need a mortgage - banks aren't lending unless they see a sales and purchase agreement now.

Westpac I know want to see these agreements, as do Sovereign.

perhaps we were just lucky or perhaps as we are already on the property ladder and/or are putting 20% deposit down we had a few approvals from various banks including Westpac before we went looking.

Its a mind field however you go about it and not something I want to repeat to often
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Old Apr 2nd 2014, 1:31 am
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Default Re: Buying a house in NZ

Originally Posted by MrsFychan View Post
perhaps we were just lucky or perhaps as we are already on the property ladder and/or are putting 20% deposit down we had a few approvals from various banks including Westpac before we went looking.

Its a mind field however you go about it and not something I want to repeat to often
Did you get your place before the daft 20% came in?? That might have been the reason? I certainly was surprised to see a request for a S&P agreement when we took interest on a place
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Old Apr 2nd 2014, 5:45 am
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Default Re: Buying a house in NZ

no only went unconditional on the sale and purchase yesterday, still need to pay deposit and actually move
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Old Apr 2nd 2014, 8:58 am
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Default Re: Buying a house in NZ

Offer, pay the deposit then the negotiations start.

BTW deposit is unrefundable.
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Old Apr 2nd 2014, 10:56 am
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Default Re: Buying a house in NZ

Certainly it is not a game for the uninitiated and you need to know what you're getting into when making offers as you are making a legal commitment to buy (subject to your own conditions of course); at the end of the day buyers will only 'negotiate' with the person that makes the best offer and that's not necessarily the best in terms of dollars, so if someone is offering and has no conditions with regards to finance and building reports than you'll not get a look in.

Hence realtor always try to hammer you down with some emotional blackmail and pressure around the conditions in your offer and will do their utmost to shorten down the conditional period; thereby reducing the time you have to get your ducks in a row with regards finance, organising reports and legal stuff. As soon as you submit an offer the meter starts running and you need to be ready for that, know where the money is coming from, have lawyer lined up and what surveyors you will use for building reports.

We had a few scary moments when we first started treading into the realtors den and after we made our first offer and presented it to a solicitor he was horrified that we had done it without first consulting with someone. Especially with regards to the amount and timing of deposit payment that we were told was required by the agent.

I don't care how great the house looks online; I would never consider buying a house here sight unseen, with so many damp / dodgy / leaking piles of shite; with $1m price tag to boot. Actually it's total bloody madness to even think about it; if you can afford $1m for a house you can afford a couple of grand to come and at least have a look at it for yourself.
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