Buying property? Balance caution with speed

Buying property?

BALANCE CAUTION WITH SPEED

The past year has seen almost manic buying of property with many new listings being snapped up within a day or two of coming onto the market.

In line with the property grab, land and house packages are often secured within no time of sections being released to the public and building companies.

With the pressure on to make quick decisions, it’s easy to overlook or forego those necessary checks ahead of signing on the dotted line. In particular, faced with a multi-offer situations, the scurry to present an unconditional deal can often override the good sense of completing checks to ensure the property in question is sound, meets your needs and is not over-priced.

In order to act quickly, yet still proceed with caution by completing due diligence, heed the following advice:

Talk to real estate companies and choose an agent with whom you feel comfortable to work with. Outline your budget and what you are looking for so they can let you when a property comes on the market.

Sort out a good building inspector in advance – you may need his/her services quickly.

Talk to your bank or mortgage broker before beginning your search and have pre-approved finance in place if possible. However, even with this in place banks often need to approve a property before final confirmation of finance. If you are working with a broker, or bank manager, this approval can often be completed very quickly.

When you find a property you like ask the agent for a LIM report but don’t rely on a vendor obtained report, It’s generally better to source your own from council although that will come with a cost.

If you plan to access your Kiwisaver to help with the deposit on a property, speak to your lawyer before signing any agreements. There are strict timelines with using Kiwisaver money, which don’t always match with your need for speed! It pays to talk to a lawyer about how an offer can be structured to give you the time you need to draw down Kiwisaver funds yet also give the vendor certainty that the deal will proceed.

If seeking a new build, visit show homes and building company websites. Talk to company sales reps about price structures, build quality and materials, extras you may need to pay for, and what the ‘package’ covers such as landscaping, paths and letterboxes. Ask about build times and if the section title has been issued. Importantly, take any agreement to your lawyer first.

When looking at properties be sure to consider your work and lifestyle needs. For example, it may be tempting to buy a few acres but if you have a busy job in the city and then need to travel extra each day, ask yourself if the property will work for you.

Also, be aware that extra land not only means extra work, it means extra knowledge about keeping that land well maintained. This isn’t always straight forward for those who have little knowledge of rural living.

Of course, in mid 2021, mortgage interest rates were at an all time low in New Zealand which has helped ease house hunters into new properties but it’s important to calculate what extra you can afford to pay should rates increase.

Planning before you look will help avoid unwise decisions when the time comes to buy.