The Home Buying Process
Build a Team
Before you start your home buying journey, build up a support team. As well as having a trusted mortgage advisor (you’re welcome), at the very minimum, you will also need a solicitor or conveyancer to help you complete the purchase of a property.
What is the difference between a conveyancer and a solicitor – a conveyancer can make the home buying process smoother by supporting you through the offer stage and ensuring that your new home doesn’t come with any hidden problems. They can also guide you through all the paperwork required to complete the purchase and put the house in your name. A solicitor can perform all the duties of a conveyancer and can help you navigate the trickier transfers of property ownership. They are also legally qualified to practice law. If you’ve never engaged legal services before, it’s likely that your real estate agent or we, as your mortgage advisors, could refer you to someone.
In various other scenarios you may also need to engage builders, valuers and property inspectors, dependent on the property and/or any specific property requirements from the bank. Again, these services may be required as part of a condition from the bank before they approve final lending.
The Property
It is really important that you do your homework on any properties of interest, and research them thoroughly so you can make informed decisions before making any offers or attending an auction. Your mortgage advisor can assist you with some background checks on the property via a market valuation report and you may also need to investigate getting a building inspection and/or a weather tightness report completed as a requirement for the bank or for your own peace of mind (see the Buyer Checklist at the end). Again, you may be able to get a referral for these services through your real estate agent or mortgage advisor.
The Offer
Before you make an offer on any property, it’s important that you fully understand the method of sale e.g. price by negotiation, auction, tender, fixed price. In any case, it’s important to confirm your finance in advance of making an offer and have an approval for lending in place before you get serious about a property. Part of our role as mortgage advisors is to educate you on the process of making an offer on a property via the various methods of sale noted above, and to make sure you are fully informed in terms of the financial obligations of entering into a sale and purchase agreement in line with your approved lending.
If you’re making an offer on a property by negotiation, it’s important that you stipulate any conditions that will need to be met prior to going unconditional including finance, LIM (Land Information Memorandum) report and any other due diligence to satisfy the bank’s requirements and any of your own questions you may have. Your real estate agent will assist you here with the conditions for the Sale and Purchase agreement.
If you are planning on bidding for a property at auction, you must understand that auctions are final and that any accepted offer will require you to be unconditional on your finance.
Settlement
Once you have an accepted unconditional offer in place, you must plan your settlement day. Make a time with your real estate agent to complete a pre-settlement inspection of your new property and make sure your finances and insurance are all in order before you pick up the keys and move in.
Post Settlement
Now that you own your own home (congratulations!), our role as mortgage advisors doesn’t stop there. We will book in a post-settlement review of your lending and then schedule annual catch ups to run through your home loan with a view to making some plans for your next credit event e.g. fixed rate review, or we are available to you for any of your other lending requirements related to your property. Buying a house can be a 30 year commitment, so it’s important that you are receiving the right level of advice needed to help you manage your mortgage and financial position.
Your Team
As far as assembling your team goes, don’t hesitate to get in touch with us as your financial advisors for recommendations or referrals for any of the above services, and make sure you check in with your own networks for people that you may already know who can assist you to help keep your costs down.
We are here to help and are only a phone call, txt, email, DM or thread (?!) away.
Buyer Checklist
For your own peace of mind or if you want to complete a thorough check of the property before you buy, here is a checklist, which is not exhaustive, but can include:
- LIM (Land Information Memorandum) – It’s a summary of the property information and includes things like the rates, water and drainage, any consents and special land features.
- Property Report – This is the history and record of your property based on what the Council have been notified of. E.g. what renovations have been done on your property and have they been consented with Council?
- Building Report – A Property Surveyor will give you a detailed property report post inspection which may reveal hidden issues. They will check things like the house’s foundations, windows, roof and look for any dodgy building work and signs of damage or decay e.g. rot.
- Weather Tightness - This is especially important for any property built in the 1990s and early 2000s also known as the leaky homes era.
- Developments – Check for any planned developments in the area that may affect your potential property. These can be planned by Council or by private developers.
- Flood Plains – Is the property or part of it in a flood plain?
- Zoning – What restrictions are in place for the property’s zone, what might your neighbours be able to do in the future e.g. build 3 stories high etc.
- Heritage – Is this home a heritage house? What restrictions and responsibilities might you have?
- School Zone – Which schools is this house in zone for?
- Plumbing and Drainage – What is the water pressure like? Where does the stormwater go to?
- Protected Trees – Native trees are protected in NZ and you are often required to get permission to trim or remove these from your potential property.
Disclaimer – the above list is not absolutely necessary before buying a property but it makes good sense to check some of them off. There can be a cost and time delay associated with checking some of these items out and so this is not always a viable option for everyone. Also with older houses, there is already an expectation for there to be some wear and tear and maintenance requirements that will come with the house.