To buy or not to buy? That is the question. And the answer, as always, is complicated. It depends on your current income, your future job security, your savings, your capacity for risk and your ability to compromise. Many experts predicted a drop in house prices when the COVID-19 crisis first gripped New Zealand, but once again the housing market has defied all predictions.
It can be a frustrating time for first home buyers so here are five things to consider before you go down the rabbit hole and spend every weekend traipsing from one open home to another, hoping and praying that your dream home is just around the corner (and within your budget!).
1. Finance First
Get your finance sorted first to confirm how much you can borrow before you go looking to buy your home. Don’t forget to factor in any available KiwiSaver funds. You should also keep in mind the additional ongoing expenses that you will need to cover when owning a home, such as rates, insurance and maintenance.
2. Get your priorities straight
Make a list of what is essential for you in a home. Think about your needs (consider schools, shopping, transport, medical support, recreational facilities, etc) versus what you would consider to be a bonus. Look at the different house styles in your preferred suburb and try and look past what a house might look like currently, and what it could look like given some tender loving care and a good builder! And remember, there is more than one right home.
3. Special agent
Ask the hard questions of your agent and if you are not convinced by their answer, ask them again and give them the silent treatment until they give you an honest answer. Some people spend more time researching a new mobile phone than buying a new house.
Make a checklist of all the possible things you might need to know before you even consider making an offer. Agents are there to help you find what you're looking for and they don’t want to sell you a house you will be unhappy with. Unhappy customers are bad for business.
The government website, www.settled.govt.nz has some good advice about what questions to ask, including:
- Can I see the property’s information pack and LIM report?
- How long has the property been on the market?
- Does the property need any urgent repairs?
- Are there any ongoing issues?
- Has the property had any work done?
- What else should I know before going further?
- If I'm buying an apartment, what are the body corporate rules?
- What is the body corporate fee and what does it include?
4. Neighbourhood watch
Talk to your potential neighbours who may be able to share information about the property and the surrounding area that the real estate agent doesn’t have. Visit the property at different times to check out the sun and wind at the property, and any surrounding noise or potential problem neighbour issues.
5. Under the hammer
Some first home buyers are intimidated by auctions, but you shouldn’t avoid homes that are for auction simply because you’re unfamiliar with the process. Ask your salesperson to explain the auction system to you and attend a couple of other auctions purely as an observer. If you do go to an auction with the intention of bidding, make sure to agree on your absolute limit before you raise your hand to bid. It can be very easy to get carried away and bid more than you can comfortably afford.
6. Legal eagle
Ask your solicitor what they can find out about a property you are interested in. There may be some unforeseen legal issues with it that have a big impact on your decision to buy or not. And, of course, make sure to consult your solicitor before you sign an offer to ensure all the conditions you require to protect you are included.
