House Buying

• Business » Real Estate
• Business » Services » Financial » Mortgages

House hunting and buying is difficult at any time, regardless of whether or not real estate prices are going through the roof. Buying a house is probably the largest purchase you will ever make, so it pays to think carefully before committing yourself. It's well worth shopping around to get a clear idea of what you like (and what's within your budget). Before stepping foot into a single open home or contacting a real estate agent about buying a house in New Zealand, though, sit down and decide what you're looking for in a home and what to keep an eye out for once you think you've found a gem. Follow our guide to house buying in New Zealand:

What are you looking for in a home?
Knowing what you're looking for will save time and help refine your house buying search. The type of home you want will depend on whether you're a young couple without children, a family with three children or a single person. Also, try to project beyond your current position, five or ten years into the future, and imagine what you will need or want at that time. Compile a checklist of features you'd like in your home:

• Inside the house - consider the essential or important features, such as the number of bedrooms and bathrooms, open plan living areas, central heating and an installed security system
• Outside the house - also remember to include outdoor aspects of the property. You may like to think about whether you want a sunny home, a view, a large lawn area, an established garden or a covered car parking space
• The condition of the house - think about what you want in terms of maintenance and renovation – agents will be keen to tell you that a house has 'potential' but whether you want to be the one to fulfill that potential is another matter altogether. Decide how much you're willing to do in the way of renovations and property maintenance
• Location! - where do you want to live? Think about the style of house and the suburbs in which you want to live, as well as proximity to work, public transport, shops, restaurants and schools. Decide what is important to you and make a wish-list.

Keep track of the properties you've seen
It can be daunting or overwhelming visiting a large number of open homes when buying a house. With those that appeal to you (even slightly), it can be a good idea to keep a record of the home's features, both good and not-so-good. Create a handy table and note down your impressions at the time, remembering things such as:

• Interior features - living areas, dining room, family areas, fireplace, separate toilet, bath, study or office, and heating
• The section - is it sunny, flat, quiet, private, close to shops, parking space, garden, secure?
• Maintenance and repairs needed - check floors, ceiling, doors, windows, under the house, chimney, lights, fireplace, heating, bathroom and laundry

So, you've found a possible match?
Once you've found a place that sparks your interest, it's time to ask some more indepth house buying questions. Bear in mind that agents will err on the positive side, as they are working for the vendor. You might like to ask the agent:

• How long has the house has been on the market?
• Why is the vendor selling?
• What is the house's Rateable Valuation?
• How much are the rates?
• Are there any major redevelopments planned for the area?
• Have there been recent renovations?
• What heating and insulation does it have?

Keep an eye out for:

• Structural problems
• Leaks
• Signs of house movement or sinking piles
• Rotting timber
• Fresh paint and plaster (could be hiding a problem)
• Low water pressure

How will you be paying?
A house will likely be the most expensive purchase you'll ever make. All mortgage lenders have different guides, but generally:

• You can borrow between 80% and 90% of a home's market value
• You can borrow between 50% and 75% of the section's market value, although this will vary depending on the area.

Whatever financial arrangements you make, ensure you can afford to make the home loan payments, with some cash left over for necessary expenses and lifestyle choices. To make sure your finances will stretch, make a budget to calculate how much regular income you have coming into your household, your regular expenses and your expendable income. This will provide a guide as to what you can afford to borrow and what you can save each month to put towards a deposit. Talk to a professional New Zealand mortgage provider.

Know your rights
Choose a lawyer before you locate a home that you're interested in placing an offer on. It is your lawyer's job to protect your rights by reading any contract that you sign, filling out the legal paperwork and explaining the legal process to you in simple terms. They will ensure that the buying and ownership of your home is legal.

Placing an offer
Mostly, homes are sold through a sometimes drawn out process of offer and negotiation. When you think you've found a possible match, you'll need to make an offer in writing, outlining what you want and how much you're willing to pay. This offer is passed to the vendor via the vendor's real estate agent. If you successfully reach an agreement, you will then have a finance date (usually five days after the offer has been accepted) and a settlement date (at which time you will take over ownership of the house). Your offer should involve certain conditions, to give you a chance to check that everything is in order with your finance and with the property itself. At this stage, you may want to get an independent valuation or assessment from a building consultant. The process is slightly different when buying a home at an auction or through tender or private sale.

Sealing the deal
Once both you and the vendor have signed the offer, this Sale and Purchase Agreement becomes binding. You will then be required to pay a deposit to the agent, which is usually in the region of 5-10% of the sale price. The remainder will be paid on the settlement day, when you can claim ownership of your new home.

Looking for more information? Find New Zealand house buying in the NZS.com directory.

Do you want to write for NZS.com, New Zealand's top Web directory? We are looking for New Zealand writers for our unique new article writing program - whereby you can write and submit articles for our website, and you will earn 50% of the revenue from the advertising on your article's page. Check out the Article Authors homepage to apply now!

Family images from Flickr: Baby Boots, Kids Classroom and Hands.