Category Archives: Buying
As your single largest investment, you’ll probably spend a great deal of time searching for or designing your perfect home. When house hunting, you’ll consider things like location, price, market trends, costs and the condition of the property. And you’ll probably have a list of things you absolutely have to have and those you’re prepared to forgo. Deciding whether to buy an existing home or build a new home is an important part of your decision. To help you make an informed choice, we’re taking a closer look at each option.
Buying An Existing Home
The primary advantages to buying an existing home are convenience and cost. Once you have pre-approval, you’re able to shop around, pick out the home you like and then make an offer. Working closely with your mortgage adviser and your real estate agent, you’ll already know how much you have to spend, and have a list of properties that fit your requirements.
Despite a number of steps involved – arranging finance, attending open homes and auctions, getting inspections done – once your offer is accepted, you’ll be able to move in within a month or two, all going well. Buying an existing home is ideal for those buyers on a tight schedule – relocating for a new job or whose children are starting school in the area
The Cost Factor
In many cases buying an existing home may be more cost effective, particularly if you’re looking to move into an established neighbourhood near your work, school, friends or family. You may find it hard to find available land in these areas, so buying an existing home will be your only option. It also means that your garden will already be established so you won’t need to worry about starting a lawn, planting shrubs or waiting for trees to grow.
On the other hand, buying an existing home means you may not get exactly what you want, and you may need to spend money remodelling, repairing or redecorating any outdated features of the home. These additional costs could make the difference in deciding whether to build or buy.
Building A Home
While building a new home is not as convenient as buying an existing home, it does mean you get the home you want. One of the biggest advantages to building a new home is the fact that everything is new. You’re also able to build in features that make your home more energy efficient, like heating, cooling, insulation or air filtration systems that are environmentally friendly, saving you money in the long term.
In fact, your home may quite literally be better for you as it’s less likely to have health concerns or toxic materials you may find in an older home – things like asbestos, lead paint or mould. And it can be built using materials that are better for the environment like Energy Star rated appliances and more efficient plumbing systems.
The Cost Factor
While the cost of building involves a number of upfront costs, it’s easier to recoup your investment long term. A newer home will require less repairs and lower ongoing maintenance, and is likely to fetch a higher resale price when you decide to sell.
The biggest drawback to building your own home is that it’s not immediately available for you to move in, and the costs may be higher. But money and time aside, building your own home can be emotionally satisfying in that you feel you’re achieving a dream and living in the home you created; a home that perfectly matches your style and personality.
Build Or Buy
Whatever you decide, it’s vital you seek professional advice before you commit to any decisions. Determine how much you can spend and obtain a pre-approval from your bank or lender. This will help frame any conversations with builders or sales agents should you buy.
Open for inspections give you a great first impression of a property and you’ll know almost immediately if it’s one you want to pursue. But that first visit can be much more than a “once over lightly” impression. How do you make sure you’re getting as much information from it as possible?
Use the time to perform a thorough first property inspection. Later on, you’ll want to engage professionals to inspect the building’s structure and health, but it’s a good idea to use your initial tour of the home to see some things for yourself.
When inspecting a property, chances are the current owners are going to present the interior of the property in the best possible light. They will have cleaned and tidied, perhaps added a new coat of paint, or even had the home styled with beautiful furniture. Whilst these things will help you to appreciate what the home could look like for you, at this stage, it’s more important to focus on the dwelling’s structure.
- Damage from pests. Recent termite damage in wooden structures is a huge red flag. Have a look for bores through wooden frames, or dirt tubes in the foundation or exterior walls that hint to borer infestation.
- Poor construction. Windows and doors that jar, or cracks in the walls around doors and windows are both signs of poor construction.
- Wet spots on walls or ceilings. Condensation within the home can lead to mould build-up, timber decay, leaks, corrosion and even loss of structural integrity.
- Cracks in the foundation. Some small cracks in a home’s foundation can be harmless, but large cracks either running down the foundation or across could mean a home is shifting, which can cause significant structural damage over time.
If you see anything through this process make a note of it, and make sure to mention it when you have a professional building inspector go through the property.
Location means more than the general neighbourhood. You may be attracted to the area, but take a look at the property’s exact location for things that may bother you over the long-term, hurt re-sale value, or cause lifestyle issues.
Things to consider are:
- Is it on a busy main road? Houses on main roads can attract lower prices than those on quieter, private and less congested roads. You’ll also have to get used to the noise of heavy traffic.
- Is it next to a retail or commercial space. This can create high levels of traffic and additional noise, depending on the type of business and its operating hours. Also be mindful of properties next to land that may be zoned as retail or commercial. Talk to your sales consultant about what zoning around the property means for potential development.
- Is the property near railway lines? A home close to public transport is always convenient, but a home that shares a border with a train line, for example can cause a lot of excess noise, potentially hurt re-sale value, and cause safety issues for young family members depending on fencing around the property.
- Are there power lines over the land/property? Sometimes found on larger parcels of land, power lines have been known to drop property prices.
- Is the property on a flood plain? Depending on the city, the climate and the proximity to dams, lakes and watercourses, the potential of flooding on the property will be different. Be aware that houses within the same street can be impacted differently by flood waters. If you have concerns talk to you sales consultant, property inspector and the local council.
- Take note of the neighbouring properties on each adjoining border for any clues you might not be comfortable long term.
- Are the neighbours’ yards neat and tidy? It might not directly impact on the property you’re considering, but what about when it comes time to sell the property? Would untidy yards next to yours reflect poorly on the area?
- Do they have pets? It might not be an issue, particularly if you have pets of your own. But look for problem pets. Is a neighbour’s dog barking non-stop during the inspection? Are animals loose or roaming? Is there evidence of pet damage to shared fences or common areas?
- Do you have a comfortable level of privacy? Take a look at different angles around the home, particularly on smaller blocks or apartments. Are you too close to neighbours? Can you easily hear them through the walls? Are certain windows placed directly opposite a neighbour’s window? Is the property fenced off from neighbours?
It’s important to remember that none of these things always have to be immediate deal breakers on a property you’re interested in. It’s about arming yourself with as much information as possible so you can make an informed decision and end up with a property you are happy with, for an amount you feel is reasonable.
Once you have made your first visit and if you decide you wish to proceed in making an offer, seek good legal, building and financial advice from the experts.
As the price of property continues to rise, many parents are stepping in to help their children buy their first home. For some first home buyers, without that help, securing a home would be simply impossible. Whether it’s through gifting the deposit, lending them the money, providing a guarantee, or being a joint borrower, there are a number of considerations to take into account. We take a closer look at just what you need to think about when deciding to help your kids buy a home.
Sort your own finances out
Helping your children buy their own home will largely depend on the state of your own finances. There’s no point lending them the money if it’s going to leave you short in your retirement. Talk to a financial adviser before you make any decisions, to determine whether or not you can actually afford to help out.
A work ethic
It’s widely believed that people who haven’t had to work for their deposit are more likely to fall behind in mortgage payments. Consider how your kind-heartedness could impact on your children’s work ethic and responsibility towards repaying their loan. Learning to budget and placing value in the effort required to secure their own home are valuable life lessons.
A breakdown in relationships
Consult with a lawyer to properly document the loan you’re providing. In the case of a relationship split, your child’s partner may be entitled to half of your gift. Consider adding in a clause that says the loan is repayable on demand, or register a caveat over the property if you feel this is appropriate. That way your loan can be called up if your child separates. By carefully documenting all transactions, you’ll help avoid family disputes at a later stage.
Can they afford it?
If you are helping out with a gift or a loan of the deposit towards a new home, check that your kids can actually afford the mortgage repayments. While the property you help buy could be rented out or sold at a later stage if repayments become difficult, not every parent wants to be a landlord and the property market may shift leaving you with a property you’re unable to sell.
Before making any decisions, it’s important you carefully weigh up where your children are headed in their professional and personal life. How secure is their job and how do their future prospects look? Are they living beyond their means already, and will they have enough to cover the repayments each month? Are they likely to move in the next year or two, which may not be enough time for the property’s value to grow in order to recover purchase costs?
Are their expectations too high?
If you are providing the deposit to help your kids purchase their first home, they would still be responsible for all of the mortgage repayments. That may mean they’ll need to lower their expectations; that four-bedroom villa in a top suburb is out of reach, and a more modest two-bedroom home is an adequate first step on the property ladder.
How you can help
Helping your children buy their own home can be rewarding for both parents and children. But it’s not something that should be done lightly. It’s vital you seek advice around the legal, tax, family and financial side of helping out. If you are considering helping your kids buy their own home, either with a gift, a loan, as guarantor, or by extending your own mortgage, talk to our mortgage advisers first about your options.
Post originally written by Mortgage Express New Zealand – Would you help your kids buy?
In a competitive market one of the questions we most encounter from homeowners is should we buy or sell first?
Harcourts New Zealand CEO, Chris Kennedy shares his thoughts on the matter.
It comes up because in a tightly competitive market homeowners are often worried they’ll miss out on a rare dream home if they wait until they’ve sold their existing property.
On the other hand, some homeowners are scared to list their home for sale without having already bought a new property in case the settlement period comes and goes and they are left essentially homeless and forced to find (and pay for) temporary accommodation.
Unfortunately, there’s no perfect answer to this, but the key variable in what will work best for you is how much finance you have at your disposal.
In a market where supply and demand are reasonably balanced, selling your existing home before you buy tends to make the most sense. It means you know exactly how much you have to spend when it comes to shopping around for your new home.
If you have your home completely sale-ready when you list, you can spend the time scheduled for your open homes, visiting other properties for sale. It’s also a good idea to do some looking around before your own property is listed, so you have a clear idea of what you want – or don’t want, where you want to be, and how much you’re prepared to pay.
Have your finances in order as much as possible based on the asking price of your own property so when you’ve sold or close to selling you can move quickly on your preferred new home. Remember too that if you make an offer on a new property that is accepted while your existing home is still on the market, you can still make your purchase conditional on the sale of your other property.
It all gets a little more complicated when the market is heated, such as it currently is in several regions around New Zealand. Many homeowners feel that buying before they’ve sold is the only way they’re able to compete for hotly contested properties, and it gives them the reassurance they won’t be shut out of the market and left without a roof over their head.
The obvious trap here is the risk of over-stretching yourself financially if you are forced to accept less than you hoped for your existing property and you have no nest-egg to tide you over. It’s worth remembering too that if you’ve already bought, you may be persuaded to take a lower price just to sell quickly.
Bridging finance – a temporary mortgage to pay for the new property until the original property was sold – is available when you can confirm a settlement date for your existing property.
On the upside, you can look at other options such as putting short-term tenants into your unsold property, to help offset the costs while it’s on the market. Though you’ll need to be clear about making sure the property is always tidy for inspections and that your sales consultant has access as required.
You can also talk to the selling agent for the home you want to buy to see what time frames you can work out around settlement dates that give you the maximum reasonable amount of time to sell your existing property. Even at auctions, which typically have a 30-day settlement period, you can sometimes ask if the vendor is happy to extend.
In short, there’s no perfect answer to the question of whether you should buy or sell first. The answer depends very much on your individual circumstances.
The best answer is do as much research and preparation as possible before listing so you’re ready to move quickly if need be. And keep your sales consultant – and that of your dream home’s vendors – appraised of your time frames. That way they can help you make it all fit together.
Moving house with kids can be stressful and upsetting for everyone, but particularly young children, especially if they’ve previously only known one home. But with a little foresight, planning and some good old distraction techniques moving to a new home need not be traumatic.
- Keep the kids as involved as possible in the process of moving house. Before you start looking for a new place talk to them about what they’d like a new place to have, or even draw pictures of what they want their new bedroom to look like.
- Have them research your new neighbourhood and make a list of places they’d like to visit and explore once you’ve moved.
- Once you’ve bought a new house, either take the children for a walk-through so they can see their new bedrooms and play areas like the back garden. Or have them search for the house online and, if possible do a virtual tour.
- If possible make a few visits to the new neighbourhood before moving so the children can see where their new school is, or where the local playgrounds are and take some time to walk around so everyone can get their bearings.
- Give them printouts of the floor plan of their new bedroom so they can start to plan where they want to put their things.
- Have your kids research the new neighbourhood or town themselves and make a list of places they want to visit.
- Let each child pack a box of their favourite toys themselves, then have them write their name on it, and decorate it. And make sure they help load it into the car or moving van so they know it’s going with them to the new house.
- Give each child a special responsibility on moving day and print them out a label with a job title like “head toy packer” making sure everybody’s favourite toys are accounted for, or “chief librarian” to make sure all the favourite books are packed, or “head gardener” responsible for collecting all the pot plants.
- Keep calm! Kids will pick up on your stress and anxiety about moving, so try and focus on making it a fun adventure however and whenever you can. It may even ease your own state of mind!
- Keep a picnic basket readily available and well stocked so you have plenty of snacks and drinks to keep children occupied as well as refuelled.
- Once you arrive in your new house on moving day, unpack and set up the children’s rooms as a priority so they feel at more at home more quickly. Make sure the rooms are welcoming and recognisable as theirs with familiar duvet covers, furniture, toys and books.
- Keep a few large moving boxes for making forts.
- Plan a special celebration “first night” dinner, that easy to prepare and fun – try a pizza and ice cream picnic on the lounge floor.
- Set up a treasure hunt around your new section so the kids become familiar with it.
- After moving day try and return to a normal routine, of normal bed times and meal times, school and play as quickly as possible to help everybody settle.