Buying a home, particularly if it is your first home, can be quite stressful – but it needn’t be if you begin the process with a clear mind-set and follow some basic, but proven guidelines. In this article Tommy’s will endeavour to cover some of the important issues we believe potential home buyers should consider. Most agents you encounter during the buying process will first and foremost be representing the vendor or home seller, which is where their main legal and moral obligation lies. However, an agent also has a duty of care towards any potential home purchaser; they have an obligation to apprise them of any matters, good or bad, pertaining to a particular property that may influence the potential purchasers’ buying decision.

The Real Estate Authority (REA) also provide some independent and comprehensive guidance on their website, useful information on their website, settled.govt.nz, covering various aspects of locating, financing and concluding a successful housing transaction. We urge buyers to peruse this website, talk to a real estate agent and take advice from other professionals such as a solicitor, a mortgage broker or banker and an insurance broker. In other words, build a support crew. This may sound like an information overload but there is no substitute for knowledge when taking your first step into property ownership. Being equipped with some basic market knowledge during negotiations is an important stress minimiser and is a sound base for achieving a successful outcome.

Finding a property of interest:
Most potential home buyers initially prefer the anonymity of visiting open homes when searching for a property to buy. You will be expected to sign a visitor’s register as a security measure, and this will also establish a contact with the agent running the open home. A good agent will call or email later to gauge your interest in the property and to assess whether they have other properties for sale that may be of interest to you. Visiting open homes also gives a buyer an insight into what represents value for money and it is surprising how quickly you will assimilate your perception of values in a particular area. Having an appreciation of current values is of the utmost importance when you decide to offer on a property.

Real estate agents today usually have a comprehensive display of properties they have for sale on their personal or company website. Check the websites of the leading agents and companies operating in your area of interest, and this will keep you abreast of new properties as they come to the market. There is of course also the print media to view as a means of seeing what is new to the market. Registering your requirements with one or two active agents should also put you at the head of the viewing queue for new listings.

Researching a property:
So you have found a property that is of interest! If time permits you can have the property inspected by a reputable builder or home inspection company, have your solicitor search the title, enquire about finance and if available, it is always a good idea to peruse a Land Information Memorandum pertaining to the property. Often however, you will be in a competitive situation with other potential buyers and you may not have time to research these matters or in fact to do any form of ‘due diligence’ on the property. If this is the situation, make any of these matters that are important to you conditions of any offer you make.

Making an offer:
Particularly in a competitive situation, it is important to make the best and cleanest offer you possibly can. By this we mean an offer that has a minimal number of conditions or better still, no conditions as such offers will always take precedence over an offer that is heavily conditional. This presupposes that the price being offered is in the same ball park, of course. Having said that, Tommy’s do not suggest that a buyer makes an unconditional offer at the expense of protecting their position with regard to items such as finance, insurance, specialist reports, LIM reports or title searches to name the obvious areas of potential difficulty. If your agent informs you that you are in a ‘multi-offer’ situation competing with other buyers, enquire how this process will work and have a clear understanding of the process before taking part in it. It is also sound practice to let your solicitor peruse the Sale and Purchase Agreement before your agent places it in front of the home seller.

Settlement:
You have satisfied any conditions in your offer, arranged finance and insurance, instructed your solicitor to declare the contract unconditional and then paid the prescribed deposit to the selling agent. At this stage, and before moving in, you are entitled to carry out a pre-settlement inspection. This is not an opportunity to re-negotiate the sale price for any reason, but simply to ensure the property is being left in the same condition it was in when negotiations took place and that all chattels passing with the sale remain on the property. On settlement date, plan your removal arrangements around the time when keys will be available and the home sellers and their furniture have departed.

This is a very brief overview of some of the important considerations when buying. For further detailed information, we invite you to contact your Tommy’s agent for advice that is free and without obligation.

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