Property Buying & Selling Guide
- Want to sell your house?
- Methods of sale
- Setting a realistic market price
- Tips for preparing your home for sale
- Open Homes
- Making the most of your sella listing
- The sale & purchase process
- Finding the right house
- Sales methods
- Using your solicitor
- Specialist inspections and reports
- The sale & purchase process
- Glossary of real estate terms
Want to sell your house?
Private or Agent?
You can choose to either sell your own property of use the services of a professional Real Estate Agent. The benefits of using an agent include:
- Knowledge of property sales in your area, and access to additional marketing options and exposure is eyes of buying public.
- Less stress, workload and potential for legal issues.
If you choose to sell your own on your own you can save the commission fee (normally around 4%). If you choose to sell your own property then you can place an advert for a property on sella.co.nz for free.
Selecting your agent
It is important that you choose an agent that you feel comfortable working with. In addition to spending a lot of time with this person they will also be representing you in the sale of your very important asset. Talk to friends, family and workmates before making this decision. You can also at this time choose between an Exclusive Agency Agreement or General Marketing. General Marketing means using several agencies at once, and can add exposure to your property. However many agencies will not commit as much time and effort to general listings as they will exclusive arrangements.
Get a lawyer
You will need to involve a lawyer as early as possible in the process of selling your property. They will be responsible for all conveyancing work, in addition to advising you on legal issues, dealing with the buyer's lawyer, managing the settlement process, assisting you with details of your mortgage and communicating with local authorities.
Methods of sale
Different selling methods exist for selling your property. The main options include:
A process of selling, calling for purchasers to make their best offers in writing for that property by a given date. Buyer's offers are collected confidentially and the seller chooses which offer is the most favourable. A price is not advertised, allowing the "market" to decide the value of the home. With an Open Tender buyers make offers in writing, there is no particular deadline and the property can sell anytime. With closed tenders buyers make offers in writing and bids must be in before a defined date.
A public sale of a property or real estate that is sold to the highest bidder when the owner's reserve is reached. Sellers have the ability to set a reserve price and a suitable settlement date prior to the auction. The auctioneer is not permitted to sell the property below the reserve price without authorisation.
Fixed Price/ Negotiation
Marketing of your property for a stated price, or inviting offers that parties will then negotiate on in the hope of establishing a concluded contract between the parties.
If you are using a real estate agent then you should talk to them to determine the best method for you.
Setting a realistic marketing price
To attract interest from the maximum amount of potential buyers you need to set a realistic marketing price. Talk to your real estate agent as they may offer a 'free appraisal' and you can also access previous sale information from the Real Estate Institute (REINZ) database.
Other options for researching a good price include:
- Using your Government Valuation / GV. Properties often sell for more than their GV but it can act as a starter. GV's do not take into account the value of any chattels onsite.
- Get a registered Valuation - These can cost between $350 and $500 but can come in useful with negotiating with potential buyers.
- Research other properties in your area and visit some open homes to look at what other properties are being marketing for.
Tips for preparing your home for sale
It is very important to showcase your property in its best condition to any potential buyers. If you can not complete the work yourself it may be worth investing in a professional cleaner to help in this process. You may also want to consider some small cosmetic improvements if they have the potential to improve the value and likelihood of selling your property. Some hints and tips include:
- Tidy the garden, letterbox, front fence and entrance. This is the first thing potential buyers see.
- Finish small repairs (peeling paint, cracked windows).
- Repair dripping taps.
- Tidy rooms and cupboards to remove clutter.
- Clean the windows inside and out.
- Remove extra furniture so that rooms look more spacious.
- Clean your kitchen and bathroom thoroughly as this is often an area many buyers will focus on.
- Ensure you have all the knobs for your appliances and that they work.
- Make sure the doors are not sticky or jammed.
- Replace any light bulbs that don't work.
On the day of an open home there are some small things you can do to showcase your property:
- Lock away valuables or take them with you.
- Remove pets where possible.
- Display fresh flowers or add inviting smells from freshly brewed coffee or muffins.
- Put fresh towels in the bathroom and on the made-up beds.
- Clean the showers and bath and toilet.
- Heat the house to a nice temperature.
- Mow the lawns.
- Put the rubbish out (all of it).
Making the most of your sella Listing
When you are selling your property you will be competing with a lot of other choices for potential buyers. Your advert is the first chance to build interest and your key selling points need to be the highlights of any listing. Remember that these need to make your property stand out. For example:
- Add day sun on your private pool.
- Impressive Rentals.
- Fully renovated and ready to go.
Your property title should include both the location and the main selling point for your property, and in your description you need to include a full description of the features of your home. Don't spare the photos either. The more you can provide the greater chance you have of attracting interest from buyers. Make sure your listing includes information about how you will be accepting offers as this will help potential buyers. Including a price will also aid those buyers searching in a particular price range.
The Sale & Purchase process
The Sale and Purchase Agreement
The Sale and Purchase agreement outlines the buyers offer and all key information relating to this. Any conditions of sale will be detailed and you may need to discuss these with your lawyer for further clarification.
Types of offers
When entering into a Sale & Purchase Agreement a buyer choose to make a Conditional or Unconditional Offer. Unconditional offers indicate an outright offer to buy a property. If accepted by you as the seller, they are legally obliged to go through with the sale. A Conditional Offer is also a binding contract but the seller can include conditions that if not met, allow them to back out of the contract. These conditions may include a title search, finance clause, LIM report or builders report.
You may choose to accept an offer from a buyer straight away or you may wish to negotiate on price or other conditions of sale. This will generally be through the real estate agent or lawyer. If you can not reach an agreement remember to withdraw from the negotiation process.
All buyers have right to make a final inspection of the property prior to settlement to ensure it is in the same condition as when they first placed an offer for it. This can be arranged through the real estate agent.
Finding the right house
Finding your perfect house can be an exciting and challenging experience. We all have our dream home but we need to also think about what it realistic, and affordable. Some things to think about include:
- Confirm your finances. You should talk to your bank, plus a mortgage broker or financier to take into account what you can afford. Remember to think about extra expenses needed to cover moving, insurance etc. A great mortgage calculator can be used for free of sorted.org.nz.
- Research locations and prices – You should use the internet, real estate publications and talk to some agents to investigate prices and housing styles in different locations. Take into account transport, schools, parks, shopping, and family lifestyle. Be flexible with the areas you choose to look in.
- Your ideal home - Think about the size of house you need now and also in the future. Consider the number of bedrooms, number of bathrooms, car parking and room for pets. You will also need to think about whether view is important and how private you wish for your property to be. Upkeep of the garden and/or house almost needs to be factor in your decision.
Things to think about when you view a property include:
- Storage space.
- Water pressure.
- Floor piles and structural defects.
- Which fixtures will remain post purchase.
- Noise around the property and any standing agreements with neighbours.
- Potential for leaks and dampness.
- Heating options.
- Electrical wiring.
- Overall security of property, including any alarm systems.
- Why are the owners selling?
- How long has the property been on the market?
Whilst it is not mandatory you should register your interest with the real estate agent in advance, and have arranged your finance prior to the auction. If you are the successful bidder, the contract will be unconditional, and therefore you will need to ensure you have the finance available to pay a deposit (normally 10%) on auction day. The auction process involves the seller setting a reserve price, which only the auctioneer knows this. If the highest bid is over the reserve, the property will be sold. If the reserve is not reached, the home is 'passed in'. It may still sell by negotiation straight after the auction, and if you are highest bidder, you have first chance to negotiate. Talk to any local real estate agent if you need to find out more about the auction process.
When you purchase privately you deal directly with the seller and/or their lawyer. You should involve your own lawyer at every step of the proceedings, and, if you do end up agreeing to purchase the property, pay any deposits to your lawyer only.
Buying by Tender
Buying by tender involves making a written bid for the property. The seller looks at all the offers and may accept the highest bid or negotiate with the person whose offer they like the best, so it is important to submit your best offer. You may be asked to include a deposit when you put your offer forward. This deposit is refundable if your bid is not successful. If you offer is accepted you then have a set amount of time to meet all sale conditions, however you are at all times committed to purchasing the property.
Using your solicitor
When you make an offer on a property, make sure a copy of the contract is sent to your solicitor. Follow their advice and involve them as early as possible, regardless of whether the sale is private or through an agent. Things you may wish to have your lawyer check include:
- Have there been any recent alterations, and if so, do they have consents and certificates?
- Where are the boundaries?
- Check what type of title the property has: freehold, leasehold, unit title, cross lease.
- With apartments or terraced complexes, check whether the property has a Body Corporate and any associated fees.
- Are there any covenants (restrictions) or easements (rights)?
- Are there any protection orders over the trees or buildings?
- What type of title does the property have?
- Are there any major development plans for the area?
- What is the Rateable Valuation?
Your lawyer will also be able to help you with the sale and purchase agreement, dealing with the seller's lawyers, managing the possession and settlement process, establishing your mortgage and sending notification to local authorities.
Specialist Inspections and Reports
If you are serious about a property but unsure of structural issues, arrange for a building inspection by a building inspector or qualified tradesperson. It will tell you if there are any potential problems or defects, and how much maintenance work you might have to budget for. You can contact the Building Research Association (BRANZ) for more information.
Before purchasing any property you should apply for a LIM (Land Information Memorandum) from your local council. To do this you will need to provide a copy of the title of the property. LIM reports give you the information about the property, such as flooding, consents, drainage, etc.
The Sale & Purchase process
The Sale and Purchase Agreement
If you decide to make an offer for a property you will enter into a sale and purchase agreement. This agreement will outline your offer, the date of settlement, and any conditions that must be met before the sale goes ahead. In all cases you should discuss the terms and conditions outlined in the agreement with your lawyer before you sign it.
Types of offers
When you enter into a Sale & Purchase Agreement you can choose to make a Conditional or Unconditional Offer. Unconditional offers indicate an outright offer to buy a property. If accepted you are legally obliged to go through with the sale. A Conditional Offer is also a binding contract but you can include conditions that if not met, allow you to back out of the contract. These conditions may include a title search, finance clause, LIM report or builders report.
If the vendor does not accept your offer straight away you may end up negotiating with the vendor ( seller ). This will generally be through the real estate agent or lawyer. If you can not reach an agreement remember to always withdraw your offer.
You have right to make a final inspection of the property prior to settlement to ensure it is in the same condition as when you first placed an offer for it. This can be arranged through the real estate agent and seller.
Glossary of Real Estate Terms
You can visit the Real Estate Institute of New Zealand for a full list of real estate terms and their meanings.
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