richsadams
16th September 2004, 04:15 AM
Hi All :cool
Thought I'd write a little about buying a house in NZ as compared to the U.S.
The upside is that it is soooooo much easier! :clap We bought ours about a month ago now and the process was almost painless. Once everyone's happy with a price everything's handled by solicitors (lawyers). You have one and the vendor (seller) has one. There are no escrow companies, no title companies and no one else with their hand out for money. The total cost for everything was about US$600. That's it, signed, sealed and delivered! :yes
If you're in a hurry you could actually close in about 48 hours. What a great place!
It is suggested that you get a proper inspection of course (about US$200). The inspection company will also check property issues with the local council and find out if they're planning on turning your street into a freeway or building an airport next door one day.
Most homes are sold at auction (see Karl's posting) but ours had an actual price on it.
The downside (and there always is one isn't there :no ) is it's harder to go about finding a house to buy. In the U.S. you would generally hook up with a local real estate agent who would take you around to see various prospective homes listed by just about anyone. When you buy a house your agent shares the commission with the listing agent. In NZ the real estate agents only represent the vendors (sellers) as they only receive commissions on homes they sell...they don't share commissions. They only sell homes that their particular company have listed and they also work fairly small territories. So if an agent showed you a home they have listed and there was one across the street listed by another company, they would have no interest in showing it to you. You have to call the agent listing each particular home. Agents generally only know the details of their particular area and can't tell you much about an area across town, etc.
And many (most) homes are listed for auction so you have no idea how much they are really worth. It's a good deal for the vendor (and the R.E. company) but not so good for the buyer. An agent will usually give you an estimate of how much a house will sell for, but it's often inflated. You can make an offer prior to the auction, but it's hard to say if the price is right since as a "newbie" you really don't know the area.
You can hire a "valuation company" that will give you an appraisal on a home but we've come to find out that instead of doing proper comps, etc., they often ring up the local real estate companies to find out how much other houses in the area are selling for. Not the best way for you to make an offer.
Ultimately we spent many weekends, mostly Sundays, visiting open homes. And even that was strange as the agents hold an open home for 45 minutes to an hour. Then they rush off to work another open home. Some agents may work six or more open homes in one day. You really have to plan your day accordingly because of the small window of time to actually see a particular house. They'll show it to you another time, but if you want to see several homes in a day (and we recommend that you see a LOT of houses before you buy) you have to run from open house to open house. After a few weeks you'll get to know the area you want to be in, and then you can settle on where you want to live.
We rented for three months before buying and I'd recommend that to most people unless you really know exactly where you want to live. It gives you time to look around, talk to the locals and get a feel for things.
Prices have topped out for now and are levelling off. The interest rates just went up again (around 8.5% now) and will likely go up again before year’s end. There's talk that the market will slide but most estimates are for prices to remain flat for a year to 18 months, perhaps a small drop of 5% or so. :hopeso
Foreigners can buy homes here with no strings unless the home is located on the water (ocean, lake, river, etc.) or has access to water. Then you have to get additional approval. More paperwork is also required for large tracts of land.
One more downside is that if you finance your home, the mortgage interest is not tax deductible. :wah However, if you buy income property the mortgage interest is tax deductible. Many Kiwis leverage their personal homes to the hilt and buy at least one other house that they rent out and take the deduction.
On the positive side, there is no capital gains tax! Woo hoo! :nice1
So for most people, buying a simple home to live in is a breeze. One more great reason to live in New Zealand!
Thought I'd write a little about buying a house in NZ as compared to the U.S.
The upside is that it is soooooo much easier! :clap We bought ours about a month ago now and the process was almost painless. Once everyone's happy with a price everything's handled by solicitors (lawyers). You have one and the vendor (seller) has one. There are no escrow companies, no title companies and no one else with their hand out for money. The total cost for everything was about US$600. That's it, signed, sealed and delivered! :yes
If you're in a hurry you could actually close in about 48 hours. What a great place!
It is suggested that you get a proper inspection of course (about US$200). The inspection company will also check property issues with the local council and find out if they're planning on turning your street into a freeway or building an airport next door one day.
Most homes are sold at auction (see Karl's posting) but ours had an actual price on it.
The downside (and there always is one isn't there :no ) is it's harder to go about finding a house to buy. In the U.S. you would generally hook up with a local real estate agent who would take you around to see various prospective homes listed by just about anyone. When you buy a house your agent shares the commission with the listing agent. In NZ the real estate agents only represent the vendors (sellers) as they only receive commissions on homes they sell...they don't share commissions. They only sell homes that their particular company have listed and they also work fairly small territories. So if an agent showed you a home they have listed and there was one across the street listed by another company, they would have no interest in showing it to you. You have to call the agent listing each particular home. Agents generally only know the details of their particular area and can't tell you much about an area across town, etc.
And many (most) homes are listed for auction so you have no idea how much they are really worth. It's a good deal for the vendor (and the R.E. company) but not so good for the buyer. An agent will usually give you an estimate of how much a house will sell for, but it's often inflated. You can make an offer prior to the auction, but it's hard to say if the price is right since as a "newbie" you really don't know the area.
You can hire a "valuation company" that will give you an appraisal on a home but we've come to find out that instead of doing proper comps, etc., they often ring up the local real estate companies to find out how much other houses in the area are selling for. Not the best way for you to make an offer.
Ultimately we spent many weekends, mostly Sundays, visiting open homes. And even that was strange as the agents hold an open home for 45 minutes to an hour. Then they rush off to work another open home. Some agents may work six or more open homes in one day. You really have to plan your day accordingly because of the small window of time to actually see a particular house. They'll show it to you another time, but if you want to see several homes in a day (and we recommend that you see a LOT of houses before you buy) you have to run from open house to open house. After a few weeks you'll get to know the area you want to be in, and then you can settle on where you want to live.
We rented for three months before buying and I'd recommend that to most people unless you really know exactly where you want to live. It gives you time to look around, talk to the locals and get a feel for things.
Prices have topped out for now and are levelling off. The interest rates just went up again (around 8.5% now) and will likely go up again before year’s end. There's talk that the market will slide but most estimates are for prices to remain flat for a year to 18 months, perhaps a small drop of 5% or so. :hopeso
Foreigners can buy homes here with no strings unless the home is located on the water (ocean, lake, river, etc.) or has access to water. Then you have to get additional approval. More paperwork is also required for large tracts of land.
One more downside is that if you finance your home, the mortgage interest is not tax deductible. :wah However, if you buy income property the mortgage interest is tax deductible. Many Kiwis leverage their personal homes to the hilt and buy at least one other house that they rent out and take the deduction.
On the positive side, there is no capital gains tax! Woo hoo! :nice1
So for most people, buying a simple home to live in is a breeze. One more great reason to live in New Zealand!