Trade Places’ page for Buyers tells you what you need to know about safely purchasing property privately, from preparing a budget through to settlement day of your new property
Preparing a budget
When purchasing property, it is important to know how much you can afford to spend. A great way to understand your current financial position is to record your spending – down to the smallest detail, for example a coffee - over a three month period. This will give you a good indication of how realistic your budget may be, as well as areas where you may be able to cut back.
Be honest with your budget allowing for hidden expenses, such as: medical bills, vehicle running costs, groceries, utilities and social outings etc. Ensure that you seek financial advice on how much you can really afford, and remember, purchasing property may be one of the biggest investments you make during your lifetime
Saving a deposit
It is always a good time to start a regular savings plan. Stick to your budget as the more you save now the more you will save on interest later.
Most financial lenders will require a minimum percentage as a deposit. Make sure you shop around for your financial lender as they all differ from fees to interest rates and may have different packages which may suit your personal needs.
Remember to ask as many questions as you need to ensure that you are comfortable with your provider. Trade Places’ Mortgage Broker will do all the donkey work for you by shopping round for the best rates currently available and then presenting options back to you.
This service as at absolutely no cost to the buyer, and can assist with cutting out a lot of stress, time and effort. If you would like Trade Places to arrange for their preferred mortgage broker to contact you to discuss options, please select this option from the Service Centre and our highly professional, top rate, friendly broker will contact you directly.
Property wish list
Before you start looking for property, it is a good idea to compile a list of what features and local infrastructure – compulsory and bonus – you require in a property and its suburb. For example, if you are starting a family, you may require a certain number of bedrooms; off-street car parking and a local school close by, whereas a swimming pool for the children may be a bonus.
Things to consider:
- How many bedrooms does the property have?
- Is it close to public transport, schools, shopping centres etc.
- What are the council rates on the property?
- What type of property are you looking for – a unit, townhouse, apartment, existing house, vacant land, or new home?
Rate the features you need in your life and compare with other properties and suburbs.
When deciding on a property loan it is important to look around to get the most competitive offer. As a property loan is a debt you may have for many years, and often includes exit fees, be sure to thoroughly investigate all your options.
As mentioned above, Trade Places’ hand-picked Mortgage Broker will happily assist you with interest rate options, timeframes, hidden fees and anything else you should be aware of prior to signing up for a mortgage. This service as at absolutely no cost to the buyer, and will help you to avoid stress, time and effort.
If you would like Trade Places to arrange for our preferred mortgage broker to contact you to discuss options, please select this option from the Service Centre and our highly professional, top rate, friendly broker will contact you directly.
Know your costs
You will often hear people complaining of the “hidden costs” associated with buying property. This can be avoided simply by doing your homework.
Some costs you might incur include a professional onsite valuation (if you are unhappy with what the seller is asking or you may be required to get a valuation for mortgage purposes), legal or conveyancing costs, bank mortgage fees, home and contents insurance, moving and utility connection fees, body corporate fees (if any), council rates and any ongoing maintenance.
If you would like advice about potential costs you may incur when purchasing a property, please contact us – the team at Trade Places is more than happy to help any way we can.
At Trade Places we give buyers the ability to take control of their property purchase and negotiate their sale price direct with the seller directly.
When negotiating with sellers be prepared to ask any questions you may have about the property.
Why they are selling?
Ask the seller why they are selling their property.
You may want to know if they are upgrading to a bigger home, or moving cities, or downsizing because their children have moved out.
This information out will help give you peace of mind.
Sellers Asking Price
A seller will usually have determined their sale price prior to listing, this will be based on the valuation they have received through Trade Places’ service providers. However, they may have set their price based on a couple of other factors:
- They may know of other similar properties which have sold in the area.
- Or, they may just want a particular price for a property based on their financial situation, or what they paid for the property.
Ensure you have researched the property and suburb to determine whether the price the seller is asking for is realistic. Alternatively, you may like to ask the seller if you could view the valuation they would have received if they purchased a Trade Places package of tools*
*Please note: sellers may not have necessarily purchased a package, they may have elected to use Trade Places’ pick and mix tools through the Service Centre, therefore they will not necessarily have a valuation.
Deciding on your purchase price
Factors such as the seller’s Property Valuation, research on similar properties and your financial situation will determine how much you are willing to spend on a property. When negotiating with the seller always bear in mind your absolute maximum price so that you do not negotiate above this.
Competition and buyer interest can play a part in negotiating the sale price of the property. Find out from the seller if there are a number of interested buyers, or if they have received any offers.
Prior to negotiating an offer, make a decision on what settlement period you require. A seller may already have an idea of what settlement period they would like, however, it is still appropriate to suggest your preferred length of time. As a general rule, settlement is often 6 – 8 weeks.
Putting in an offer
Once you have decided on your offer for a particular property, you will need to fill out a ‘Sale and Purchase Agreement’. Trade Places provides copies of this paper work to all sellers who purchase a Trade Places package. We advise our sellers to get their solicitor to fill out this paper work so it’s ready to hand out to perspective buyers.
Buyers will need to fill out their offered price and add in any clauses they wish to include (most common clauses are: that the sale is subject to a building inspection, LIM report and finance).
When a price is agreed upon, the buyer then has (usually) 10 working days to ensure the property meets the clauses. Trade Places can provide the most common clause wording for buyers to use in the Sale and Purchase Agreement. Simply click here to view standard clauses.
Trade Places can arrange a top solicitor to contact you – simply click on this option in the Service Centre and one of the Trade Places team will arrange for a solicitor to contact you. And as with everything Trade Places arranges for you, you will receive top service by top providers, but not with a top price tag! We shop around for fantastic proven providers who are competitively priced!
When submitting an offer to a seller you will need to provide your solicitor’s contact details. Solicitors for both the seller and buyer will work together to ensure your ‘contract of sale’ has everything required from a legal perspective.
Don’t rush in
If a seller is asking for a price which is out of your range, don’t panic and put forward an offer which you will not be able to afford. Put in your best offer and if the seller does not accept, inform them that you will come back to them shortly to see whether they have changed their mind. A seller can sometimes reconsider a price once they have had some time to think about it.
Legal requirements (solicitor / conveyancer)
Trade Places can arrange a top solicitor for you, at a great price – simply click on this option in the Service Centre and one of the Trade Places team will arrange everything for you.
You will be required to meet with your solicitor (or arrange for the documentation to be faxed or emailed through to you) to sign the required forms. This is a relatively simple process, not at all as daunting as it may sound. A good solicitor will effortlessly handle all the legal requirements.
As mentioned above, most buyers include certain clauses in the Sale and Purchase Agreement. One of the most common is a ‘builder's report’. A builder's report involves a qualified building professional visiting the home you have the offer on and undertaking a thorough inspection of the structure and condition of the property. They will provide you a written report outlining their findings, especially any areas of concern.
A ‘Land Information Memoranda’ or LIM report is a comprehensive report containing everything the Council knows about a property or section.
LIM information includes:
- Special land features including potential erosion, avulsion, falling debris, slippage and possible hazardous substances.
- Private and public stormwater and sewerage drains.
- Unpaid rates.
- Consents, certificates, notices, orders or requisitions affecting the land or buildings.
- District Plan classifications that relate to the land or buildings.
- Any information relating to the property supplied by network utility operators in relation to the Building Act 2004.
- Other relevant information.
People usually request a LIM report when considering whether or not to invest in residential or commercial property.
It is best for buyers to contact their city council directly to obtain a LIM report on a particular property.
Your appointed solicitor will undertake a Title Search on the property you are purchasing prior to settlement day. This ensures that the all relevant records confirm that the seller is the legal owner of the property.
Further, a title search shows any caveats or covenants on the property you are purchasing.
Many buyers wish to have a title search completed as part of the ’10 day clauses’ so that they know if there is anything on the title of the property which would make it undesirable for them to proceed.
You may want to get the property you are interested in valued. Trade Places can arrange a number of options for you:
- The first being an online valuation of the property which takes into account recent sales in the area and the property’s Rateable Value (RV).
- The second is a more comprehensive report which covers off everything you may like to know about a property from local sales, to school zones to neighbourhood profile.
- The third is a registered valuation carried out by a professional valuer. This is often required by banks for mortgage purposes.
Trade Places will happily arrange any of these reports for you. Simply visit our Service Centre where you will find further information on valuation options, and will be able to purchase your preferred option.
Banks normally require home insurance on a property on which they are providing a mortgage. This is worked out on the size of the house (i.e. you pay more for a larger house as, if the worst were to happen and it burnt to the ground, it would cost more for an insurer to replace than a smaller house).
You will need to arrange for utilities to be connected in your name at your new property (phone, power, internet, etc), and don’t forget to arrange with NZ Post to forward your mail too. They will do this for three months for around $30, so well worth it.
If you are unsure of which power company you should go with, check out: www.powerswitch.org.nz where you can input your property’s details (cooking source, heating source, if you’re there during the day, etc) and it will cleverly tell you which is the best power company for you.
If you want to ensure your new property is spotless for you to move into – or your current house spotless for the people moving into it, then consider hiring professional cleaners. This may save you hours of time and potential stress on settlement day.
Quite often settlement day is a Friday (as the banks need to be open to release mortgages, etc). This is can be problematic for getting friends to help you move. Not to worry! Trade Places will happily arrange for a fantastic moving company to contact you and give you a quote.
All you need to do is go to the Service Centre and add the ‘movers’ option to your shopping cart. By the time you have gone through the check-out, our movers will have been automatically advised that they need to call you. Couldn’t be easier than that!
You are entitled to a final inspection on the week of settlement. Another beauty of dealing with the seller direct, is that you can call them up and arrange a mutually beneficial time to do this – no using a middle man.
You may find that the seller will be happy for you to start moving in (even storing your stuff in the garage) prior to banks settling. There is nothing more frustrating than waiting for another person’s bank to settle, so you can settle – THEN you have to go to the real estate agent’s offices to collect keys, only to find that they are still waiting on the call from the seller’s lawyer to say they can “release the keys” – and in the meantime you are paying movers to sit around doing nothing! What a lot of unnecessary stress!
When you have bought privately, you will be on first name basis with the sellers – no need for that middle man sitting on the house keys, it’s entirely up to you and the sellers to negotiate over moving day. Please remember though, sellers are totally within their legal rights to ask you to stay away until they have had a call from their lawyer to say your bank has settled and they can hand over the keys, but at least you can have this conversation with them.
Your new home!
CONGRATULATIONS! Welcome to your new home, we hope you enjoyed your purchasing experience – we absolutely welcome any feedback on your experiences with the real estate market, and especially to do with the Trade Places website and associated services.
Finally, please remember, if you are happy with Trade Places please TELL OTHERS, if you are at all unhappy, please tell US – we will do our utmost to resolve any problems.