The reasons to buy property in New Zealand far outweigh the reasons not to – for example, the fact that the nation is roughly the same size as the UK but has a fraction of the population means that there is plenty of space for each citizen, additionally there is lower unemployment in New Zealand than in the UK and the cost of living is lower too. Despite a house price boom of late, property prices are also more affordable AND the process to purchase real estate is as simple as it is in Great Britain.
So, if you’re thinking of buying a home on the North or the South Island we can quite see why, and if you want to know how to go about it here is the New Zealand property buying guide to answer all your open questions and assist you with buying a home on the other side of the world.
Unlike in the UK where you have to make an appointment to view a home you like through the estate agent marketing it, in New Zealand the vast majority of homes for sale have open days. These days and times of opening are advertised with the property for sale in newspapers, or you can call the estate agent marketing it for details. Open days – or rather, Open Homes as they are called – are opportunities for potential buyers to visit the property, spend time looking round it and speaking to the estate agent and possibly the vendor as well. Naturally enough, the more popular the house the more popular the viewing will be.
Some homes are for sale like in the UK with viewings by appointment only. Once you have viewed the homes that you are interested in they will either be for sale at auction or at a fixed price. If the home is for sale at a fixed price you have to submit a formal written offer to buy the property at a given value. This offer is then given to the vendor by the estate agent or your lawyer. If the offer is accepted it is usually subject to such stipulations as an independent evaluation being conducted on the property by you, a clear and successful title search being carried out for you by your lawyer, a building inspection report coming back with no problems having been found, a satisfactory LIM (land information memoranda) report result and also probably the sale of another property by you and also having mortgage financing approved as well.
So, the offer is accepted and a preliminary sales agreement is drawn up stating that you will buy at the agreed price subject to the satisfactory outcome of all the above stipulations for example. Within the contract there will be a settlement date which can be as little as three weeks hence, as much as six months ahead, but which is usually set at six to eight weeks from the contract creation date. At this point it is usual to pay a deposit - which is held by the lawyer or estate agent. The deposit is about 10% of the purchase price.
Until the settlement date you and your lawyer have time to get all the surveys, searches and reports done on the property to ensure all is in order with the home and that the sale should go ahead. You can get advice about the searches and reports you need to have done from the Real Estate Institute. Once all is found to be in order with the house, your own house sale has gone through and you have the mortgage ready and in place, settlement date will be reached, final monies transferred and you can take possession of your new home. Your lawyer will take care of registering you as the new owner…but you should have taken care of getting utilities and services transferred into your name from the settlement date forwards.
If your preferred New Zealand property for sale is for sale at auction rather than at price, don’t panic. Whilst buying at auction in the UK is unusual, in New Zealand it is pretty much par for the course. What you have to do is all your homework in advance of the sale. So, register your interest in the property formerly with the estate agent and then get the builders and inspectors in to check every nook and cranny of the home because an auction property is sold unconditionally – i.e., it is sold as seen.
The other thing with an auction is that you have to have all the money to hand to pay for the property. On the day of the auction, if you are the successful bidder you have to literally have enough in hand to pay the deposit – then you cannot ask for time to arrange a mortgage or bank transfer, you need a mortgage in place or the cash in the bank as the remainder will be due within days of the sale.
If in doubt about the process, ask the estate agent any questions you have. And finally, in terms of taxes etc., the good news is that there is no stamp duty in New Zealand and you should allow 10% to comfortably cover you for all additional expenses.
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