First 'home' buying

[steved]

Hi all

I am considering diving into this fun-filled game. So far I have a deposit, and I have organised a meeting with a broker. As a total n00b, if anyone has advice it would be much appreciated. I would like to understand a little of the process before the meeting. I am interested in the role of lawyers, mortgages, brokers, steps of buying etc. I understand that this is a fairly large question, and a fairly daunting endeavour for the unexperienced (me).

Cheers

:yes:

[bugjuice]

can't offer any advice, but I'm about to do the same thing, so I'll be having a good read thru too..
Good luck dude :niceone:

[WINJA]

i know mike pero are quite good as far as brokers go theyve cleaned up their act alot of brokers havent .
when you buy a house you should consider that you dont have to live in it

[Grahameeboy]

Hi all

I am considering diving into this fun-filled game. So far I have a deposit, and I have organised a meeting with a broker. As a total n00b, if anyone has advice it would be much appreciated. I would like to understand a little of the process before the meeting. I am interested in the role of lawyers, mortgages, brokers, steps of buying etc. I understand that this is a fairly large question, and a fairly daunting endeavour for the unexperienced (me).

Cheers

:yes:

Simple the Broker will tell you all......they get commission from Bank not you so should be honest........you can make an offer subject to conditions so whilst it seems scary you can protect yourself

[emaN]

I am interested in the role of lawyers, mortgages, brokers,

they take the pingas, you get a big debt.
but it's worth it...so i'm told.

is your mortgage broker 'proven'? ie-have friends/family used him/her?

he/she will look at your assets & liabilites, income & expenditure and let you know what you can afford.
goes from there..

and if you don't know/are confused by something, ask Q's, have it explained!!
you're the one who's gonna end up with the mortgage,so ask Q's!

good luck!

[**R1**]

i know mike pero are quite good as far as brokers go theyve cleaned up their act alot of brokers havent .
when you buy a house you should consider that you dont have to live in itAnd make sure the roof is painted??

[Lou Girardin]

Don't trust Real estate agents. Believe me on this, I was one for 11 years.
Take everything they say with a large grain of salt. Ask them questions like, "do you know of anything about this property that could affect my decision making".
They'll love you for it.

[Devil]

Ditto on the ask questions part.
You can negotiate a better deal with banks. Screw them for as much help with legal fees as possible! It adds up very quickly!

[Drum]

If there is one rule to follow then it is: Never sign anything until your lawyer has had a look.

Take a look here:

http://www.jenman.com/BS_B_13Worst.php?PHPSESSID=e540f0beb3fa7c3d8579fab c1d7e5cc4

I also recommend working out how much you can afford. Then add another 5% to the interest rate. Then remove your partners income. Then add another mouth to feed. Then work it out again.

Good luck!

[cowboyz]

real estate agents.. they do nothing and get paid alot for it. They are working for the VENDOR. They are not working for you!! I can't stress this enough. When you get sick of them tell them to go away. In the mean time ask every question that comes into your head. Make them do *something* for that commission they are making. It anit small change.

lawyers... they do nothing and get paid more for it. You need one. No idea why you need one.. It is a bit like your riding gear. If everything goes bad you will be so happy you have a lawyer.. But then if all goes well (which we hope it does) then you will wonder why you just gave that lawyer a grand for a few letters.

banks.. They will have you believe that they are doing you a favour by lending you the money... In reality it is you that is doing the bank a favour by giving them a shit load of interest money.

Make the purchase conditional. Condition of finance is a must. And if something goes wrong or you change your mind about the house it is the easiest way to get out of the contract. Just say, sorry, we can't finance this now and all is gone. When we brought this place it was a condition on the contract that the house could recieve JetStream. The real estate agent bitched about it alot saying she has never seen a clause like that in any contract that she has been involved in. First time for everything.

My last advise is don't haggle. Make your terms. Set your price. If they don't like it then there will be another house. I have seen a few people try haggling with lawyers and agents and after you start with your lowest price and add a little bit and add a little bit you end up way over your highest price.

Best of luck to you.

[Beemer]

Don't rush in - we were in the same position as you a few years ago and nearly ended up becoming the owners of a place that was at least 30 years older than the real estate agent said it was! Make sure you get a building inspection carried out and make any offers conditional on it if there are any doubts. Try not to let your heart rule your head and work out what you want BEFORE you go looking. Write a list of the must haves (such as the number of bedrooms, location, garaging, fully fenced, size of rooms, aspect - sun, etc) and then things you would like but aren't essential (decking, easy-care grounds, study, etc) and then start looking. Go to as many open homes as you can, to get a feel for what is out there and what price is being asked. If you find a good agent, grab him quickly! Ours was excellent, we didn't really know what we wanted so he took us to a range of different places and each one narrowed down our search. The only thing wrong with the place we eventually bought was the gravel driveway - which we had concreted immediately.

Depending on where you are buying, find out what could happen in the future. A house a few kms from here has been sold twice in the time we've been here and is on the market again now - because the large farm block that surrounds it on three sides has been sold and there are plans for a subdivision that would ruin its peaceful outlook and privacy.

Go back at different times of the day too - and on Friday and Saturday nights - you'll soon find out where the sun is and if the neighbours are hoons!

[Devil]

As someone mentioned before, work out your budget carefully. Dont forget to take into consideration rates!

[_Gina_]

Hi all

I am considering diving into this fun-filled game. So far I have a deposit, and I have organised a meeting with a broker. As a total n00b, if anyone has advice it would be much appreciated. I would like to understand a little of the process before the meeting. I am interested in the role of lawyers, mortgages, brokers, steps of buying etc. I understand that this is a fairly large question, and a fairly daunting endeavour for the unexperienced (me).

Cheers

:yes:

I highly recommend using a broker, and specifically this guy:
Adam Henden
Mortgage Manager/Franchise Owner
Office 09 306 6680
Mobile 027 577 5995
Fax 09 307 2062
adam@mikepero.co.nz (adam@mikepero.co.nz)

He was brilliant (just bought a place in December)
$850.00 legal fees and a brilliant concession off the interest rate (lady at the bank was amazed)
Also the communication was excellent and they come to you!!

Good luck and as others have said, do the calc's again to include a higher interest rate to see if you can handle it.

Gg

[HDTboy]

ManDownUnder wrote a large comprehensive post on the ins and outs of this about 9 months ago, if you do a search you might find it

[Lou Girardin]

Don't hesitate to screw the real Estate shark on his fees when the going gets sticky.
You don't actually pay the fees as a buyer, but you can make the suggestion.
They certainly won't.

[RantyDave]

Think *very* f'kin carefully about buying a house right now. In most places rents are now significantly below the interest on a mortgage. This means that, effectively, the landlord is paying you to live there - not to mention ringing them up to say "roof leaks, bitch, get over here" and similar such amusement.

Why do they do it? Property investing has become *the* trendy Kiwi pastime over the last few years. Mostly due to an excess of money (economy is doing quite well) and a lack of belief in the stock market (tech bubble, anyone?). So your landlord has only bought the house due to a belief that it's value is going to skyrocket upwards, much like houses have been doing for the last few years. Indeed, buy a starter house now and you're likely to prove some smug property investor right - and it'll cost you about four Ducati's to do it.

Get some statistics (IIRC BNZ do some good ones), particularly comparing rents to property values. Do the math. Properly. Have a big, big think about this because the decision can gain/lose you six figure sums in a very short period of time.

Dave

[Swoop]

Figure out how many bikes can be parked, - and where!!!:apint:

[Motu]

Ditto the real estate agent,they are only interested in lining their own pockets...these days they are worse,so many people have read the get rich quick books and with the housing market as it's been the last few years,they have settled on real estate to make money like flies to freshly laid shit in the bushes.This last house we bought we were told not to offer less than the asking price as the owner was likely to get upset and raise the price! We offered $20,000 less,and got it.Once when I bought a section the agent wouldn't even come out and show it to us - ''oh,it's down **** road and covered in gorse''.So went and had a look at the only section on that road covered in gorse,and after several days of the agent saying he couldn't get in touch with the owner,I found out the name of the owner from the council and rung him myself.He was a bit suprised as the section wasn't on the market! The agent got it wrong! The owner asked how much the agent said it was worth,and sold it to us for $2000 less in a private deal.Just keep making the moves....some will be the right ones.

[MisterD]

real estate agents.. they do nothing and get paid alot for it. They are working for the VENDOR. They are not working for you!!

Nearly right, in reality they're working for themselves, they're not after the best price for the vendor they're after the best QUICKEST price that they can get commission on with the least work....so any of you out there selling should do it yourself.

Now's a really good time to be doing your research go to as many open homes as possible, find a friendly builder who can check places over for you and remember banks want you to borrow more than you can afford. Good luck.

[merv]

I've bought a few houses and always make them at least conditional on:

1. Subject to finance.
2. Subject to title search.
3. Subject to satisfactory LIM report and/or building report.

1 covers you for hassles like if the bank asks for a valuation and that turns out no good so you can't get finance.

2 lets your lawyer have a chance to check all the easements, covenants and stuff like that if there are any. Have your lawyer lined up in advance and keep him/her close to your action and fully informed. They aren't cheap but you need them.

3 Lets you check all the building stuff. Go down to the local Council and ask to see the file for the house and ask for a LIM report (here costs zip for file search, LIM $120). It will list all the relevant planning and consent info and here they always give us a set of the original house plans which is cool. The trick is to look for what you can't find. i.e. check the house and then check the file. As an example the house I live in now the builder built retaining walls out back - no mention of them on the original plans or anything subsequent. Council rules were anything within 1.5m of the boundary needed resource consent (as separate from any structure over 1.5m high requiring building consent) so I made the guy selling the house to me get that tidied up before I would buy it getting consent from neighbours etc. So if it isn't on the file or in the LIM report someone never got approval for something - classics are woodburner fires and things like that.

If you aren't confident about your judgement of the house in an engineering sense then go for a building report - probably about $400 or so from places like RealSure or Joyce Group.

The worst thing is the haggling over the price. Now the thing that has pissed me off most lately is the number of houses going by tender. You end up doing all your homework up front to put a bid in - it cost me $1,000 in the end to bid on a house recently and we lost the bid. Its worse than auction as you are either given all the info you need there or can follow up later. Stick conditions on a tender and you drop to a lower part of the heap of bids. So my advice particularly to a nOOb is forget tenders, chase the houses with a price on them. Tenders only make the agent getting his commission easy and its harder for the buyers.

[Timber020]

We got screwed over by the tender process, it sucks, they came back to use 4 times to increase our tender over other that had put them in. If they want an auction then make it a fuc@#$# auction you blood suckers!

Wait it out a little, if bird flu kills 60% of the population its going to make alot of houses, cars and bikes without owners. Sweeeeeet!

[Marmoot]

Put extra condition: subject to Solicitor's approval.

A good lawyer will give you a heads-up if he/she sniffs something that might go wrong (such as "why this apartment building does not have a Code-Compliance" that real estate agents always say no-worries).

Another advice: (especially since I am in apartment business) if you are buying a house, get mortgage broker and lawyer that has a lot of house experience. If you are buying an apartment (like other thousand people) then get broker and lawyer that are experienced in that field. Apartment and house are very different matters but a lot of people think they are the same.

Since you are in North Shore, if you need a great solicitor, PM me. I know of an old lady that is very kind (to her client) and performs very well (against the seller's lawyer) and only charge a reasonable cost. Great service. She is great if you are buying houses. I know of a great private mortgage broker too for that matter.

[Mooch]

Mandownunder started a thread a while back which also maybe of help.
Plenty of good tips.
http://www.kiwibiker.co.nz/forums/showthread.php?t=13994

[Karma]

Hey Marmoot... I was under the impression that apartments are hard to shift at the moment...

Been looking at getting one in the CBD in the nearish future, seems there's tons available, but all way overpriced for my liking.

$150k for a 31square metre apartment... what do they think Auckland is? Manhattan or something?

[Mooch]

Interesting post Ranty , Have you lost money in property ?.
Our rental has increased by the value of at least 4 new Duc's in a two year period. Rent covers mortgage / rates / maintance, capital gain has been good. I don't think I've met anyone that's been into in the med /long term who has lost money bar one dodgy first time property developer.
Share market investing is a full time roll, I've been looking closely it this for a number of years now, I've been tracking a few technology shares since 1999.
If I'd put 30 k in within 6 months it would have been 56k , shortly after the Microsoft law suites started , the whole sector suffered (Nasdaq) , the 56k dropped to 12k. It's taken 5 years to recover and would now be worth 38 k.
I realised that you need to put in considerable time , and learn when to buy and sell. Property is far easier in this regard and I believe compared with share trading takes less time. You could of course trust this to a broker , but I know of a few people that have lost plenty of money by doing this.

[Mrs Busa Pete]

Hi steve i am a marketing consultant and not all consultants are that bad i work to get a fair price for both partys. You have been given a lot of good advice from other members like Limb report, building inspection report, finance clause.One of those will cover you should you want to cancel contract.there is another one but i can't spell it will post that clause tonight that is very good to have in there.the clause subject to lawyers approvel is a waste of time because your lawyer could not not get you out unless there is something wrong with property which are covered by above clauses .When you find a property that you like and think that you would like to put offer on ask consultant for a list of propertys that have sold in the area to compare prices you must drive past them for comparasion this list will tell you what they where listed at and what they sold for.If i can be of help pm me most important ask this question do you know of any problems with house or land that may give me concern later on down the track . ps i'm not in your area so not trying to drum up buz for all those skeptics Good luck in your search one other thing make sure you are not paying broker that his fee are payable by the bank if you are go somewhere else.

[MisterD]

Interesting post Ranty , Have you lost money in property ?.
Our rental has increased by the value of at least 4 new Duc's in a two year period.

Good on ya for getting success out of luck and good planning (the more of the latter, the more of the former etc). But I think Ranty is right, now is the time to be very careful and not to neccessarily believe the spin from mortgage lenders and estate agents.

[Marmoot]

Hey Marmoot... I was under the impression that apartments are hard to shift at the moment...

Been looking at getting one in the CBD in the nearish future, seems there's tons available, but all way overpriced for my liking.

$150k for a 31square metre apartment... what do they think Auckland is? Manhattan or something?

choose it well and you'll grab a fortune.
In my observation, apartment market at the moment goes on a principle of "all or nothing".
Get the cheap one and you'll run the risk of losing money (a.k.a. no gain).
Get the big one if you want it to have proper market.
Look at the situation: cheap apartments are for overseas students (which are not there anymore) but big apartments are for newly-rich people (which are getting more and more in Auckland).

Yes, if you want to invest in apartment you'll need at least $300k nowadays.

The general rule-of-thumb is: if you don't think you'd be willing to live in it, don't bet that anyone would be either.

[Marmoot]

Good on ya for getting success out of luck and good planning (the more of the latter, the more of the former etc). But I think Ranty is right, now is the time to be very careful and not to neccessarily believe the spin from mortgage lenders and estate agents.

Yes. It has come to time of being careful.

Property and rental market always goes in a cycle. And I think the down-turn is close at hand. Expect it to slow down (or die away) for the next 1.5 to 2 years before the government realize something is wrong and does another u-turn leading to another up-turn.

[Lou Girardin]

Property works, in 4 years we've gained on paper the equivalent of 1 1/2 years income after tax.
For doing nothing but live in it. But we did buy at the start of a boom cycle and rode the wave.
I've never not made money on houses. But there are traps, especially the 'leaky house" issue.
When buying, you have to know when to walk away. We did with our first choice, it got into an informal auction (multiple offers). We withdrew our offer after the first evenings negotiation. Then a better house came along as they always do.

[Grahameeboy]

Property works, in 4 years we've gained on paper the equivalent of 1 1/2 years income after tax.
For doing nothing but live in it. But we did buy at the start of a boom cycle and rode the wave.
I've never not made money on houses. But there are traps, especially the 'leaky house" issue.
When buying, you have to know when to walk away. We did with our first choice, it got into an informal auction (multiple offers). We withdrew our offer after the first evenings negotiation. Then a better house came along as they always do.

I can beat that Lou...my house has almost doubled in 4 years......I expect your usual standard of reply..

[Lou Girardin]

I can beat that Lou...my house has almost doubled in 4 years......I expect your usual standard of reply..

Congratulations?

How about, we gained a 125% pa return on our original investment - tax free.
Gotta resist looking at all that equity with one eye and the other on more toys.

[Grahameeboy]

Congratulations?

How about, we gained a 125% pa return on our original investment - tax free.
Gotta resist looking at all that equity with one eye and the other on more toys.

Put those toys away Lou......reckon I owe you a beer