Top 10 Tips For First Time Buyers
Most would agree it is important to make an informed choice when buying a house, especially your first home. To get you on the right track we have put together this list of 10 tips for first home buyers.
1. Do Your Research
There is a wealth of information online just waiting to help you in your search for a new home. Cross reference house sales and prices for similar sized properties, properties nearby and properties with similar features as well as what you would get for the same money in different suburbs/areas. There are plenty of online resources which provide up to date Market Reports, try QV for some great statistics and New Zealand real estate data.
2. Make Multiple Visits
Visit the property as many times as you can prior to making a decision. Vary the time of the day and be sure to go on week days not just the weekend when traffic will be busier. Check out where the sun is at different times and think about how different it might be in the summer and winter. Keep in mind sun, privacy, parking and views are always going to be sort after - the more of these things you can tick off the better.
3. Understand Compromise May Be Necessary
While visions of the iconic Kiwi ¼ acre backyard, floor to ceiling windows and granite kitchen bench tops may be floating around in your head, first home buyers need to be realistic. Your first home is not likely to meet all of the requirements on the ‘Dream Home’ list, but you have to start somewhere, so look for homes with the potential to be renovated, expanded, updated etc as these things can be done over time.
4. Get A Builders Report
Buying a new home is one of the biggest purchases you will make, nobody wants to find out they have bought a lemon! A thorough building inspection for both the properties interior and exterior is very much a necessity in today’s market, particularly in places like Christchurch where many properties have been affected by earthquakes. Look for companies that provide comprehensive reports with explanations, estimates for repairs and recommendations.
5. Shop Around For The Mortgage
Different banks will offer different deals, saving just half a percent on your interest rates can amount to saving thousands of dollars over time. Getting mortgage pre-approval is also a good idea, this will give a good indication of how much money you can actually borrow while putting you in a good position if you find yourself in an auction situation. The amount banks will lend you will depend heavily on your income, the amount of deposit you have saved and the value of the property you are wanting to buy.
6. Start Saving Yesterday
Having enough for the deposit is vital to buying your first house. Start saving as early as possible, and as much as possible, it will mean the difference between being able to buy a house when you are ready and having to wait while properties you like pass you by. Current lending restrictions in New Zealand usually require a deposit of at least 20 percent of the house value, for more information on saving for your first home take a look at the ‘Sorted’ - Buying A First Home guide.
7. Prioritise Needs vs Wants
Make a list of everything and anything that you would like your new home to have, then classify these into needs and wants. Don't forget to include things that aren't actually a part of the house, including the neighbourhood, commute distances, nearby schools and proximity to family and friends. Knowing what you really want up front can make all the difference when it comes to deciding to make an quick offer.
8. Get To Know The Local Agents
Developing a good relationship with local real estate agents can be beneficial, most agents will happily notify you of properties coming up that may meet your search criteria. Local agents can also be a good source of information and advice particularly when they specialise in selling the type of property you are looking for, in the area you are searching.
9. Get Auction Savvy
This one is particularly important in areas like Auckland, where multiple buyers are interested in the same property on a regular basis. Speak to your local real estate agentabout what the requirements for being ‘Auction Ready’ are, how an auction works and what happens on the day. This online resource is a great place to start learning more about what happens on auction day.
10. Look Into KiwiSaver Homestart Grants
In New Zealand if you have been a contributing member of the KiwiSaver scheme for over 3 years, and are looking to buy your first home, there is a possibility you can apply KiwiSaver HomeStart grant through Housing New Zealand. There are conditions however, including having saved a deposit of at least ten percent of the purchase price. See here for more information on the KiwiSaver HomeStart grant and other options for house buyers looking to buy their own home.
Home ownership in New Zealand is at the top of the wish list for many Kiwis and being well prepared is an important step in that process. Gathering the right information and making the right real estate decisions will pay off in the future.