Minimising the pain of first-time house-hunting
Q. We have been trying to buy our first home for what feels like forever (about 18 months). I feel like we’re doing everything right – we’ve been saving hard for a deposit, we’ve looked at dozens and dozens of houses and we’ve even made a couple of offers. We’ve got friends who started looking after we did and who are already settled in their homes while we’re still paying rent and getting depressed. We feel like our failure to find a house to buy is holding back other parts of our life together, like getting a dog and starting a family. What are we doing wrong?
A. Do you know the saying that comparison is the thief of joy? It sounds like you certainly know the feeling. If it’s any consolation, you’re not alone. Real Estate Authority research has found that more than half of all first-home buyers – even the ones who successfully buy a property – find the process stressful and overwhelming.
It’s great that you’re in a good pattern with saving already, as buying a property is a major financial commitment. Have you investigated ways that you might be able to access help from the Government?
There are various forms of assistance available if you’re a KiwiSaver member, buying in certain areas, want to buy a former Housing New Zealand property or are Ma¯ ori and want to live on your ancestral land.
Getting financial advice from a qualified adviser at this time could also be useful in your planning for this significant investment you’re looking to make. It’s also a good idea to get conditional preapproved finance arranged so you can move quickly when you spot a property you really like.
Having conditional pre-approval lets you know the price range you can buy in and it shows agents and sellers that you’re a serious buyer. It’s also crucial if you’re planning to bid on a property at auction
What kind of properties are you looking at? Many first-home buyers discover a sizeable gap between the perception of what they’d like to buy and what they can afford when they first start looking. Sit down and write a tight list of what your absolute must-haves are, then work out what you’re willing to compromise on. If you’re thinking about pets and children arriving in the short-to-medium term, think about how these will change your needs. Will you need to be near to childcare or schools? Will you need a fenced property? If you’re the sort of person who likes a good list, we’ve got a useful ‘‘researching the property’’ checklist on settled.govt.nz that will help you keep track of all the questions to ask about a property. This is especially useful if you’re looking at more than one property at a time.
Buying a ‘‘doer-upper’’ is a longheld New Zealand tradition, especially for first-home buyers. It’s important that you be honest with yourselves about how much appetite (and aptitude) you have for DIY. Be aware that adding kids and pets to the mix might also limit your ability to fix a place up. Getting professionals in to help will make any process faster, but this will also come at a cost. Factor this in before you make an offer on a ‘‘renovator’s dream’’.
Remember, too, that owning a property means you’re responsible for all the maintenance and repairs – and for paying rates and insurance. Owning an apartment may also mean you need to pay body corporate fees. These costs can be a bit of a shock to the system if you’ve rented for a long time.
Don’t let your desperation to find somewhere blind you to a property’s faults. Do as much research as you can about a property. Get a lawyer on board to make sure all the paperwork is in order and to help you understand if there are any issues. We recommend getting a qualified building inspector who has professional indemnity insurance to prepare a comprehensive report on the property. This won’t be cheap, but it will buy you more peace of mind than a once-over by a mate. If you don’t want to do this before you make an offer (due to a lack of time, or funds), you can make them a condition of your offer.
Remember that timing is everything with buying a property. You might be disappointed that you’re not homeowners already, but a slightly softening market in some areas may now mean that you’ve got a greater number of options and a smaller number of competitors. An easing of loan-tovalue restrictions (meaning banks can increase the numbers of loans they make to first home buyers with less than 20 per cent deposit) may also work in your favour. Just like Rachel Hunter once said: it won’t happen overnight, but it will happen.
Kevin Lampen-Smith is the chief executive of the Real Estate Authority (REA), the independent government agency that regulates the New Zealand real estate industry. If you have a question about buying or selling property, send it to susan.edmunds@stuff.co.nz. For independent guidance and information on buying or selling, check out settled.govt.nz.