# Looking to buy home in NZ



## doublev

Can someone explain how the process works for someone that wants to buy property.

Do I hire a real estate broker and if so, how is he compensated? Does the seller pay him a % (like in the U.S.) or do I pay him?

We have met three real estate agents (by going to their offices) and I was impressed with the knowledge they had of their local market (the 5kms around their office) but they did not seem to have much knowledge of what was happening 15 or 20km away.

When i ask for "comps" or "listings" I generally do not get what I feel is comprehensive data. I want to see everything that has sold comparable to a house we are interested in.

In the U.S., I can query zillow and get at least some idea of where properties are trading. I can drive by the homes to double check the location. But in NZ, it seems so random how prices are established. Also, our budget is very high and the variance is extremely high when you get to the higher price point (I understand that views are paramount but how do I know it is worth X and not 1/2 X?).. 

By the same token there are not many properties selling for such high prices, so why is it so difficult for agents to send me a list of "everything that has sold within 20kms for over X in the last 12 or 24 months"? The agents seem to think this is the wrong way to price property (and I understand the importance of location)

So please help me
1. Is there any reason "not" to use a real estate agent? Do I just keep searching and searching to find one?
2. How are they compensated?
3. Is there any reason to work with the agent that is listing the home for sale? Does he have any duty to me under a "dual agency" (as in the U.S.) or will he just tell me whatever to make a transaction complete?

I think my biggest gripe is lack of price transparency in the housing market.


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## beckyandandy

I can't make a comparison to the US market as I'm British but we have just bought a house so will share my very little knowledge and experience with you. 

We viewed a few houses with a Real Estate Agent and they would provide you with rough figures on previously sold properties. Our biggest gripe was that they kept advising us to offer 100k over the RV! 
We then went into Harcourts where they advised us to offer less than the RV. We now live in a lovely house!
The lack of transparency in the prices is so hideous we ended up only looking at houses where it stated a rough price they wanted rather than by tender.
If you get the Trademe app on your phone I believe it shows prices that houses have sold for.

Hopefully someone more knowledgeable will be along to help you more. Good luck!


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## escapedtonz

doublev said:


> Can someone explain how the process works for someone that wants to buy property.
> 
> Do I hire a real estate broker and if so, how is he compensated? Does the seller pay him a % (like in the U.S.) or do I pay him?
> 
> We have met three real estate agents (by going to their offices) and I was impressed with the knowledge they had of their local market (the 5kms around their office) but they did not seem to have much knowledge of what was happening 15 or 20km away.
> 
> When i ask for "comps" or "listings" I generally do not get what I feel is comprehensive data. I want to see everything that has sold comparable to a house we are interested in.
> 
> In the U.S., I can query zillow and get at least some idea of where properties are trading. I can drive by the homes to double check the location. But in NZ, it seems so random how prices are established. Also, our budget is very high and the variance is extremely high when you get to the higher price point (I understand that views are paramount but how do I know it is worth X and not 1/2 X?)..
> 
> By the same token there are not many properties selling for such high prices, so why is it so difficult for agents to send me a list of "everything that has sold within 20kms for over X in the last 12 or 24 months"? The agents seem to think this is the wrong way to price property (and I understand the importance of location)
> 
> So please help me
> 1. Is there any reason "not" to use a real estate agent? Do I just keep searching and searching to find one?
> 2. How are they compensated?
> 3. Is there any reason to work with the agent that is listing the home for sale? Does he have any duty to me under a "dual agency" (as in the U.S.) or will he just tell me whatever to make a transaction complete?
> 
> I think my biggest gripe is lack of price transparency in the housing market.


Hi,

No you don't hire a real estate agent or broker.
You can approach real estate agents and go on their books for free and they will look at your wish list and budget and suggest properties in their portfolio that may interest you and they will also give you an indication of how the market is in the local area where they are operating. If you want info more specific or more widespread you'll have to approach a number of agents and collate all the info or pay for your own research via a property site like QV. View all properties for sale on Buy online and sell with NZ's #1 auction & classifieds site | Trade Me and each advert will show in the bottom right of the page the last few properties that sold nearby and the price paid.
Virtually all properties are listed on this site and you can find links on the adverts to other property selling sites - like for example homesell where people advertise their homes without using agents and the agents own websites themselves - e.g. Harcourts, Eves, Ray White etc.

Be aware all agents work for the SELLER or VENDOR. They are not working for the buyer. Their job is to get as much money as possible for the vendor and earn as much commission as possible from the sale and also take the least amount of time in doing so which maximises their return. Their only duty to you as a buyer is to ensure you are given all the facts and notified of any issues with the property or the process that is declared to them from the vendor. They have a duty to be fully transparent.
Agents earn money from a % commission at point of sale and the charges are high, maybe 5% of the sale price so it is a lucrative business and the reason why (i think) that the agents seem to go that extra mile with their advertising and auctions etc etc. They work way harder than I've ever experienced in the UK, but I suppose they have to have something to show the vendor for the high amount of $'s they receive in commission.

Trying to work out what price a property is worth or will go for is ridiculously hard and I've no real answer. When we were looking, we basically took the RV/CV which is a council valuation for rates purposes and added minimum $100k as an approximate figure to aim at. We then increased this depending on the additional individual merits of a property, so for example if it had a real good view we added $40k on, if it overlooked a reserve another $25k, if it was refurbished with state of the art bathroom/kitchen etc etc then we added some more to come up with a possible sale price. On the flip side we decreased the price if there was any work needed, needed updating or if the building report mentioned any issues that would need rectifying after becoming owners. Many of the properties we looked at went for way more than $100k over the RV/CV and majority to Auckland investors or people retiring to the BOP from Auckland. We just couldn't compete with the cash they had to invest and even if they paid $250k over the RV/CV the property was still cheap as chips to them and way cheaper than what they would get for the money in Auckland.

Best thing to do is trawl Trademe and make a list of the houses you like. Attend open homes or make appointments to view and even go to a few property auctions to get a feel of how it works and likely property prices. Beware of monolithic clad homes which are potentially leaky and may give serious cost issues to maintain or sell on in the future.
If there's a property you like then it'll be time to sit down with the agent or owner if selling themselves and negotiate a price or work through the auction process.
All offers must be made in writing via a standard sale & purchase agreement no matter which method of sale is involved (auction, tender, negotiation, fixed price). 
You are responsible to ensure the details of this agreement are correct for your circumstances and for the property you wish to buy including the conditions that must be met in order to fulfill the contract which leads to settlement. Auctions are different as you can only bid at auction if you can go unconditional straight away...there is no "conditional" stage at auction so you must have already done your due diligence and have funds already in place before bidding. At auction the sale and purchase agreement and conditions within will be fixed by the agent/vendor.

It is essential (if not buying at auction) that you have a solicitor on board who has cast their eye over this sale & purchase agreement before you sign it. Once you and your solicitor is happy, hand the signed agreement to the agent for them to cast their eye over it. They may want to sit down with you and discuss any conditions you have added as the more conditions on the agreement the less likely they are to get an agreement from the vendor. Once you and the agent are happy, their next step is to put it down on the table in front of the vendor as a written offer. 
If the vendor signs it then you are under legal contract and in a state of what is called "conditional" for a period of normally 10 or 15 days. This means both parties have a period of 10 or 15 working days from the date both parties have signed to fulfill all the conditions - e.g. one condition for you may be to arrange finance and one condition for the vendor maybe to arrange a builders report.
If the vendor doesn't agree to your offer and doesn't sign then the sale & purchase agreement can be renewed as many times as necessary until you do reach an agreement or you can withdraw.
Once all conditions have been met, the solicitors agree to go in to a state of being "unconditional" and a date for settlement is set which is usually around 10 working days. A deposit of 5% or 10% is usually paid at this point by the buyer and this would be lost if you pulled out. There are high penalties for both parties at this stage if either pull out of the legally binding contract.

In answer to your questions :-
(1) I wouldn't put all my trust in an agent to find me a property where I am not the priority. They can be a useful tool in the process but they don't work for you.
(2) Commission from the sale.
(3) You have no option but to work with the agent who is selling the property. Without them you cannot proceed. Once a vendor signs up with an agent to sell a property it would be unlawful for them to discuss the house sale without the knowledge of the agent. They are under contract that the sale is handled by the agent.


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## kiwiben

Hello doublev, 
it has lots of panic while buying property. 
Every people has different different experience and choice. 
i can just share my opinion.
If i am your stage:
1. i will hire real estate agent (as i am overseas, i need some expert who has depth knowledge regarding real estate industry)

2. You may check affordable studio apartment as well. I took help from real estate agent 

Cheers


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## hyweldavies

It is very different to the States here. Houses are marketed by a single estate agent and other estate agents (even with the same company) have no incentive to sell you a house that is not in their portfolio. Find a way to get to the council (same as the city) website and find a way to find out what the rateable value is. What is very frustrating is sometimes they do not even put a price for a property just say invite offers. We do not live in one of the centers but were concerned at some point when property goes to auction as you either have to pay a lot of money for a survey before or you take a huge risk. At the end of the day we decided the risk of the auction was not worth it and we said we would not buy a house (even our dream one this way). Best advice is to let a lot of estate agents know you are buying, get on their weekly email lists as if you are a serious buyer then (outside Auckland at least) you might be popular.


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## LuisVangog

Selling and buying property is really hard nowadays


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## PankyDonalds

I think that buying and selling property differs greatly in our place. It was easy for me to sell my house, despite not being in the best condition. I think its placing was just the main benefit we managed to find. It was small, and the ventilation system wasn’t the best (the windows were wet because of condensation in winter)


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## PankyDonalds

PankyDonalds said:


> I think that buying and selling property differs greatly in our place. It was easy for me to sell my house, despite not being in the best condition. I think its placing was just the main benefit we managed to find. It was small, and the ventilation system wasn’t the best (the windows were wet because of condensation in winter)


Also, it was always dark in each room because half of them faced north and the other half was hidden by trees and tall bushes. Thanks to a good agent, we were able to sell house for cash quickly and even afford a nicer and bigger one. I hope my comment was helpful.


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