Common Questions About Buying a Home

Some answers to commonly asked questions.

  • What are the most commonly used methods of buying property?
    • Priced – a given price is put on a property to give buyers an idea of what the vendor wants for their property, calling offers around the given price
    • Price by negotiation – no price is given to the property, private negotiations between selling agent and buyer are made
    • Auction – the property is sold in a public bidding situation to the highest bidder
    • Price on application – The selling agent is the only person allowed to disclose the asking price on enquiry
    • Offers/no price – Generally calling for offers on a property without giving any price reference
    • Tender - Calling for purchasers to make their best offers in writing for that property by a given date
  • What do I need to know if I am a first home buyer
    Careful planning and budgeting are essential when it comes to being able to afford your own home:

    Finance and deposit:
    Setting yourself up with saving goals and speaking with your bank is an excellent first step when considering purchasing your first home. Lenders generally require a deposit of 10-20% of the amount you’re borrowing or more. Therefore if you’re buying a house worth $400,000 you’ll need to save a deposit of at least $40,000.The larger your deposit the less interest you will pay in the long term. Work out how much you need to save; the difference between what your mortgage payments could be and what you’re currently paying in rent gives an idea to you and your lender about how your budget will be able to cope.

    Obtaining a mortgage/first home loan:
    One of the most important financial commitments you’ll ever make, choosing the right home loan with interest rates and flexibility to personally cater to your needs is paramount. There are many types of mortgages, all with their own pros and cons. Shopping around for the right one takes time, this is where a mortgage broker comes in handy with services that are usually free.

    Keeping money aside to pay for moving-in costs is ideal, such as moving truck fees, connection fees for power, internet and phone, advertising for flatmates and tenants and builder’s reports and legal expenses.

    Ongoing costs including (but are not limited to) rates and body corporate fees pop up every year. As a home owner, these costs are compulsory to pay. Check with an agent about rates before putting an offer in on a property, or look them up on a local council website to see if you can afford them.
  • What is Kiwisaver first-home savings withdrawal?
    After three years' membership of a KiwiSaver scheme, you may be able to withdraw all, or part, of your savings (but not the government contributions) to put towards buying your first home. In the first instance, please contact your KiwiSaver scheme provider.
  • How do I buy a property using KiwiSaver?
    If you are part of the KiwiSaver subsidy scheme, you are entitled to the following contribution towards your deposit:
    • 3 years of contributing = $3,000 (the minimum you can get)
    • 4 years of contributing = $4,000
    • 5 years of contributing = $5,000 (the maximum you can get)

    It will take 5 working days to assess an application for the deposit subsidy, providing you include all the required supporting documentation. If you are eligible, a letter will be sent to you to confirm the deposit subsidy is available. You can take this to the bank as it counts towards the total finance you have available to buy your first home. Legal documents will be sent to your solicitor from the bank which you will need to sign and return no later than five working days prior to settlement date. Once documents are received, an arrangement to pay the subsidy into your solicitor’s trust account on the day of settlement is made.
  • Who negotiates the deal when an offer is placed on a property?
    A licensed real estate agent will present the offer made on a property to the vendor, discuss and negotiate with them, and bring back the result to the buyer straight away. Once the conditions have been met, the property will become unconditional and the property regarded as sold. If an offer is not accepted, the contract will be deemed at an end and no party should have any claim on the other.

For more information, contact your Harcourts Sales Consultant or our office.