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With the news just out that we will be in Level 4 lockdown at least until 11:59pm Tuesday 24th August, we thought we would do a quick post to remind you what that means in regard to Real Estate.

The health and wellbeing of our team and our customers is of paramount importance to our company.  Under Level 4, as a non-essential business, our physical premises have closed and our team members are now working from home to look after not only their current activities but also ensure that we maintain the highest level of service to our customers and clients.

We will remain active and on-call, available by phone and email.  Whilst some patience will be required by all of us as we adjust to a slightly new way of working, we will still be able to work with you on your sale, settlements and manage purchaser enquiry as it comes in.  Whilst we don't have a crystal ball, rest assured our management team are monitoring things daily and our team is meeting digitally to discuss what is happening in our market.  We are also in regular contact with the Real Estate Institute of New Zealand and any new developments are being communicated daily.  We look forward to continuing to provide our customers with great service and excellent outcomes in the days ahead.

Some answers to questions you might have right now:

Can I receive an appraisal?

Yes! Online appraisals can be completed and emailed to potential sellers. You will note that these virtual appraisals will clearly state that they were conducted online and without the ability to physically inspect the property due to COVID-19 Level restrictions - we will endeavor to update these after a physical inspection of the property as soon as the isolation restrictions are lifted.

Can I list my property now?

Yes! We have the technology in place to be able to list your property during this Alert Level Period. All agency agreements, AML and marketing can be signed digitally and we can talk you through the process and advise the best way moving forward.

How will you market my home?

At this stage there are no buyer appointments but these can commence again at the lower Alert Levels.  We have great online platforms to capture the audience while we have such a strong online audience.

Can I make an offer on a property?

Yes - sale and purchase agreements will continue to be available during this time and your agent will be able to accommodate a digital signature in the event you do not have a scanner or printer at home.

Most of the lawyers are still available by email for legal advice.

How do I arrange finance?

Vendors and purchasers should talk to their bank or financial services provider in the first instance, most are mobilised and able to transact business.

How do I complete the Anti-Money Laundering paperwork?

All Anti-Money Laundering (AML) paperwork can be completed online.

What about satisfying conditions on a contract?

Conditional contracts can still be confirmed during this time; however should a condition not be able to be met due to the restrictions under the Alert Level 4 period (examples would be the inability to conduct a property inspection and building inspections), then the buyer and seller would need to advise their legal representatives and either extend the condition until after the lockdown, or cancel the contract. The party's lawyers will make appropriate amendments to the contract to facilitate this.

Can I get a LIM?

Looking at the information provided it is unclear whether the Nelson City Council and Tasman District Councils will be processing LIM applications at this time. .

If purchasing, we would still suggest filing a request for a LIM so when these are able to be processed you will already be in the queue.

What about pre-settlement inspections?

These are unable to take place in person during lockdown, however, if both parties agree, these could take place using video conferencing.

What about moving dates?

With "moving house" not defined as necessary travel during Stage 4 lockdowns, we suggest deferring settlement dates with your solicitor. 

As always just give us a call with any specific questions or concerns. We are on board and here to help.

This information is from the Real Estate Institute of New Zealand (REINZ) and factual at the time of publication of this blog.

The way the market often behaves, whether we like it or not, means that we are usually not the only one to like a particular property. You know, well presented, right area, right size, right price band…

We regularly meet buyers who believe that they are ready to make an offer, but often miss out. Why?

Recent Scenario
A great property came to the market, smack bang in the middle of many buyers' wish list. It was marketed with a 3 week set date of sale (unless sold prior).

After 2 days of marketing someone wanted to make an offer and didn't want to wait. The vendor instructed us to call for all offers 5 days later, to give others a chance. We received 6 offers which were presented. Although all of the offers had conditions, and were close, if not the same, in price, the winning offer simply got over the line due to having the shortest conditional period.

These buyers had made sure that they were in a position to move as quickly as possible if their offer was accepted. So what did they do?

Before they made their offer they had already:
• arranged for a builder to be on standby to do a rapid inspection
• established a relationship with a solicitor
• understood the exact requirements of their bank
• spoken to their prospective insurer and understood their requirements
• understood how a multiple offer scenario would work
• read the LIM provided by the agent
• visited the local council to clarify items on the LIM
• made sure that the agent knew they were definitely interested in placing an offer

These activities allowed the successful buyers to know exactly how long they would need to work through their conditions and because of this, they were able to secure the property.

A common mistake
You might assume that if you are in an early multiple offer situation, buyers would be in a totally cash position (without conditions), right? Wrong.

As well as the example above, we recently saw a property receive 11 offers, but only a single offer unconditional. This often occurs when offers are called for in the first week of marketing, as buyers haven't had enough time to do their due diligence.

The lesson?
So, the moral of the story is, get as many things in place you start visiting property for sale, because if you love it, chances are others will too.

The checklist

  1. Make sure you are receiving notifications of new listings as soon as they hit TradeMe or realestate.co.nz.
  2. Talk to your employer and make sure they understand your need for urgency and let you slip away to view property as soon as possible (don't wait until the weekend).
  3. Locate a suitably qualified builder and make contact. Explain your circumstances and establish how quickly they can guarantee to inspect a property for you, if you have an offer accepted.
  4. Locate and meet with a solicitor to discuss requirements and speed of service.
  5. Learn how to read a Land Information Memorandum from the local council and obtain a copy from the agent representing the property (if they provide one). Read a blog related to reading LIM reports here: https://www.susaguhl.co.nz/5-tips-to-make-reading-a-lim-report-easy/
  6. Obtain written pre-approval from your bank and understand any constraints and time-frames.
  7. Talk to an insurer and gather all relevant information so you have a level of confidence about what you'll need to get insurance.
  8. Contact a valuer and establish how quickly they can produce a valuation if you or your bank want one.
  9. Get a copy of a multiple offer document and read it, so that when you find yourself in a competing situation, you are already well informed about the process.
  10. Make sure that the agent knows you are interested and tell them that you wish to be kept informed if anyone makes an offer.
  11. Download and read the REA Guides about Buying and Selling property.
  12. Lastly, remember that the agent is employed by the Seller, so be nice and try and establish an open and friendly dialogue early on - a good relationship with an agent can be worth its weight in gold as you hunt for property and seek professional advice.

If you would like to talk things through, please feel free to contact any one of us, we'd be happy to help.

This week (March 23, 2021) the Labour government announced their plan to tackle the current housing issues in New Zealand. The policies focused on increasing the supply of houses, assisting first home buyers while at the same time slowing down demand from investors. People have been asking us how this could affect them here in the region, so we put together a summary for you with some links to information you might find helpful.

First home loan & grant

From Thursday, 1 April 2021, the income caps will increase and the house price caps will increase in targeted areas, including Nelson.

The income cap (maximum yearly income before tax) for a single person will increase from $85,000 to $95,000. For two people, it will increase from a combined maximum yearly income before tax of $130,000 to $150,000.

In Nelson and Tasman regions the house price cap will increase from $500,000 to $525,000 for an existing property and from $550,000 to $600,000 for a new property.

Check if you are eligible for a first home loan here: https://kaingaora.govt.nz/home-ownership/first-home-loan/check-you-are-eligible-for-first-home-loan/

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Extension of Bright Line Test to 10 years

The bright-line test means if you sell a residential property within a set period after acquiring it, you will be required to pay income tax on any profit made through the property increasing in value. The current bright-line period is 5 years. The Government has announced it intends to extend the bright-line period to 10 years for residential property except newly built houses (new builds) which will remain at 5 years. This does not include your family home or inherited property.

This change will be effective from Saturday, 27 March 2021 except for new builds acquired before this date.

We recommend getting in touch with the IRD directly with specific questions.

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Housing Acceleration Fund

The Housing Acceleration Fund aims to increase the supply of houses and improve affordability for home buyers and renters.

The key components of the Fund are:

The Government will also help Kāinga Ora to borrow an additional $2 billion to “assist in bringing a range of development forward through strategic land purchases”.

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Interest deductions on residential property

The Government is going to change the rules that allow property owners to claim interest on loans used for residential properties as an expense against their income from those properties. The legislation will apply from 1 October 2021.

Property investors will no longer be able to offset their interest expenses against their rental income when calculating their tax. Interest deductions on residential investment property acquired on or after 27 March 2021 will not be allowed from 1 October 2021. Interest on loans for properties acquired before 27 March 2021 can still be claimed as an expense. However, the amount someone can claim will be reduced over the next four income years until it is completely phased out by April 1, 2025. 

Property developers (who pay tax on the sale of property) will not be affected by this change. They will still be able to claim interest as an expense.

Again, we would recommend talking to the IRD with specific questions.

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Apprenticeship Boost Programme Extension

We have to mention the extension to the apprenticeship boost programme also to August 2022 meaning hopefully lots of new people entering the trades which in turn will assist in more properties being built.

For a full run down and more information you can go directly to the Labour website here: https://www.labour.org.nz/news-housing-2021-plan-faq

We hope this helps make a bit of sense of the announcements and what it might mean to you. Do get in touch if you want to have a chat to us about anything raised here or relating to real estate in general. We're always happy to help.

There are several different ways to buy or sell a house. If you’re new to the process  of selling or buying of haven’t experienced a particular kind of sale process before, the terminology can be confusing.

If you have any questions about the kind of the sale process that might be best for you or about how a property is being sold that you’re interested in buying please get in touch with us and we will be happy to explain it to you.

What is a tender process?

When a seller offers their property by tender this means that potential buyers prepare and submit confidential written offers for the property to the agent for the seller’s consideration.

There is no reserve price. This means that potential buyers don’t know the lowest price the seller is willing to accept. There may be a price guide, but buyers are able to offer less than this.

Marketing materials for a property must make it clear if the property can be sold before the tendercloses.

Prospective buyers can register their interest in a property with the agent and ask to be informed if someone else makes an offer before the tender date. They then have the option of making an offer too.

If you wish to submit a tender

Ask us for a copy of the tender documents. Read them carefully, including conditions or amended clauses. You will be asked to fill in a sale and purchase agreement and submit it before the close of the tender. Get your lawyer to check it before you sign.

A tender is a legally binding contract and you cannot simply change your mind after it has been signed. There will be a deadline for tenders to be submitted. Usually tenders are submitted at the real estate agency’s offices.

The sale and purchase agreement will include

What happens after the tender deadline?

The agent will provide all tenders to the seller. The seller considers the offers and the conditions they contain and decides which offer, if any, they want to accept. The seller can reject all the tenders.

What happens once a tender is accepted?

The buyer is now in a contract with the seller and can work through any conditions towards settlement.

What happens if a tender is rejected?

The prospective buyer (the tenderer) is free to pursue other purchase options. There is no legal obligation between the two parties.

The seller can seek to negotiate with any unsuccessful tenderer with the aim of reaching agreement on a sale/purchase. It is up to the tenderer if they wish to do this. This process is conducted via the agent if both parties wish to negotiate.

When you are buying a house it’s important to have all the information about a property so you can make the best decision possible. A LIM is a really useful document that you can help you in your decision making.

A LIM (Land Information Memorandum) is a report you order from the Council. It gives you all sorts of helpful information about a property, such as building consents, what the land has been previously used for, and its zoning.

If you’re looking at buying a property you should get a LIM and make your purchase conditional on being happy with what the LIM contains. We generally make one available for all of our listings.

LIMs aren’t the easiest of documents to read, and they can be really long. So here are our top tips for making sense of a LIM.

1 Make sure you’re reading a current LIM report

Sometimes the seller will have an old LIM report lying around and they might give it to you to read. By all means look at it but make sure you order an up-to-date LIM and read that too. LIMs get out of date very quickly. Don’t rely on an old LIM.

2 Read the summary pages at the start

Potential red flags can be pretty obvious from reading the summary pages. If you see anything that seems concerning, highlight it and tab the page with a post-it.

3 Read the main part of the LIM and make notes of things that concern you

Read over the main part of the LIM a couple of times. Check these things:

Remember to highlight anything that seems concerning to you.

4 Use what you know about the property to help you

Does the property have any of these features?

If yes, then you need to check that the property has the right permits and consents for these features. If there are any differences between the property and the features described on the LIM, have a chat to the Council and the vendor to try and get to the bottom of these differences.

5 Ask your lawyer to review the LIM for you

This is really important. Yes, paying a lawyer can be a pain, but for many of us buying a property will be our biggest investment, so now is not the time to scrimp on getting legal advice. Your lawyer will be able to talk to you about any of the issues you’ve highlighted as well as any other issues they notice. This will give you peace of mind that you’ve done your homework on the property.

And then.....

6 Consider the implications

You need to have a serious think about whether any problems highlighted by the LIM could affect the way you use and enjoy the property, and the value of the property down the track.

Understanding a cross lease can be reasonably technical and it’s important to take time to go through the details thoroughly and to seek advice if you’re not sure about anything.

Ownership of a cross-lease property means you own a share of the underlying land and lease flats (or houses) to yourself and other owners, usually for 999 years. A cross-lease plan is annexed to the certificate of title and is commonly referred to as the ‘Flats Plan’. This shows common areas and restricted areas, and delineates the area of each flat (or house).

The Common Areas

The common areas, for example a driveway, may be used by all owners by virtue of their joint ownership of the land (if marked as a common area on their lease). There will be a covenant that the common area is not to be used for any purpose other than access for vehicles and pedestrians.

The Restricted Areas

The restricted areas are intended to provide each owner with a private area for their use such as a courtyard or garden. The rights that the owner enjoys over the restricted area depend on the actual terms of the lease itself.

It is very important that a prospective purchaser search all the leases of the property in order to ascertain the full extent of all restricted areas.

The Flats

The area of each flat should be clearly delineated on the plan. A prospective purchaser should take the opportunity to compare the Flats Plan with the actual buildings on the property to ensure that there have been no additions, alterations, or demolitions which are not shown or recorded on the Flats Plan. The alterations or additions may encroach either on to the common area or on to a restricted area and the owner has no leasehold title to them. This is in breach of the lease if consent is not sought and the Flats Plan is altered.

Objecting to Title

If you are purchasing a cross-leased property you can object to title if the Flats Plan is defective. You are able to object to title subsequent to signing an agreement for sale and purchase, provided you do so within the correct timeframe.

If alterations or additions have been made to the flats so the exterior dimensions have changed, the vendor will be unable to give you a leasehold title to the alterations/additions and the title is defective.

In summary, a cross-lease title should be checked carefully to ensure there are restricted areas and common areas, and that the Flats Plan is correct. If you want to purchase a cross-leased property and there is a problem with the Flats Plan, you may be able to have the vendor rectify the issue and then proceed accordingly.

If you are unsure of anything seek advice from your lawyer. We are also happy to provide advice.

The multiple offer process is intended to provide all interested buyers with a fair opportunity to submit their best offer for a property they wish to purchase. Multiple offer processes can differ from agency to agency, but they can only be described as multiple offer when there is more than one offer in writing.

Each buyer should consider what they can do to make their offer attractive to the seller. The seller is not obliged or required to accept any offer. They may accept one offer, reject all offers, or choose to negotiate further with one party.

A multiple offer process can occur at almost any time there is more than one buyer seeking to make a written offer on a property.

When more than one buyer makes a written offer on a property there are specific things that must occur.

What do you need to know about the multiple offer process?

How can you give a multiple offer process your best shot?

If you are a buyer in a multiple offer process, you need to put your best offer forward. We recommend the following:

The purchasers of a property are legally entitled to one pre-settlement inspection before settlement date. The purpose of this inspection is to “examine the property, chattels, and fixtures which are included in the sale.” If any problems are found, and remedial work or compensation is required, the purchaser’s lawyer should request this before settlement day.

When you carry out a pre-settlement inspection, these are the general things to check:

Vacant possession

Have the previous occupants vacated the property? The vendor is required to give the purchaser vacant possession at settlement (unless the property is being sold tenanted).

General condition of property

Is the general condition of the property as it was when you agreed to purchase?

Chattels present and working

All chattels listed in the chattels list should be checked. While chattels need not necessarily be clean, they should be in working order.

Repairs or maintenance carried out as agreed?

If the vendor agreed to complete repairs or maintenance before settlement, check that these have been completed.

No new damage

It’s not uncommon for damage to be caused by the process of moving. Check there are no new holes in walls and doors, for example.

The vendor is required to leave the floor coverings, window coverings, light fittings, oven and all other chattels listed in your agreement (for example, dishwasher, rangehood, insinkerator, heated towel rails etc.) in the property on settlement. The current Agreement for Sale and Purchase provides that the chattels must be in reasonable working order on settlement. Although we ask all our vendors to give the home a really good clean, unfortunately the standard Agreement for Sale and Purchase does not provide that the property needs to be cleaned prior to settlement. This is often a bone of contention! You can however expect the cleanliness of the property to be at the same standard as when you signed the agreement and for the property to be left free of any rubbish.

Vendor disclosure

At the time of listing we ask the vendor to disclose

  1. Any chattels that are not working.
  2. Any chattels specifically excluded.
  3. Any defects, hazards, or problems with the property that are known to them including leaks and/or weather-tightness issues (and supply relevant documentation).
  4. If they have obtained an insulation loan from the local council.
  5. Any work done to the property by the vendor and/or any pending works.
  6. Any consents or waivers known, consented, or signed by the vendor for neighbouring properties.

Based on the vendor’s answers to these questions we insert additional clauses in the 'Further Terms of Sale' on the Sales and Purchase Agreement.

We will share what we know about a property with potential purchasers in an open, honest and transparent way.

© 2021 Susa Guhl Partners. MyPlace Realty Ltd Licensed REAA (2008). All Rights Reserved.