Buying a House in New Zealand
5. Closing dates
This was possibly the biggest shocker for us. As opposed to the normal sort of US 60-90 day escrow, houses here often go from first listing to move-in in under a month. You’re given a week or two for the inspections and a week or two to finalize financing, and then it’s yours. We didn’t even have time to find a bed! In our case the house was empty, so it might be possible if you need longer to negotiate it with a seller that needs time to move, but if you are in a hurry, you can typically move in quite quickly. Of course, you don’t want to wait too long when you’ve already paid the seller 10% upfront. This also means that having pre-approved financing is essential to being able to successfully bid for the property you want.6. Last note for the foreigner
Although we were not affected, you want to be aware that while foreigners can buy most properties, there are laws here to prohibit foreigners from buying certain “heritage” properties. Farmland and any property that adjoins a body of water or DOC (government) owned open spaces could have restrictions. You will be required to get permanent residency status or possibly even citizenship before buying such sites. Of course, if you’re really rich you might be able to get around that. Shania Twain was able to buy property next to DOC land by agreeing to help build a public walking track across her massive estate. Others have had to let their dream home go.Conclusion
We love our house and we feel we got a fair deal. We aren’t thrilled with our lender and wish we had been more careful with our loan. The main challenge for us was not realizing the types of questions we should have been asking, even after talking to other Americans who had bought property here. If, however, you spend time reading about the process and the potential pitfalls, you should be able to make an informed purchase decision.Resources
- Consumer.org is much like Consumer Reports in the US and is worth joining. You can join online on a quarterly basis for a reasonable cost and it’s an invaluable resource as you begin to buy appliances and furnishings for your new home. They also address a variety of services.
- Interest.co.nz is another great resource in your house hunt for evaluating a lender.
- Tip for AAA members- AA New Zealand honors your years of US membership, and gives quite favorable rates on homeowners insurance to long time members. We found their coverage to be more comprehensive and have fewer restrictions in many areas as well.
- NZ has a few “HelpUSell” type agencies, such as Green Door that are also worth keeping an eye on. Lower commissions should mean lower prices.
- If you are thinking of buying a NZ property for investment, the Property Talk site might have some useful information.
- We did not participate in any auctions, and if you do, you will want to prepare yourself thoroughly because they are unconditional once final.
This article was written on Thursday, January 8th, 2009 and is filed under Mastering Skills.
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on April 10, 2009 at 4:49 am Paul wrote:
Thanks for the article, good to hear how buyiing a house differs from the USA.
Sounds like you could have had a better agent that covered the basics. Unfortunately they are rare now days as most are just in for the quick buck then move on…
The purchase date is normally flexible as is the right to split the costs or ask the seller toput right any fualts found via the inspection. BUT you need them in the contract first! You can try later but a lot harder.
We have brought a few homes in NZ, most have been easy, all had the subject to inspection clause, a few needed work that the seller sorted as they would have lost the sale otherwise :-)
Yes the banks have a frinedly face but it can be unclear to what fees , charges “MAY ” be impossed. In one case we needed to sale quickly to avoid a squeeze in income due to moving from a regular job to self empolyed. We took the responsible step of down grading house quickly to cope as the new bussiness started to grow.
The bank decided to enforce its early repayment fees of $3500NZD with disregard to the fact that we were refinancing with them on the smaller house……….. At the time that was 6 months of payments!
Have fun in Nelson, it is a magic spot that we hope to move to after a few more years of our OE
on April 11, 2009 at 10:05 pm BeeZed wrote:
Thanks Paul for your thoughts. I think the agent was as helpful to us as he rightly could be, while representing his clients, the sellers. Great idea to be clear in the contract that changes might be made based on the inspection! We are enjoying Nelson!