The Top 5 Residential Property Buying Mistakes in New Zealand and How to Avoid Them

Signing the agreement too soon

Be careful as it is easy to get caught up in the excitement of putting in an offer and then forgetting to do your homework. Often there will always be a time pressure element that will force you to act swiftly. You will find it very difficult to change an agreement after you have signed it.  We understand the need for a quick turnaround. Please refer to our due diligence page and how we can help you review all the legal documents before you consider signing the agreement.

Be aware of who is on your side

Remember to be careful about who has your best interests at heart. Real estate agents can be helpful however they act for the vendor and their goal is to get the best price for the vendor. Your lawyer acts for you only. Sometimes you may be pressured into providing certain information but you are under no obligation to tell the real estate anything. Remember, buying a property is a negotiation and you are allowed to have some fun when haggling with the agent and vendor.

Make sure you understand what you are buying

In New Zealand, there are several different types of record of title - fee simple (freehold), leasehold, cross lease and unit title. Each type of record of title has its advantages and disadvantages so it is very important to fully understand them and to do your due diligence before you commit to purchasing a property. Most titles will have registered interests on them which further impact your ability to use the property as you intend. Please contact us for a no obligations free initial chat so we can provide you with a high-level summary of what you are intending to purchase.

Podcast - The 4 CoreTitle-types in the NZ Property Market

Leaving yourself exposed due to having insufficient conditions

When undertaking due diligence, you will need to consider what matters you wish to investigate further. For a buyer, it is best to insert a wide due diligence clause however, sometimes, to make your offer more appealing to the vendor, you may need to specific exactly what you want to investigate further e.g. obtaining sufficient finance or receiving a builder’s report. Be careful because you cannot use a finance condition to cancel the agreement because you suddenly do not like the kitchen or backyard.

Everything for buying and selling property is controlled by a timeline of events. In relation to conditions, this means who will do what by when. It is important to familiarize yourself with any deadlines e.g. some conditions will be deemed to be satisfied if you do not provide notice to the vendor. This removes an element of control from your hands and as such it is important you work with your lawyer to put any conditions in both of your diaries. Once you satisfy your conditions, normally an agreement will become unconditional and you will become obligated to buy the property.

Podcast 10 Conditional Clauses You Need to Know About

FOMO

Fear of missing out is contagious and rampant in the property industry. Even if you do all the right things: you go along to the open home, you get the title reviewed, you get a building report, you befriend the real estate agent, you make a pre-auction offer, you go to the auction early - and for all your efforts - you get blown out of the water by a couple of hundred thousand dollars.  You then repeat the process over and over again. Your weekends revolve around open homes instead of friends and family. You try to stay patient but everyone else has bought a house, so what do you do? If you are on the edge of being pushed to the limit, ask yourself “Will buying this property keep me awake at night?”.  If the answer is “Yes” then it is a good indication you should let this one slide. Remember, as frustrating as it is, there will always be another open home. If you can stay patient, your odds of finding the right home will increase.

‍