Being a first home buyer in New Zealand is incredibly daunting. The market is now more difficult to enter than it has ever been, especially with the new LVR limits imposed on banks. We are pretty lucky though, it is still a lot easier for first home buyers here to break into the market than most other countries. On this page I want to give you a quick run-down of the various things that people need to consider when purchasing a property.
Finances
This is one of the main things that will need to be thought about for a first home buyer (or any buyer for that matter). Without finances in place, you will never be able to secure the property of your dreams! The problem is, very few banks are willing to lend to first home buyers without a decent deposit. There are of course a multitude of reasons for this. Banks are in business to make money and they have rules around the amount of risk they are willing to take on. There is also the worry that someone without proper financial backing isn’t going to have lines of credit available that shows that they are able to handle repayments for something as big as a mortgage. Thankfully in New Zealand, there are a couple schemes that may be able to help you out. If you have been part of the KiwiSaver scheme for at least five years then you will be able to apply for assistance to help you with your deposit or even to withdraw some of your savings to make a contribution to the purchase of the property. In addition to this, there is also the ‘Welcome Home’ scheme which is designed for those that are attempting to purchase their first property but have very little money in the way of a deposit or cannot afford a deposit at all (but can keep up with the loan repayments).
Remember, budgeting is so much more than the mortgage though. You will also need to think about any extra charges on the property. For example the property rates, cost of repairs, etc.
Finding the Property
Finding the right property is perhaps one of the most troublesome things that a first home buyer is going to face. A good suggestion would be to make up a list of what you need and want in a property right at the beginning. This will give you clear direction of the type of property that you want. It is also a good idea to work with a real estate agent to find the perfect home. You may also want to give sites like RealEstate.co.nz or TradeMe Property a browse. They contain a plethora of homes listed all over the country.
Purchasing the Property
Eventually, first home buyers are going to end up finding the property of their dreams. This is brilliant, although it isn’t quite yours yet. You will need to make an offer! The way in which you make your offer will of course depend on how the property is being sold. If it is being sold by a real estate agent then go to them. If it is being sold by a private seller then approach them. I am going to let you in on a little secret here (or is it a well known secret?). Most sellers are willing to budge on the asking price a little. It may just be a few thousand dollars but every little bit is going to help. So don’t be afraid to ask. The worst they can say is no. If possible, try to find out if the property has been on the market for a while. If it has then they may be willing to budge even more!
Remember, if you want the process to be as smooth as possible as a first home buyer then you will want to ensure that you carry out as much research as possible. Sure, a real estate agent will be able to help you with the process somewhat, but the more you know, the more successful you will be when it comes to making the sale. Thankfully for you, there is plenty of information out there that you can dive into! Soon, Real Estate HQ will be a collection of a whole bunch of information that you can refer to as and when you need it!
