Wednesday, 23 November 2011

When one door closes...

Buying a house in New Zealand is interesting to say the least, compared to the UK.

For a start, there is the phenomenon known as the Open Home (I am aware that they are prevalent in the States, too, but not at all in the UK). This is where sellers throw open the doors of their houses for half an hour to an hour, usually on a Sunday afternoon, and allow people to look round. Usually the sellers are not on the scene, but your local friendly estate agent is there to greet you - you look round on your own, rather than having the 'here is the kitchen, here is the bathroom' experience. These open homes are advertised in various property press magazines, and on a good day, you can daisy chain five or six of these together. Whilst the agents also hand out little pamphlets on the houses, a notebook is essential to keep track of the salient points of each house and to stop them all blurring into one big property by the end of the day. (I have filled up over half a notebook, one page to a property, with the houses we've looked round since early September!)

Estate agents do also show you round properties, but most of them seem to focus on the open homes as their way of getting many people through the door for less effort on their part.

Then there is the process to actually buy the house. In NZ, your offer is made as part of the contract, which means that, once you have negotiated the price and any conditions (usually checking council documents, building inspection and arranging finance, though you do also usually go into the offer with a pre-approval on your finance, so this is a case of sorting out the paperwork and getting a valuation on the property if required), it is a binding contract. You then have a set period to fulfil those conditions, usually five to ten days. If you confirm to your solicitor that you are satisfied in those conditions by the end of that time period, then the contract goes unconditional, and you pay your deposit (which you then lose if you end up pulling out of the contract for any reason). Then, on the agreed settlement date, you pay the balance (or get the bank to transfer the money to the solicitor - for some reason they won't even let it touch my bank account...) and take vacant possession (unless you are buying the house for renting, in which case you may opt to keep the tenants). Then you get to move in!

We've managed to go through a couple of interesting variations to this process whilst house hunting.

The first house that we looked at was owned by a lady who had put her house on the market because she'd seen another further up the coast that she wanted to buy. Unfortunately, she hadn't put an offer in on it, and by the time we put our offer in (three days after it had gone on the market), the house she had fallen in love with had sold. Rightly or wrongly, the estate agents persuaded her to go ahead with the sale anyway, and she signed the contract, inserting a clause that stated that she had to put a conditional offer in on another property in ten business days before we could go unconditional. However, over the next two weeks, she had a change of heart (possibly pushed by her teenage son, who wasn't as keen on moving as his mum was...), and ended up not putting in an offer. We had a suspicion that something was going wrong when, five days before the deadline, she was still quibbling over the property that she was interested in, concerned that it was in an earthquake zone and at risk of liquefaction. Given that her current place was just two streets away from the main Upper Hutt fault line, we couldn't really see what the fuss was about. But, she failed to meet her condition, which meant that our contract was void, and she took her property off the market. All very disappointing, particularly as I'd already relandscaped the garden in my mind...

That was on the Wednesday. Our estate agent doesn't work on a Thursday, but on the Friday, he took us round three properties, two of which we liked, one of those very much (great location, recently refurbished inside, small but usable garden, large enough for our book collection *and* guests - it ticked all the right boxes). On the Saturday, the agent called us to say that someone else was putting in an offer on the house that we really liked, and did we also want to put in an offer? At that point, we said that we would wait until we'd been round the open homes on the Sunday as we didn't want to tie ourselves down and miss out on other properties (there was at least one other which I was very interested in from the internet details). After the open homes, the one from Friday was still our favourite, so we asked the agent whether it was still possible for us to put in an offer. He said yes, and came round that evening with the paperwork.

Because we were now in a multiple bid situation, we now hit something slightly new again compared to the UK process for buying a house. We had to put forward our best and final offer, which would be presented to the seller in a sealed envelope. The seller would then open the two offers, and choose the best one to proceed to contract with - no playing each buyer off against the other to get the highest price (and therefore no gazumping, either).

On Monday evening, as I got in from work, I had a call from the agent to say that our bid was the preferred, and, because we hadn't had anything tricky in the conditions we wanted to put forward, they were proceeding straight to signing the contract, which would be lodged with the solicitors in the morning.

So - slight panic mode, as we had five days down for our conditions. I called up the builder who we had already contacted as part of the work we had done on the previous property. He had space available on the Tuesday, as someone else had cancelled, and so I took a half day off work to be able to go up to the property to receive the verbal report (the written one followed over email in the evening). There were a couple of issues, but nothing major, and we were able to use those to get a slight discount on the property price.

On the Wednesday, the valuer went round to appraise the house - his report came through on the Friday, and by some strange coincidence, it was exactly the same amount as we had offered for it... We were then left hanging over the weekend to find out whether the bank was going to approve the mortgage - we already had the pre approval, but needed them to give us the go ahead on this particular property. We had to have everything sorted out by the Monday evening to meet our five day deadline...

The bank kept us hanging on until almost the last minute - with 50 minutes to go on the Monday, they approved the finance, but we still then had to get the documents over to the solicitors and then wait for them to tell us that we could pay the deposit to the estate agents. We were able to go unconditional just after 5.00 on the Monday - a week and a day after sitting down with the estate agent to put in our offer.

We now have two weeks to get ourselves ready and to formalise the mortgage paperwork before we complete the contract on the 8th December - from viewing the house to moving in will have been four weeks. Quite a bit to do, particularly given that we have two Sci-Fi social events this Saturday, plus an orchestra concert next Saturday. But I'm starting to work through the tick list - ordered the removal van and handed in our notice on our rented house today... Calm, orderly, and I'll try not to panic at all!


Wisewebwoman said...

Congrats! Congrats!Congrats!
Wonderful news Jo, I am sure you are over the moon with excitement, quite an accomplishment after only 2 years in a new country!
Similar to Canadian open houses, except bidding wars are allowed to take place (I benefited from this as a vendor, though don't necessarily think it a good thing as a purchaser!).
dying to see the pics.
You are going to be one busy lady!


Strabec said...

Actually the NZ system doesn't seem too different to the Scotland which also has a sealed bid system.
I am looking forward to seeing the photos too once their up!