The Auckland market had 3,031 listings for sale in the month of July which represents a 2% decline compared to June (3,092 listings). Realestate.co.nz reports that “New listings are in short supply, not just in the major cities but right around the country. Matched to this and as a function of this and the upturn in sales, the level of inventory of unsold property on the market is edging down nationally below the long term average. This low level of supply, if not met by a rise in supply in the short term, could result in…price pressure upwards”

We’ve already noticed this price pressure being created through continued competitive bidding through our winter auctions and in July we sold 90%* of our auctions. Over the last 3 months our  auction success percentage has been 90%* of all auctions offered.

Some other interesting activity with Mortgage Rates. The ASB moved early last week and hiked its one year rate is up 20 basis points to 6.15%, its 18 month rate up 40 points and two year rates up 25 points. Conversely Bank Direct leads the market with a 5.90% 1 year loan. It will be interesting to see how the other banks react.

It will be also interesting to see if the OCR get’s hiked this week. A recent article has been written presenting an interesting counter-view to hiking the OCR. Click here to read it

The Latest Real Estate Overview from the BNZ included the Confidence survey. Here are some interesting comments on the Market from Real Estate Agents:

   “Lack of new listings. Multi-offers are now common. Relatively good sales volume considering its Winter”

   “Good demand for the right property. Shortage of listings”

   “Supply and Demand. We have people wanting to buy but not many people want to sell at this time. Interesting

    Times. Maybe people are still waiting ‘till Spring when gardens look nice but would be great to get on the market

    Now when supply is so low.”   

 Thanks for reading and we look forward to touching base with you again soon.

*Note: These are properties which sell prior to, at, and post auction.

In a winter market there certainly are a lot less active buyers in the market and that’s a good thing for you, if you are seriously considering buying a home. Winter buyers have the advantage of less traffic through open homes which means less competition & a better chance to to ask agents more questions and better questions about the property, and market in general. A good tip from me – in addition to the ones I made in my Open Homes Article:

-          Start forming a working relationship with an agent you trust.

Why?

Sure you can find suitable properties on the web in a few clicks but what about the property that’s coming to market in a few weeks, but in the meantime agents who know it’s coming to the market, will be showing their prospective buyer through. Do you want to know about a property before someone else does? Absolutely! So when you are out on your open homes take the opportunity to check out the agents as well as the houses.

When you find an agent you trust;

1)  Ask them to keep you informed of what’s coming on the market.

2) Stay top of mind for them. Make a time to ring them at the same time each week, and ask them   what they have seen.

3) Give them good information about what you looking for:

- Number of bedrooms you are looking for

- Suburbs

- Price range you are looking in

- The top 3 things the house must have, that you want/need. E.g. double garaging, 2 bathrooms etc

In summary, it is a good time to buy during the winter market. Just be aware that fewer properties are available over the winter period. So you have some accurate information on the supply of listings during winter, nationally the average number of houses sold in the month of June over the last 3 years was 4973 (source realestate.co.nz). There are still plenty of opportunities to find the right home, for those that are actively looking. Happy hunting!

http://youtu.be/rF1JC6j95mo

Have any questions about the market. Get in touch with us here:

http://clearrealty.com/blog/contact-us-2/

In my post today, I want to focus on two particular issues.

1)    Getting Earthquake insurance

2)    Having a plan when an earthquake strikes

This really means “Do you have insurance?”  New Zealand is very fortunate because we have The Earthquake Commission (EQC) http://www.eqc.govt.nz/  which essentially means we get up to $100,000 cover for our home and up to $20,000 cover for our home contents; provided by the EQC, before our private insurance kicks in. The only catch is that you need to have private insurance in order to qualify for this cover from the EQC. If you don’t have any insurance please get some.

Do you have an Earthquake disaster plan?

Yeah yeah, it may sound like I am on the bandwagon here, but a friend asked me this yesterday, and quite frankly I don’t, and it concerned me. So here’s a couple of compelling reasons why I am going home tonight and organising one.

1)    In all likelihood, our ability to communicate with one another would be hampered, and at the worst-case scenario compromised

Solution:  Have a meeting place planned for the family. Whilst in a sparse city like Auckland, there could be logistical issues. Never-the-less a plan is a good start, and it gets you and your family on the right page.

2)    You don’t know how long you are on your own for

Solution: The “Get Thru”website recommends 3 days rations, but I would almost say a weeks’ worth may be better.  If the big one hits, you just don’t know how alone you’ll be or for how long…..

All doom and gloom aside, check out the “Get Thru”  government website.  There’s a heap of practical tips and checklists to help you and your family prepare for an Earthquake.

If you also wish to make a donation, check out Red Cross website: www.redcross.org.nz

100% of donations will reach the people that need them.

Questions for those considering buying a unit

1)      Is there a Body Corporate?

This is a valid question as there may be some sort of body corporate in operation on the property. Typically there is more likely to be a body corporate in place when a unit has a Strata title. You may also find that some units have an “informal” body corporate where some costs are shared, e.g. each unit holder pitches in for lawn mowing. In any case this is a good question to ask, as you’ll be able to find out if there are any further costs in addition to rates, electricity, and water costs

2)      Does the unit have a separate water meter?

While on the subject of water, it’s a good opportunity to ask the agent whether the property has its own water metre. It’s important to know (especially if you are considering buying in a complex with multiple units) because you can potentially have less control over your water bill if the meter is common or shared.

3)      Is the land common area or exclusive

I have touched on the differences between freehold and crosslease in a previous post and it’s really important to get a handle on whether there is land which is denoted (on the title) for your exclusive use or whether the land is common use, and therefore not exclusive to the property. Sometimes you may find that where a unit is on a title with common areas, that the owners come to an arrangement on “exclusive use”. Rather than the title being amended to reflect this, they enter into a de-facto arrangement about who cares for what and what belongs to who. I must stress its informal in nature and typically the land in question is immediately adjoining the unit title. This is often an unwritten agreement between unit owners as the alternative involves a new title and re-surveying; both of which involve cost.

4)      Are Carparks/Carports/Garages denoted on the title?

I also refer to this for a couple of reasons:

a)      If a carport/garage is not attached to the unit, but not on the title, It is likely that it has been erected without an addendum to the title or flats plan. This can have implications for the future property owner down the road.

b)      Often in a on a cross lease title the carport/garage are denoted on the front page of the title and have their own DP number assigned to them. If you can’t see a denoted carport/garage on the title then it’s likely to be consented, but not updated on the title, or just simply unconsented.

That’s all for today – As always I welcome your questions & comments

Andrew

One question I sometimes get from buyers is “Do I have to pay for a LIM report?”

Why would someone ask this question? Well when you go to the council website and order an urgent LIM, this costs you $340 inc GST (at time of writing) and is delivered within 4 business hours (via email) or you can order a non-urgent LIM which costs $260 and takes up to 10 working days to deliver. You don’t have to look too hard to figure out that most people are compelled to pay more because of the length of time it takes to deliver a non-urgent LIM report.

So unless a vendor has a recent LIM to supply to you or unless they are willing to get one for you, you will have to consider stumping up for a LIM report. (A hint of caution if you’re going to ask the Vendor to supply you with a LIM report; apart from the fact it’s not a widely accepted practice, if you are supplied a LIM report you by a 3^rd party and you haven’t paid for it then there is no comeback for you if Council omits important information from the LIM, which would have affected your purchase of the property (i.e. you wouldn’t have purchased it). Not trying to get too much into legal/technical jargon, just want you to be aware of the implications of your decisions.

What are the alternative(s) to a LIM report?

Option 1)

Making the trip into council yourself

You can go into council (using example of Auckland City Council here) and view the property file, which costs approximately $16 to view the file and then a $1 per page to for photocopying (at time of writing). So all up, you could be looking at a total cost of $40-$80 for costs depending on what’s on the property file. That’s a potential saving of at least $260 for the information you need.

Tip 1 – If you are going to do this, then let’s make things a bit easier for you. If you have access to a LIM then take this with you (doesn’t matter if it’s not for the property itself) as we’re going to use this as a reference document so we know what we need to get from the property file. See if you can ask a friend or family member if they have an LIM that’s 2-3 years old. Or give your friendly Real Estate agent a call and see if that have a sample one on file they can send to you.

Tip 2 – Ask the helpdesk people at council what you should be looking for. They do this everyday for people, so leverage from their wisdom/experience.

Tip 3 – Give your lawyer a call and ask him/her what information you should be getting from council. From a legal perspective this make sure you are getting pertinent information which your lawyer can & should review on your behalf.

Option 2)

Ordering the property file CD from council

You can order a CD of the property file from council and have this sent to you. The cost for this ranges from $60 – $80. This cost range takes into variable on whether you are ordering online, going into Council and whether the CD is being sent out to you urgently or not.

Two very crucial points I need to make

1)      Unless you know what you are looking for on a LIM, then the safest option is to pay the money and get the LIM report from council.

2)      Make sure once you have got the information, that your lawyer has the opportunity to give you a professional legal opinion on the LIM/information you gather from council. I can’t emphasise enough, the importance of professional advice for such an important event in your life!

I hope that’s given you some food for thought on LIM reports and other options for obtaining property information.

Thanks,

Andrew

How has the training changed?

Under the previous guidelines, you could complete your training in under a month and you then were able to apply for a Salesperson’s licence from the REINZ, so that you could legally become a real estate agent.

Under the REAA changes there now is a more robust process in place for gaining a salesperson’s licence, and you now must apply to the Real Estate Agents Authority for a licence. Now when you are entering the industry you must complete the equivalent of 3 months training via a unit standard method. What this means is that the aspiring salesperson now must complete their requirements in a slightly different fashion.

The new course

The new Salesperson’s course is worth 47 credits, and this is broken down into 11 unit standard-based courses. The “prescribed” learning time is 10 hours per credit, but the early feedback we are getting from people taking the course is that the time it takes to complete each credit can be up to half of the “prescribed” learning time, if the individual is organised and focussed.

Training providers

There are three main training providers offering the Salesperson’s certificate course.

Open Polytechnic – The Open Polytechnic offers the course through distance learning although you can sign up for workshop days if you would like classroom time to complete the course.

Unitec – Offers  the course over a 12 week period, and includes 6 weeks of classroom training by as the website says “Lecturers who are qualified professionals with years of industry experience.” The other 6 weeks can be spent in “self directed study” and towards the completion of assignments. Unitec is partnering with a number of agencies to help new people complete their papers.  We had a number of Unitec students who came to our Royal Oak office last week to learn how to complete a Comparative Market Analysis (CMA) of a property.

Real ITO – With the Real ITO course, all training is completed within the agency environment and a pre-requisite of the course is that the individual studying is done with an agency and the prospective salesperson must have a contract with the agency to take advantage of a REAL ITO scheme. Real ITO have own in-house assessors for the program and a trainer which you have access to and support for the duration of the course.

Our observations so far

As a company we’re pretty impressed with the structure of the new course and also the initiatives that have been put in place by both the training providers & Real Estate Industry. We feel that the public are getting a better quality agent serving them after the completion of the course. We especially believe that incorporating time at an agency as part of education is a progressive step for teaching students the day-to-day running of an office plus it familiarises them with the practical applications of what they are learning. This will make salespeople more effective from day 1 and is good news for consumers, as it will no-doubt lift the standard of competency in the industry.

So what do you need to do, to call the relationship off?

Understanding the agreement between you and your sole agency.

It’s really important to understand what you agree to at the start of the listing, and also what you have agreed to in writing with your agent.  In almost all cases it’s likely that you have a 90 day sole agency agreement with your agent & the agency they work with. This means that for 90 days, your elected agent can market the property without any other agencies marketing the property at the same time. (Please note –agents will still do conjunctional sales with other agents from other companies. This means that if another agency has the right buyer for your home, they will come to an agreement on splitting the fee for service as opposed to you, the vendor being charged twice. I thought it was important to mention this).

If you elect to withdraw your property from the market (which is quite a valid thing too, whatever the reason) then the agency you are dealing with, should co-operate  fully with you in a professional manner. If you are re-listing your property with another agency (and you haven’t completed the period of agency) then you will need to wait to re-list the property.

For clarification on your sole agency period, refer to the listing authority which would have been left with you by the agent (This is a mandatory requirement under the new Real Estate Agent Authority guidelines.) You should also have been left a copy, of the NZ Residential Property Agency Agreements Guide which you can find here

Talking with your agent

It is very important to talk with your agent if you plan to take your property off the market, or plan to list your home with another agency.

If you are in the unfortunate situation of being unhappy with your agent’s performance, then I’d recommend discussing it with the agent, and if you feel it necessary, involving the branch manager. If the agent has missed the mark, it is important to have the feedback if they haven’t performed to expectations in your (the client’s) eyes. Most companies will have a complaints process to resolve any unfortunate situation that means an unsatisfied vendor.

The change-over period between agencies

In most agency agreements, there is a general marketing agency period stipulated after the exclusive marketing period. This will usually appear in an agreement with similar text to below”

“We hereby appoint you as general selling agent for the property on the terms and conditions contained herein. This agreement shall commence immediately and continue until cancelled by notice in writing which shall be effective no earlier than midnight on the 7^th working date from the date of service of such notice to us” (Please note I have put the 7 in for the number of working days, as this is what you’d typically find an agent will put in for a notice period).

Either you or your new agent can give notice for this period, and typically the new agent will begin marketing your home after this period has been observed.

Pitfalls to avoid when changing agents

When changing agents, you’ll often find that the original agency marketing your home will “lay claim” to previous buyers that have been through the property, if the situation arises where they purchase the property after the original agent’s 90 period of sole agency. Often this claim will come in the form of a letter which should be sent to you prior to the next agency commencing. This letter should highlight the names of groups which have been through the property and whom the original agency is still working with, to effect a sale.

It is really important that you arrange an exemption for these buyers with your new agent/agency you are working with. The reason this is so important, is that you don’t want to be having to pay two commissions if the buyer returns to the property and ends up purchasing it. (If there is a disagreement between the agencies, then in the majority of cases this will be resolved between the two parties, but as the vendor you should never leave yourself in a position where you could be had up for 2 commissions instead of one.

I hope that gives you an overview of the process of changing agencies. My recommendation as always is talk to your agent(s) to ensure you fully understand the process of removing a property from the market and/or changing agencies. Agents are professional in nature & if they are accorded that courtesy, they will live up to expectations, and ultmately it will be a “good break-up”.

Look forward to your comments

Andrew Simich

So how do you find a building inspector?

Typically many people will use a building inspector who they have been recommended, will search for one online or via the yellow pages. In either case it’s really important that you can be sure the builder has a sound understanding of construction, and is the type of builder that can answer all your questions. I have purposely underlined this point and will come back to this later.

The key to choosing a builder inspector comes down to a number of key points:

1)      What experience does the builder have?

Having an intimate knowledge of building practices is a great plus for any building inspector. The reason for this is that they will be able to discuss the construction of the home with you, typical defects you may get with the style of building, and the inspector should be able to pin-point any ongoing maintenance required and share this with you so as the new owner you are aware this, and can follow the builder’s advice.

2)      Is the building inspector, still building homes or active in the building industry?

It is worth considering whether its important to you that your building inspector still builds houses themselves or is up to play on the latest council regulation or changes/amendments to legislation. The danger you face is coming across a builder who cannot give you detailed nor accurate advice and therefore does not give you a detailed enough building report to make the right types of decisions. Don’t be afraid to ask a building inspector what type of building background they have and what they offer you which is different to our inspection firms out there. You’re the paying client, so don’t be afraid to ask questions and know what you are paying for.

3)      Does the building inspector provide a written building report & if so how much

Seriously consider avoiding a building inspector who does not offer you the option of a written building report. If a builder won’t put it in writing when how sure can you be about what he/she is saying? A written building report does cost more than a verbal building report but is worthwhile as in many cases the building inspector will take photos of anything he/she feels need to be brought to your attention, and you are also able to pour over the information in greater detail.

4)      Does the building inspector provide quotes for repair work in their report?

This is a really important question for the building inspector. Any good building inspector worth his/her salt should be able to provide you with costings for repair work. Most building inspectors can identify issues with a property. It’s the really good inspectors that can advise you of the cost of repair and the feasibility of those repairs.

I highlighted this point earlier, because many of our purchaser’s we deal with love the fact that the building inspectors we suggest are positive, enthusiastic and solutions orientated. They will identify any issue, report back to the client and quote for the work to be done (thereby giving the client both a remedy and a cost for the work.) If a building inspector can’t do that for you, then what are you paying him/her for?

As always we welcome your questions and feedback. Feel free to contact us here if you would need a building inspector to look after you. We’re happy to give you a list of names that come recommended from our purchasers.

Andrew Simich