Guide to Buying Property and Real Estate in New Zealand
Overview
Buying a property
in New Zealand can be both rewarding on a personal level as well as an investment
level so long as you follow some basic rules. The legal process is not complicated
but it there to protect everyone so please read on below and do not hesitate to
contact us should you require any further details.
Purchasing Procedure - Sourcing Suitable Properties
Our agents negotiate the best possible set price with the developer for our clients
on properties which meet our strict criteria. This ensures that our clients are
offered below market or at market property prices. These are then offered first
to our members (ie you) via our newsletters and property updates.
Reservation
If you are interested in a property most agents have the ability to reserve it for
three days with no obligation to invest. This effectively takes the property off
the market while a decision is made on continuing the purchasing process.
We understand that the three day period is necessary for us to make contact with
you to talk through further details about the investment choice you are making.
Being an overseas investor this time is essential for you feel comfortable and confident
with your investment and understand the process from here on out.
Sales and Purchasing Agreements and Due Diligence
When a decision has been made to proceed with the purchase of a property your agent
will take you through the purchasing contracts called a Sales and Purchase Agreement
in NZ. The contracts are sent to you for review and signing, and then sent back
to be counter signed by the vendor.
For your piece of mind all of our contracts carry a clause stating that for what
ever reason you can terminate the agreements within 10 business days, with no obligations.
This stage of the process is known as due diligence. At this stage your New Zealand
lawyer reviews all documents. Whilst this is taking place you may also need to liaise
with a New Zealand mortgage
consultant to discuss financing options for the settlement of the property
Deposits
At the end of the 10 business days due diligence period, your lawyer will confirm
that you wish to proceed. You are then required to pay the necessary deposit which
is usually 10% of the purchase price of the property. The remaining transaction
payment is required at settlement or upon completion of the property.
It’s important to note that in New Zealand deposit monies never go to the
vendor or developer until completion/settlement of the property. All monies are
held in a Trust account and at no stage can a developer access this money until
settlement. It provides piece of mind for purchasers knowing that their money is
safe and secure during the build process. If for whatever reason the development
does not get completed the 10% deposit monies are returned to the purchaser.
Construction and Settlement
During the construction of you investment our agents will keep you updated with
photos and commentary.
If you are looking to source financing in New Zealand or by Multi-currency lending,
three months before completion of the property our Mortgage Consultant will initiate
financing process with you.
Around two months before completion we will put you in contact with a local property
management group who will look after your investment and find suitable tenants.
Upon completion we can organize an independent building inspector to view your property
and give you feedback. Once everything is satisfied and all requirements have been
met, you pay the remainder of the contract price and your new New Zealand investment
is all yours.
Our agents in New Zealand have these steps and systems in place to make sure all
clients are happy and confident with their purchase decision before they make their
final commitment.
The following expenses are incurred when purchasing a property in New Zealand:
- >Legal Fees - $1,300NZD
Valuation on completion - $450NZD
- Building report - $350NZD
-
Total costs - $2,100NZD
It is important to note that when purchasing property in New Zealand there are no associated
stamp duty or mortgage broking fees - if using a New Zealand bank loan.
These costs are seen as relatively cheap when compared with many other countries
and should be seen as a major cost benefit when purchasing an investment property in New Zealand.
Buying property requires New Zealand legal representation. Employing a lawyer who's
experienced in all facets of New Zealand property law brings confidence to any buying
process.
Our agents in NZ understand that many overseas clients don't have access to a lawyer
in New Zealand, so we have established relationships with several leading lawyers
who understand your needs and concerns as an overseas property investor.
Lawyers associated with our agents offer independent advice on all aspects of property
purchasing, ownership structures and associated issues. You will have the opportunity
to have face-to-face, phone and/or email meetings with the lawyer of your choice.
One of the most critical parts of transferring ownership of property is the conveyancing.
This process includes such things as checking land boundaries, ownership, zoning,
and that all renovations or extensions have council building approval. Our lawyers
will review and prepare the agreement of sale and purchase prior to signing, along
with all the other legal documentation associated with the purchase.
This provides further confidence in knowing the contracts have professionaly reviewed
and amendments have been made for the purchasers benefit.
Data courtesy of NZ Property Solutions
Mortgage Options
Contact us for specific details Click the above link to receive a quotation
on mortgage facilities from over 8,500 UK providers or a select number of overseas
banks and mortgage facilitators.
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