Home Buyer’s
and Seller’s Guide
Home Buyer’s and Seller’s Guide
Westpac
The content of this guide is general in nature and is not intended to constitute financial or legal advice. All opinions,
statements and analyses expressed are based on information and laws current at the time of writing and from
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described may vary from time to time. Other service prices may apply. For full details please refer to our price list
brochure which can be obtained at any Westpac branch in New Zealand free of charge.
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details of the terms, conditions and exclusions for these insurances can be found in their relevant policy documents.
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Westpac New Zealand Limited
12379WT-1 01-09
Some things you need to know to make buying
and selling easier, and to help you get a great result.
Welcome
Your home is one of the largest financial
investments you have – and it’s a pretty big
emotional investment as well.
Deciding to buy, sell or build is an important step,
and whether it’s your first time or you’ve done it
many times, there’s a lot to know and do – often in
a very short time.
This guide sets out to give you practical
advice to help everything run smoothly,
so you get the home you want and
avoid the pitfalls.
It covers the main steps, from deciding
what you want through to organising
your moving day. It also includes
helpful checklists so you don’t miss
something important.
And of course, we explain how home
loans work and how to apply them
in straightforward terms – especially
helpful if you’re buying your first home
or haven’t done it for a while! It can all
seem a bit overwhelming, but we’re here
to help you achieve your dream. And if
you’d like to find out how much you can
borrow we’re happy to meet when and
where it suits you – at home or work,
including after hours or weekends.
If you’d like to know more just get
in touch. You can call into any of our
branches, visit us at www.westpac.co.nz
or call us on 0800 177 277 any day of
the week.
The information is as up-to-date
as we can make it. But obviously
things change, which could affect
some bits of information – especially
prices and phone numbers. The guide
is only intended to provide you with
general information, and everyone’s
situation is different. You should always
seek independent legal and financial
advice before signing any agreement
or contract.
3
In this guide…
04 Buying a home
36 Selling your home
50 Building and renovating
58 Getting the right advice
68 Your tool kit
Take this guide with you when you’re out looking at homes –
there’s a handy tool kit at the back.
© Westpac New Zealand Limited 2008.
Published by Westpac New Zealand Limited. Written by Lynn Newman-Hall of WriteBrain Limited. All rights
reserved. No part of this publication may be reproduced, stored or transmitted in any form or by any means
without the prior written permission of the copyright owner/s. New Zealand rights are owned by Westpac New
Zealand Limited. International rights are owned by WriteBrain Ltd. The moral right of the author has been asserted.
4
Buying
a home
When you decide to buy a home
there’s a lot to know and do. It’s
a big investment and you want
to get it right. You’ll find useful
advice here covering each step,
from what to look for to getting
a loan, and more. And you’ll find
plenty of helpful tips and lists to
help you get organised.
5
06
16
28
The first things you need to think
about, including location, investment
and where you want to live.
You don’t want to buy a lemon.
This section covers things to look out
for – with a really useful checklist to
help you spot potential problems.
Checklist – page 18
We’ve made applying for your loan as
easy as we can. Here’s how to go
about it – plus some tips for first
home buyers.
08
20
30
There are three main ways to buy a
home. We explain them here – and
give some tips on negotiating.
An overview of the lending process –
from the time you apply until the home
is yours.
12
24
32
This is the first question most people
ask us. So here are the basics – plus a
handy guide to working out what you
might be able to borrow.
Loan guide – page 13
The main things you’ll need to
know about different types of
home loans and interest rates if
you’re shopping around.
Where do I want to live?
What type of home
do I want?
Questions to ask yourself about
the type of home you want – with
a checklist to help you decide.
Checklist – page 11
How much can I borrow?
14
Where do I start?
The fun bit is looking at homes.
Here’s some practical advice on where
to start – and a list of questions to ask
the agent.
What should I look out for?
How do I buy my home?
What do I need to know
about home loans?
How do I apply?
What happens next?
What’s the legal process?
You’ll need the advice of a good lawyer
– this section covers the legal stuff you
need to know.
26
34
We’ve kept home loans really
simple – you can do just about
anything you want with a Choices
home loan from Westpac.
A quick explanation of the insurance
you’ll need and how we can help – plus
some tips on home security.
How do Westpac home
loans work?
What insurance
do I need?
Buying a home
6
Where do
I want to live?
Why is location so important?
You’ve probably heard it often – the
most important things to look for in a
home are location, location, location!
Why is it so important?
Your home is one of the biggest assets
you’ll ever own – and your home loan
is probably the biggest debt you’ll ever
have. So you want to make sure the
money you’re investing has the best
chance of growing over the years.
Good location can help. A desirable area
holds its value because others want to
live there too. When prices rise better
areas tend to go up first and faster.
Being in a good area should also make
it easier for you to sell when you want
to move. And you’re more likely to get
back any extra money you spend on
the property.
How do you find a good area?
• talk to family and friends about the
areas they live in
• ask your real estate agent (or valuer)
about recent sales and price trends
– look for areas where houses are
selling well and prices are rising
• look for an area with good
facilities, such as transport, shops,
schools, cafes, sporting venues
and entertainment
• also look for areas that are attractive –
with views, established gardens, lots
of trees, or attractive homes
for instance
• in older areas look for locations
where you can see places are being
renovated and facilities look cared for
• in newer areas look for locations
where there is a variety of home
designs – and effort going into
planting and landscaping
• remember, most people like sun,
shelter, privacy, views and flat land –
areas that offer all this usually
sell well!
• areas with natural advantages
such as parks and beaches nearby
also appeal.
What sort of area would
suit you?
Where you choose to live affects your
lifestyle and your finances. For instance,
living by the beach or out in the hills can
be a wonderful lifestyle choice – but you
may need to think about the time and
cost of commuting to work.
Here are some things to consider
• how close do you want to be to work,
family and friends?
• are you prepared to commute – and
what will it cost?
• do you like quiet or prefer to be in the
heart of the action?
• if you have a family, what services
will you need near by?
• are you planning to run a business
from home – will the zoning allow
it and what support services will
you need?
• what sport and recreation facilities do
you want near where you live?
• do you like old or new homes?
Newer homes are generally in areas
further out.
Try to look at lots of houses in different
areas to get a feel for what you like and
can afford.
What will the area be like
in the future?
Check the zoning for the area with your
local authority, especially in or around
towns and cities, and ask if there are
any changes planned. You want to be
sure the area is still going to be a nice
place to live in the future.
Zoning allows and restricts activities
that can happen in an area, such as
running factories or businesses. An area
may seem quiet now, but if it’s zoned
commercial you may find yourself
surrounded by businesses later on.
We’re here to help.
Have a chat with us
before you start looking
at homes. One of our
mobile mortgage
managers will be happy
to meet you at a time
and place that suits
you. They have a good
understanding of the
local property market –
and can help you work
out how much you can
afford to spend.
Is property an investment?
Most New Zealanders want to own a
place of their own and consider it a
good way to save. Over time house
prices tend to rise and keep up with
inflation, so buying a home can be a
relatively good long-term investment
for many. But prices can go up or down.
If you want a quick growth investment,
or think you might want to sell in a
hurry, it would be a good idea to get
independent professional financial
advice about your options.
Here are some of the advantages
of investing in property
• if values go up you’ll make a gain
• there’s usually no tax on capital gains
(the profit you make if the property
goes up in value)
• many people are better at paying off
loans than saving
• you could make money by
buying carefully, or with some
types of renovations
• it’s a relatively low risk investment
that should keep up with inflation
• you own your home and end up with
an asset instead of just paying rent.
On the other hand
• other investments may earn more
• property prices can go down as well
as up
• it may take time to sell – if you’re in a
hurry you may have to accept less
• you have ongoing extra costs like
maintenance, rates and insurance
• if you don’t keep your home in good
order its value may go down.
To make the most of your
investment
• buy in the best area you can afford
(buying the worst house in the best
street is still good advice)
• check everything out thoroughly
first to avoid problems (there’s a
checklist later)
• keep your home well maintained
• get advice from a valuer before you
do any major alterations – changes
don’t always add value.
Should you do it up?
You may be keen to buy a home you
can renovate or do up, thinking it’s a
good way to make money.
It’s true that one of the joys of owning
a home is making it your own. But it’s
not always true that you’ll get your
money back when you sell. You need to
be careful not to overcapitalise (spend
more on a home than it’s worth).
Anything you plan to do should be in
keeping with the value of the home
and the location. If you think you’ll
want to do big alterations, talk with a
valuer first.
Some things that can add value
• redecorating that makes a home feel
lighter, more spacious and cleaner
• work that cuts down on maintenance
• improving kitchens and bathrooms
• extra living space and indoor-outdoor
flow
• easy-care, attractive gardens
• simple fittings like heated towel rails
• better lighting and skylights.
Some things that may not
• renovations that are out of character
with the home and neighbourhood
• anything that takes something away,
such as turning 3 bedrooms into 2, or
making a garage into a games room
• adding unusual features or things
most people don’t want
• turning your home into the most
expensive one in the neighbourhood.
Why buy the worst house in the
best street?
Being in a good area rubs off on the
value of your house and you may make
a gain by improving your property to
match others in the area. But you need
to be realistic. If you won’t have the time
or money to renovate, it may be better
to look for a place that doesn’t need
much work.
Buying a home is mainly about
lifestyle, but it can also be a steady
way to build up wealth over time.
And owning a debt free home can
make life more comfortable later on.
If you’re renting, use our online
calculator to see what home loan
you could get instead for the same
money! www.westpac.co.nz
Buying a home
7
Buying a home
8
What type of
home do I want?
Would you prefer an
older home?
An older home can provide character in
an established setting. Rooms are often
large with decorative details. But don’t
get carried away with the character
and forget to think about the work and
money that might be needed.
Here are a few things to consider
• older homes can be hard to heat –
they often have no insulation
• the layout may not suit modern
living – often the living rooms are at
the front, away from the kitchen and
private garden
• it can be hard to know what’s ‘behind’
the walls, so alterations can be
expensive – builders may want to
work for an hourly rate instead of
giving a firm price
• the age may mean wiring, roofing,
piles and plumbing need replacing
• sometimes even if you want to make
small changes you’ll end up having to
do other work to get consent
• some renovations need special care
– asbestos products were used until
about 35 years ago, and some
paints contained lead until about
15 years ago.
Still keen? Check everything carefully,
get expert advice first, compare as
many homes as you can – and ideally
find one where the major work has
been done for you.
Do you want a new home?
New homes are generally well insulated,
need little maintenance and have
modern kitchens and bathrooms.
But you may have the extra costs
of landscaping, buying curtains and
carpets, and commuting. A new
subdivision can take a while to start
to look established. If you’re keen to
build, read the section on building and
renovating later on.
Hot tip.
You may want to
arrange a loan with
extra flexibility so you
can afford to make
those alterations or
finishing touches. Ask
about our Choices home
loan – it’s one of the most
flexible loans you’ll find
anywhere.
Are you new to
New Zealand?
If you’ve recently moved to New
Zealand you might find the process of
buying a home here different to what
you’ve been used to. Buying a home or
apartment in New Zealand can take as
little as 3–4 weeks and is usually done
through an agent.
You’ll find a big variety of housing styles
ranging from villas built over 100 years
ago, to very modern places in different
styles. Many homes are built of wood,
or have a wooden structure underneath
a man-made cladding, and many have
metal roofs.
Prices also vary a lot. For example it
usually costs more to buy in Auckland
than the other main cities – and less to
buy in a smaller town or city, although
some coastal areas can be expensive.
Prices also vary between suburbs in the
same city or town.
So it’s important to get good financial
and legal advice before you buy. We
have a special migrant banking team,
who speak many different languages,
to help you get established here.
We can help with all your banking and
lending needs, including international
banking services.
We’ve been providing banking services
in New Zealand since 1861. We’re one
of the country’s largest banks, and
we’re the bank of the New Zealand
Government.
You can reach our migrant banking
team by phoning 09 306 1670, or email
us at [email protected]
If you haven’t already got a copy, ask
us for our Migrant Welcome Pack. It has
helpful information about banking and
living in New Zealand.
Do you want an apartment?
Living in the city is popular and an
apartment can be the ideal first home
or retirement unit. An apartment can
provide convenience, security and
less maintenance, and make it more
affordable to live in a good location.
On the other hand, a small two
bedroom apartment with no parking or
outdoor space in town can sometimes
cost more than a three bedroom home
further out. And not all apartments are
good investments.
Choose the right building
Apartments in older converted buildings
can be a problem and make finance
and insurance harder to get. Why?
Because older buildings may need
expensive maintenance, and many
earlier conversions were poorly done by
people out to make quick money.
There can also be problems with newer
apartments, for example with building
quality or sound proofing. And in some
areas the large number of smaller,
poorer quality apartments built has
affected prices.
In general it’s not a good idea to buy ‘off
the plans’ in a new complex where you
have no proof of the finished quality.
Some owners spend years getting
problems sorted out.
Get the right advice
Many people say they love apartment
living and it’s one of the best moves
they’ve made. But there can be pitfalls
so it’s important to do your research and
get good advice first. Here are a few tips
to get you started
• talk to your local authority and ask
them if they know of any problems
– they do all the consents and
inspections
• get advice from an independent
valuer with experience of apartments
in the area you’re looking – don’t rely
on a developer’s valuation
• choose buildings by local architects,
builders and developers with a good
track record
• be wary of buildings where
apartments often come up for sale
– there may be problems with the
building or the body corporate.
When you’re looking ask
• is there enough space to suit your
lifestyle and belongings?
• does the home have the features you
want? Use our checklist over the page
• does it have storage and parking?
Can you get in and out of the park
easily?
• does it have good safety and fire
prevention features?
• will noises and smells from the area
bother you? Visit at different times to
make sure
• what happens to the rubbish? Check
it’s not stored near your unit
• can you hear the neighbours? Check
for living and plumbing sounds at
times others are home
• is there a live-in manager? If there is,
meet them and ask how things run
• what work has been done recently
and is there money put aside for
new work?
• have there been any problems with
the apartment or the complex, such
as leaks, and what has been done
about them?
• what are the body corporate rules
and the levies you have to pay?
• is there a fund or savings plan to
cover large maintenance work?
• what are the other owners like – are
they mainly owners or renters? This
may affect how quiet and well kept
the complex is
• what is the area like – how is it likely
to change in the future?
What’s the body corporate?
Most apartment complexes have a body
corporate. All the owners belong and
pay a levy to cover building running
costs and maintenance. The group is
responsible for looking after common
areas such as stairs, hallways, garaging,
car parks and grounds. It also sets the
rules for the complex and these can
affect what you can do with your unit
(for instance you may not be able to
alter your unit or run a business from
home). Every body corporate is different
and it’s important to find out how it
works and what the rules are, because it
can affect both your use of the property
and the value of your investment.
When you buy an apartment you
share the ownership of the land
and buildings with others so it’s
important to understand how things
work before you invest – we can help
with practical advice.
Buying a home
9
Selling your home
10
Looking for a
retirement unit?
Considering a
retirement village?
If you’re looking for a place to retire
there are all the usual things to look for,
but there are some extra considerations
as well.
A growing trend is to buy into a purpose
built retirement village. This can be
more complex than buying other types
of property.
You’ll want to know what sort of
recreational, health and public transport
facilities are available in the area.
And you’ll need to know the home
or unit you buy will suit your needs
as you get older – for instance will
the garden be easy to manage, how
much maintenance will be needed and
how suitable will the home be if your
mobility is affected?
Most villages are set up as trusts and
the way you own the property may be
different. In some villages you own your
unit and a share of the common land.
But more commonly you buy a ‘licence
to occupy’ (a right to live there for life)
instead of directly owning the land or
unit itself.
In most cases you pay a lump sum up
front for your unit and an ongoing fee
to cover services. What happens when
you want to sell or move can vary – you
need to check what restrictions or costs
there may be.
Before you buy you’ll have to sign a
contract that covers your occupation
rights, and the village must tell
you about things like its services,
management, finances and fees.
If you’re considering buying in a
retirement village you need to get your
lawyer to check the paperwork before
you sign anything – ideally use a lawyer
who has experience with retirement
villages in the area. You should also ask
your financial advisor to check that the
village is financially sound.
Before you buy, spend some time at
the village, try out the facilities and
talk with others who live there.
Here are some other things
to consider
• what are the ongoing fees and what
do they cover?
• how is the village managed and are
the staff helpful and experienced?
• do you have a say in how things
are run?
• how is maintenance handled?
• what services are available, for
instance cleaning, gardening,
emergency meals?
• what recreational facilities
are provided?
• can friends and family share these
facilities with you when they visit?
• is the village close to community
facilities?
• is any transport provided, or is there
public transport nearby?
• how much privacy will you have?
• what security is provided?
• what health facilities are there?
• is there a range of accommodation
so you can stay in the village if your
needs change?
• what happens if you move out –
what money do you get back and
do you have any costs, such as
refurbishment?
• is any growth in the value of the unit
yours when you sell?
• do they belong to the NZ Retirement
Villages Association (which sets
quality standards for members)?
• if the village is still being
developed, what is the reputation
of the developers?
Protecting your rights
Retirement villages have to be
registered and meet certain standards.
They must also have a statutory
supervisor, a type of trustee, whose
role is to protect the resident’s financial
interests in the village.
What do I want in a home?
Try to think ahead about what you might want for the next five to ten years. You may have to compromise on some things,
so try to visit lots of homes to get a good feel for what your money can buy. There’s also a scorecard in the at the back which
covers the main points here, and you can use it to compare different homes.
What do I want in a home?
Inside my home
How many bedrooms do you need?
How many bathrooms do you want?
Do you want formal and informal living areas?
Do you want a separate dining room?
Would you like open plan family areas?
Do you like the living to flow to the outdoors?
Would you like a fireplace?
Do you want a separate toilet?
Is a separate shower essential?
Would you like a bath?
Do you want an ensuite bathroom?
Do you want a study or office?
Do you need extra space or storage for hobbies?
Do you want a modern kitchen?
Is gas heating or cooking important to you?
Would you like central heating?
Do you want a security system?
Outside my home
Is a view important to you?
Do you want morning, afternoon or all day sun?
How important is shelter from the wind?
Do you want a private, quiet or secluded home?
How important is outdoor living space?
Do you want an established garden?
Do want a large or flat section?
Do you want to drive on to your place?
Do you need a garage or carport – how many cars?
Do you want off-street or nearby parking for guests?
Would you like a swimming pool?
Do you need the property to be fenced?
Other things
Where do you want to live?
What style of home do you like?
Do you want a low maintenance property?
Are you prepared to renovate?
Do you want the home to have potential to extend?
How close to work do you want to be?
Is public transport important to you?
Do you want to live near shops and restaurants?
Do you need to be near schools?
Do you need to be near health or medical facilities?
What sport or leisure venues do you want nearby?
How close do you want to be to friends and family?
Anything else?
Comments
Very
important
Would
be nice
Not really
important
Buying a home
11
Buying a home
12
How much
can I borrow?
How much can you borrow?
The amount you can borrow
depends on
• the value of the home you want
to buy
• how much equity or deposit you have
to contribute
• how much you can afford to pay
towards your loan.
These things all need to balance, so if
you can afford a bigger loan you may
need less equity or deposit.
How much is the
home worth?
How much you can borrow is based on
the market value of the home. Every
lender has different lending guidelines
but most will let you borrow up to
• 90% of the home’s market value (or
the price you pay, whichever is less)
depending on your situation. In
some cases you may be able to
borrow more.
• 90% for a purpose built apartment, or
up to 75% for a converted apartment
• 50–90% of the land’s market value for
a section depending on the area and
services such as water and power.
What equity or deposit
do you need?
Generally you need to have put in at
least 5–10% of the money yourself
before you can get a home loan – this
is your deposit. It depends on the value
and location of the home and your
financial situation. This money could
come from either equity you already
have in a home, from a deposit you
have saved, or from being in KiwiSaver.
The word deposit is also used to mean
the money you pay the real estate agent
as the down payment on your home.
What if you don’t have
a deposit?
The more you can put towards your
home yourself the smaller your loan will
be. And having a deposit shows you
are committed, and gives both you and
your lender a ‘safety margin’.
But we understand that it can be hard
saving enough for a deposit, especially
if you’re buying your first home or are
paying rent at the same time. So we also
have other options to help you get into
your own home, including no deposit
loans and ways your family can help.
• You may not need a deposit – we
may be able to lend you 100% of the
home’s value and set things up so
that you repay 10% of the loan within
the first 3 years.
• Your family could help – perhaps they
can gift you some money or become
a joint borrower?
Finding it hard to save
a deposit?
Come and have a chat
with us. We may be able
to help you get into your
own home sooner than
you think.
What about KiwiSaver?
If you have been saving with KiwiSaver
for at least 3 years you may be
able to take out some or all of your
contributions (plus your employer’s
contributions) to help you buy your
first home. After 3 years of saving you
might also get a Housing New Zealand
first home subsidy of up to $5,000
depending on how long you’ve been
saving. If you qualify you’ll get $1,000
a year for up to 5 years’ saving. Couples
who both qualify could up this amount
to $10,000 between them. To qualify
there are certain income and home
price levels.
What if you already have
a home?
If you already own a home and want to
sell it to buy a new one, you can usually
use the equity in your current home as
the deposit for your new one. Equity is
the portion you own yourself after your
home loan is paid off.
Or you may be able to keep your
current home as an investment and use
some of the equity you have in it to buy
another home. If you’d like to find out
more about investing in property and
whether your home might be a suitable
rental home, ask us for a copy of our
Investors’ Guide to Property.
What loan can you afford?
There’s no easy way to work out what
you can afford – because everyone’s
situation is different. You might like to
start by doing a simple budget so you
know what your current situation is and
how much you might be able to afford
to spend on a home loan. There’s a
budget worksheet in the tool kit at the
back that you might find useful.
Most lenders say your total loan
payments (for all debts) can’t be more
than about a third of your income
before tax. But they also take your other
expenses into account and want to
know that you have spare income left
over for unexpected expenses – and
so you can still have a life after buying
your home.
Here’s a quick guide…
This is a very general guide based on
a couple without children who already
have a deposit and take out a 30 year
loan at 8.15% a year interest. We’ve
allowed for some basic living costs,
including $200 a month for rates and
home insurance, and have assumed
there are no debts except a $2000
credit card limit. How much you could
borrow depends on your individual
circumstances, so what you could
borrow may be more or less than what
we’ve shown here.
How can Westpac help?
If you’re thinking about buying a home
or trading up to a new one come and
have a chat with us – or we can come
to you.
We can work out how much you
can borrow and explain how
everything works.
We have a wide range of saving
and investment products, including
KiwiSaver, to help make saving the
deposit for your home that much easier.
In some cases we might even be able to
help you get into your first home with
no deposit!
If you already have a home we’ll be
happy to explain how you can use
your existing home to help you buy
another home – either to live in or as
an investment.
And if you have a Choices home loan
with us you have plenty of options.
We’ll be happy to explain how you can
transfer your home loan over to your
new home, or apply for a top up to help
cover things like alterations or
new appliances.
If your annual
household
income before
tax is…
You may be able
to borrow…
$50,000
$186,200
$60,000
$235,000
Want to find out more?
$70,000
$287,000
$80,000
$335,700
$90,000
$384,400
$100,000
$433,000
$120,000
$533,600
$150,000
$595,100
If you’d like to work out in more
detail what you might be able to
afford use the charts on the next
page, or use our online calculators.
You’re also welcome to call us on
0800 177 277 – we’re here 7 days a
week to help you.
Working out what you
can afford.
Everyone’s situation is different, but
here’s a quick way to work out what
you might be able to borrow. Or you
might want to try out our online loan
calculators at www.westpac.co.nz
Step 1. Work out what you
can afford
If you take a third of your current
income and take off any money you’re
paying for debts now, you’ll get a rough
idea of the amount you may be able to
afford for home loan payments.
One third of my
income before tax a
fortnight
$
Less my fortnightly
payments for
current debts*
- $
Amount I may be
able to pay towards
a home loan every
fortnight
= $
* Include all your debt payments such
as hire purchase, car loans and credit
card payments (everything except home
loan payments, if you already have a
home loan).
Fortnightly or monthly?
We’ve used fortnightly amounts to
keep things simple (many people are
paid fortnightly and making fortnightly
payments can help you save money).
But you can pay your loan monthly if
you prefer. If you’d like to use monthly
figures just multiply the fortnightly
amount by 26 then divide the total by
12 (or use our online loan calculators to
work it out).
Buying a home
13
Buying a home
14
Where do I start?
How do you find a home?
Once you know what you want and can
afford, you want to get a ‘feel’ for the
market. You could start by
• searching the Internet – try
trademe.co.nz or realestate.co.nz
• reading the papers – weekend papers
often have lots of adverts
• driving around areas you like, looking
for ‘For Sale’ signs and open homes
• looking at homes in real estate agents’
windows, or on their websites.
Real estate companies
Many people find their homes through
a real estate company. Often homes
are only listed with one company, so
ask agents from different companies
to show you suitable homes. If a home
is a ‘sole agency’, only that real estate
company can show you the home. A
‘general agency’ means the home can
be listed with a number of companies.
Private sales
Not all homes are listed with real estate
agents. Some people try to sell their
homes privately and they may use a
‘private sale’ company to help them
with marketing. Don’t assume a private
sale means you’ll pay less – the owner
may be trying to get more from the
sale by not paying an agent – and
dealing directly with the owner may
be quite stressful.
Finding it yourself
Some homes never come on the
market. If you know where you want
to live you could put a short note into
letterboxes in the area, ask locals if they
know of anything coming up, or even
put your own advert in the paper.
How can Westpac help?
Before you get started
come and talk with us.
We can give you an idea
of what you can afford
and put you in touch with
the right people, such as
a lawyer and a valuer.
What should you ask the agent?
Here are some questions you can ask the agent or the owner,
to find out about the home you’re viewing
• why are the owners selling the home?
• how long has it been on the market?
• how much interest has there been?
• what is the Rateable Valuation?
• how much are the rates?
• what are the properties nearby worth?
• what have other places nearby sold for recently?
• what are the neighbours like – do they have children, pets, or noisy parties?
• what facilities are in the area?
• what are the schools like, are they zoned?
• is the house north facing (for sun)?
• when does it get the sun?
• what is the prevailing wind direction?
• is the home sheltered?
• is there noise from traffic, trains, planes?
• is there a danger of flooding or erosion?
• are there any major redevelopment plans for the area?
• are there any zoning restrictions?
• what type of title (ownership) does the property have?
• are there any covenants (restrictions) or easements (rights) on the title?
• are there any protection orders over the trees or buildings?
• where are the boundaries?
• is the home suitable to renovate?
• could the section be subdivided?
• does the home need any urgent repairs?
• has this home been a ‘leaky home’?
• have there been any alterations – do these have consents and certificates?
• has it been re-piled, re-plumbed or rewired – and when?
• what heating and insulation does it have?
• what fittings are being sold with the home?
If you’re looking at an apartment or retirement unit also ask what the body corporate
or ongoing fee is, and if there are any restrictions on the use of the property or
common areas.
Buying a home
15
Buying a home
16
What should
I look out for?
How can you check
things out?
drainage, roads, flooding, erosion,
consents etc. There’s a charge for LIM
reports and prices vary around the
country but you can expect to pay
around $150–$350 (costs are generally
higher in the larger cities and you
usually pay more if you need an
urgent report).
5. Check the title to the property
This will tell you if there are any
restrictions that could affect your
ownership or use of the property. The
agent should have a copy of the title.
Also talk to your lawyer about the title
and any other checks they think you
should do.
1. Check the place out
When you visit a place you like,
take your time. Go back several times.
Ask the agent lots of questions (there’s
a suggested list in the tool kit on page
68), and do a thorough check for things
you may have to fix or want to change.
While LIM reports can contain a lot of
valuable information they may also
be missing vital bits (such as accurate
boundaries, or mention of Wahi Tapu
or sacred sites), so it’s a good idea to
also talk with the staff and try and find
out what other information the
authority may have about the property
and its neighbours.
You might also want to ask your lawyer
about title insurance. It could help
protect you if you find later on that the
boundaries are wrong or there has been
illegal work done on the property.
2. Contact the council
Ask your local and regional councils
for information about the area and any
future plans. Talk to the town planners
(and ask them if there’s anyone else you
should talk to). Ask about the district
or resource plan. It sets out the rules
for development in the area, including
zones and building heights. You can
also get things like drainage and
building plans and copies of permits for
the property from your council.
4. Get expert advice
Get a report on the property from a
licensed building surveyor. Make sure
you choose someone with a good
reputation and ask them what their
report will and won’t cover. Also ask
them to give you an idea of what it
might cost to fix any problems they
find. If there could be any problems
with the land or large structures
you should also get a report from
an engineer.
Once you’ve found a home you’re
interested in you’ll want to check it
out carefully. It really is a case of buyer
beware. You don’t want to end up with a
lemon, or costs you hadn’t planned for.
Here are some ways you can check out
the place you’re interested in.
3. Apply for a LIM report
A Land Information Memorandum (LIM)
from the local authority gives you all
sorts of valuable information about
You my also want to check with the
Weathertightness service (see the Useful
contacts section) to see if there has been
a leaky home claim for the property.
Keep a record of the homes
you visit
Remembering all the homes you visit
and which agent you saw them with
can be hard. Use the diary in the Tool
kit at the back of the guide to help
you keep track.
Is the home in good order?
Before you buy a place you want to be
sure it’s in good order, or at least know
what repairs are needed and how much
they may cost. Your best protection is to
get a report from a building consultant.
But you probably won’t want to pay for
a report until you’ve done some checks
yourself and are fairly sure it’s the home
you want.
Here are a few pointers
When you check the home look for
structural problems, or things like rotten
wood or leaks that can be difficult and
expensive to fix.
Signs of movement and sinking include
cracks in walls and doors or windows
that are crooked or jammed. Rotting or
borer filled timber is soft and spongy.
Rotting wood sounds ‘dead’ when you
tap it and crumbles if you push a key or
something sharp into it.
Signs of leaks include mould, mildew
and bulges in the wall. Often the place
will smell musty as well. Musty or
unpleasant smells can also be a sign of
problems with the drains or sewerage.
Be wary of fresh paint and plaster
especially if only some areas have been
done up – it could well be covering up
a problem. Furniture and pot plants
can provide good camouflage too,
both indoors and out, so don’t be
embarrassed to look behind or
under them.
Some common problems include
• poor ventilation and lack of insulation
• lead paint and asbestos problems
• dangerous wiring
• deterioration in wall claddings
and roofs
• rotting timber windows
• perishing seals on aluminium
windows
• breakdown of silicon sealers
• leaky homes.
There’s a checklist over the page with
tips about what to look out for.
How much will
maintenance cost?
The cost of repairs and maintenance
depends on the age and condition of the
home. But you’ll probably need to allow
at least $3,000-$5,000 a year. It doesn’t
mean you’ll spend this much every
year. But over the years you will have
maintenance costs, sometimes quite
big ones, and you need to be prepared
for this. Here are some rough estimates
based on an average size home.
Some typical
costs
$ Estimated
New roof (steel)
From $10,000
New spouting/
gutters
$3,000–$4,000
Re-wiring
$12,000–$15,000
Re-plumbing
$10,000–$15,000
Re-piling
$10,000–$15,000
Outside paint job
$5,000–$12,000
New switchboard
$3,000–$4,000
Ceiling insulation
$1,500–$3,000
Retaining walls
$200–250 a metre
Storm water drains
From 10,000
Fencing
From $100 a metre
New kitchen
$8,000–$20,000 +
New bathroom
$8,000–$20,000 +
New shower
$1,000–$,3000
New toilet
$300-$1,000
New carpet
$6,000–$15,000
Central heating
$3,000–$10,000
New gas or wood
fire
$1,000–$5,000
A pre-purchase report from a reputable
building consultant can help you decide
how much you might have to spend on
repairs and maintenance.
A word about leaky homes
Any home can have problems with
leaks, especially if maintenance has
been poor. But the term ‘leaky homes’
mainly refers to homes and apartments
built in the 80s and 90s using untested
building methods and products.
Some things to be aware
of include
• monolithic wall cladding systems
• wall claddings that touch the ground
• recessed windows and lack of eaves
• complex roofs and hidden gutters
• solid balconies and decks jutting
from walls.
If the home you’re looking at has these
types of features it’s really important to
get a building report done by someone
qualified to do a weathertightness
report (and preferably using a moisture
meter). If you later find a problem you
may be able to make a claim, but it’s a
lengthy process and there’s a time limit
for making a claim.
Buying a home
17
Buying a home
18
What do I need to look out for?
Once you’ve found a home you like, don’t let emotions carry you away – take a careful look for potential problems. And try to
find out what repairs might cost so there are no expensive surprises later on. There’s also a scorecard in the Tool kit at the back
which covers the main things to look out for and you can use it to compare different homes you view.
Structural things
Floors
Are the floors uneven or do they move when you walk around (try jumping up and down)? It could mean problems
with the piles. Check for rot and borer holes. Are the floors spongy or damp?
Walls and ceilings
Look out for rust or other stains, mould, bulges and cracks that could indicate leaks or that a house that is sinking.
Check for fresh paint and plaster that could be a cover-up. Are walls and ceilings insulated?
Doors and windows
Check they open without sticking, that handles and locks work (and have keys). Sticking or crooked windows
and doors can mean a home is moving. Check woodwork for rot and borer. Check rubber seals on aluminium
doors are not perished.
Under the house
Look for signs of dampness, leaks, borer, pests, gaps or rot in floorboards, cracks in the foundations, rotten or
sinking piles. Is there good ventilation to keep it dry? Test wooden piles below ground level for soft rot.
Inside the roof
Look for leaks, holes, sagging roof, cracks in the chimney, bird nests. Check for insulation.
Living areas
Light
Is there enough natural light? Do skylights open?
Gas
Are the flames strong? Turn all outlets on at once to check flow – if the flames are weak there could be a blockage.
Gas fires need to be vented to the outside to prevent condensation.
Power
Are fittings, switches and sockets in good repair? Are there enough power points and lights? Is the switchboard old?
Fireplace
Does it work? Is the chimney old or cracked? Is there a permit?
Black stains above the fire can mean it’s not working well.
Central heating
Does it work? Ask to test it. Ideally there should be outlets in most rooms, and several controls around the home.
Fittings and chattels
What chattels are included in the sale? Are carpets, curtains, lights, heaters, dishwasher and so on in good order?
Flooring
Check under furniture for worn or stained patches.
TV
Is there an aerial? Is the reception good?
Kitchen, bathroom and bedrooms
Water
Check all taps work – turn them all on at once to test pressure.
Is there plenty of hot water? Is the tank insulated and restrained?
Fans
Do they vent to outside? If they don’t, they can cause fires.
Appliances
Do the oven, hobs, dishwasher and rangehood work?
Cupboards and wardrobes
Look inside them. Is there enough storage? Do they open and shut properly? Check for mould and damp smells.
Toilet
Does it flush strongly? Are the bowl and cistern cracked or stained?
Bath, shower and
hand basin
Are they in good condition? Check the water pressure and look around them for signs of mildew, leaks or
rotting surrounds.
Buying
Buyingaahome
home
19
19
Outside areas
Roof
Check for rust, holes, cracked tiles, signs of leaks.
Outside walls
Check for rotten or broken boards, cracks in plaster, rust or other stains. Is the cladding clear of the ground?
Plaster and paintwork
Is it in good repair? Is it cracked? Look for peeling paint and plaster. But also check new work to make sure it’s not a
cover-up job.
Spouting, gutters
and flashings
Look for rust, holes, cracks and gaps. Are all doors and windows flashed or sealed to prevent leaking? Check for
broken sealants.
Sheds, garages and decks
Are they in good order? Have they been built with permits? If decks or balconies are fully clad, check carefully for
signs of leaks or repairs.
Banks
Is there any sign of erosion? Are retaining walls in good condition?
Boundaries
Ask where the boundaries are? Can you see any survey pegs? Are fences in the right place? Is anything over the
boundary? If you’re not sure, you could get a plan from the council and measure things out – or get a survey done.
Drainage and flooding
Are there storm water drains? Is the ground boggy? Are there nearby streams or rivers that flood?
Access and driveways
Is there good access to the house? Are steps, paths and drives in good order? If access is shared is it likely to cause
problems and who pays for the upkeep?
Other
Is there a washing line? Is there an entry porch? Are fences and railings in good order? Is the soil good? Are the
grounds well looked after? Look under and behind big pot plants – they may be a cover-up.
Also think about
Noise and smells
Check for noises from traffic, trains, planes, neighbours, nearby industry. Check for smells from local businesses,
waterways or rubbish collection. Visit at different times of the day to check.
Safety, security and
fire prevention
Is the access well lit? Is the street lighting good? Check for fire exits – are fire escapes in good order? Are there
smoke detectors? Is there a security system? Do all external doors lock? Do all windows fasten securely? Do decks
and balconies have secure railings?
Buying a home
20
How do I buy
my home?
What are the different ways
to buy?
Buying by offer
and negotiation
There are three main ways to buy
a home
This is normally done through a real
estate agent using a standard sale
and purchase agreement. You make a
written offer using this form, which the
agent takes to the buyer.
1.by offer and negotiation – you
make an offer and then negotiate
if necessary until you and the seller
agree on a price
2.at an auction – you go along on
the day and everyone interested bids
against each other until only one
bidder is left
3.by tender – everyone interested in
buying puts in a written offer for the
seller to consider, usually all at the
same time.
Most homes are still sold by the first
means. But auctions and tenders are
often used in sought after areas, or if a
home has a special feature, or needs to
be sold by a set date.
If the buyer accepts your offer, they
sign it and the form becomes your
sale contract. But the seller may want
to negotiate and make a counter offer
(where they change something in the
offer then sign it). The agent will come
back to you to see if you agree to the
change and if you do, you sign the
change and the deal is done. Or you
might decide to change something
yourself and the process is repeated
until an agreement is reached or one of
you decides to stop.
The big plus about buying this way is
that you can take time to think – and
you can put in conditions that let
you check the place out before you’re
fully committed.
Get your offer checked by your
lawyer before you sign it – and again
if the seller wants to change any
conditions during negotiation.
Important things to know
Your sale and purchase agreement is
a legal contract. You need to have it
checked by your lawyer before you sign
it – and if any of the conditions change
during negotiation. The agreement
becomes binding once both you and the
seller have signed it and initialled all the
changes. You can stop negotiating at
any time up until then.
You can take your time. You don’t have
to have everything agreed in one day
or evening – although this is what the
agent may be hoping to do.
If the seller changes something, you can
change the offer. So if the price goes up
you may want to extend the settlement
date or ask for something else to be
included in the deal. Or you may want
to make your offer more attractive
without raising the price by taking some
conditions out.
Paying a deposit to the agent
Once everything’s agreed you pay a
deposit of 5–10% of the sale price to
the agent. The rest of the money is
paid on settlement day. The agent pays
the money to the seller when your
offer becomes unconditional (when all
the conditions are met and the sale is
definitely going ahead). You get your
money back if the sale falls through
because the conditions are not met. But
you can’t usually get it back if you
want to back out after everything
is unconditional.
The deposit is held in a trust account
and is protected by law. No one can
take it if the real estate company goes
broke and there’s a fidelity fund to cover
missing money.
If you’re buying privately
The process is much the same if
you’re buying privately but it may
be more difficult negotiating directly
with the seller, especially as they may
be expecting more from the sale. It’s
very important to use your lawyer at
each step. If you buy privately, pay
the deposit to your lawyer so they can
arrange for it to be held in a safe
trust account.
The sale and
purchase agreement
The agreement mainly used these days
is a standard one created by the Real
Estate Institute and the Auckland District
Law Society. It’s about 10 pages long
and in small print, so you may want to
get a copy from your agent and read it
in advance so you understand what’s
in it.
Is your offer unconditional?
If you make an unconditional offer
you need to sort out your loan and
everything else beforehand because
once the offer is accepted you have to
go through with the sale. If you break
the contract you can be sued.
Sellers can add conditions too
Sellers can also add conditions,
although this is less common. One
you may see is an ‘escape clause’. This
means if they get a better offer they
can give you a deadline to make yours
unconditional. If you can’t meet the
deadline they can accept the other offer.
Important dates
Your offer has several dates in it. The
finance date is when you need to
have your money arranged by and
settlement date is the day you take over
the home. We also suggest you put in
a date that your offer ends if the seller
doesn’t accept it – that way you’re not
left wondering while the seller possibly
waits for a better offer.
Here are some common types of
conditions buyers add to the agreement.
• finance – this gives you time to
arrange your loan. Make sure it says
finance on terms satisfactory to you
or you could be forced to borrow on
terms you don’t like
• title search – so your lawyer can
check there are no problems with
the title, or restrictions, covenants or
easements you need to know about
• valuation report – so you can check
the market price. Your lender will
probably want you to get one anyway
• LIM report – so you can check what
the council knows about the property
and make sure there are no problems
with things like consents or flooding
• building inspection report – so
you can check the building is sound
and find out about any problems that
might cost money
• engineer’s report – so you can
check any structural or land issues
• sale of another home – if you need
to sell one home to buy another.
You might also want to add other
conditions covering things like repairs
they’ve said they’ll make or extra items
they’ve agreed to leave.
Your conditions need to state that
the report, finance or repairs must be
satisfactory to you. Otherwise you will
still have to go ahead even if you’re not
happy with the results.
It covers things like responsibilities
under various laws and what happens
if settlement is late – and lets you
insert your own dates, amounts
and conditions.
Is your offer conditional?
Making your offer subject to
conditions gives you time to check that
everything’s okay. If your conditions are
not met you don’t have to go ahead,
or you can renegotiate – for instance
you might be happy to do repairs if the
price is lower. It’s very important that
your lawyer checks your offer and any
conditions you add. The other thing to
remember is that too many conditions
can put a seller off.
This offer is subject to…
Your lender will need to see the sale
and purchase agreement after the deal
is done. But talk to them beforehand to
check if they have any specific clauses
they want added.
Some important don’ts
• don’t feel pressured into
rushing things
• don’t sign anything you
don’t understand
• don’t tell the agent or seller
your top price.
If you’re building
There may be extra loan conditions if
you’re building, so it’s a good idea to
talk with us before you sign anything.
We strongly advise you to get legal
advice before you sign any agreement
or contract.
Buying a home
21
Selling your home
22
Buying by auction
Auctions may be used if a property is
unusual or hard to value because it has
some special feature, such as a great
view. Or the seller may want to sell by
a set date.
If you buy at auction it’s unconditional,
so you need to arrange your finance
and do all the legal and other checks
beforehand.
How does the auction work?
If a home is being auctioned, the buyers
go to the auction and bid against each
other until there’s only one bidder left.
The auctioneer runs the auction and
tells you what amounts they will accept.
They’ll try to start high but towards the
end they may accept bids of $1,000, or
even $500 or less.
The seller usually sets a reserve price
and tells the auctioneer what it is.
If the final bid is over the reserve, the
home is sold and the buyer pays a
deposit, usually 10%, to the auctioneer.
Settlement (the day you get ownership)
is usually set for 20 days later, but can
often be negotiated.
If the reserve isn’t reached, the home
is ‘passed in’, meaning it didn’t sell at
auction. Often it sells by negotiation
straight after the auction. If you are the
highest bidder you have the first chance
to negotiate and can add conditions to
the contract at this stage if you need to.
It’s a good idea to go along to a few
auctions first to get a feel for the way
they work.
Set yourself a firm price limit before
the auction and try not to get carried
away on the day.
What’s a good strategy?
Buying at auction makes most buyers
nervous, but chances are the people
you’re bidding against have never
bought a place at auction either.
Everyone has their own ideas about how
to bid. One strategy is to hold back at
first and then come in when some of the
other bidders have dropped out. Once
you’re in the bidding try to appear calm
and determined – so other bidders think
you mean to keep going. You can start
bidding at any time right up until the
auctioneer says ‘sold’. And you can stop
at any time. The auctioneer will still give
you chances to bid – and don’t worry,
they do know a genuine bid from an
inadvertent nose scratch!
Before you buy at auction
• register your interest with the agent
• talk things over with your lawyer
• ask them to do all their checks, like
checking the property title
• get a copy of the auction contract
• arrange your finance with the bank
• get a valuation and any other reports
you need done
• get all the other information you need
such as a LIM from the council
• make sure you have the money ready
to pay a deposit to the auctioneer
• decide on your top price.
Buying by tender
With a tender you make a written bid for
the property. It needs to be your best
offer as the seller looks at all the offers
together and you probably won’t get the
chance to negotiate.
The seller may accept the highest offer
– or decide to negotiate with the person
whose offer they like best. Or they could
reject all the offers. You don’t get the
chance to find out what the other
offers are.
You can put conditions in your offer if
you want. But it is better if you check
things out beforehand instead because
the more conditions your offer has, the
less attractive it will be to the seller.
How do you go about it?
• register your interest with the agent
• get a copy of the tender document
– it tells you how the tender must
be made, and gives details like the
settlement date
• discuss the tender document
with your lawyer and prepare
a written offer
• get a valuation and other reports,
like a LIM, first so you know the
market value
• when you put your offer in you may
have to include a deposit – this is
refunded if your bid is not successful
• if your offer is accepted you are
committed to buying the place and
have a set amount of time to meet all
the sale conditions.
Tenders are usually arranged through
real estate agents. If the tender is
‘closed’ it means offers have to be in by
a certain date and won’t be considered
before then. An ‘open’ tender means
there is no time limit.
Can you buy before the
auction or tender date?
Often the seller is prepared to look
at offers before the auction or tender
closing date. In fact you may see
the words ‘if not sold prior’ in the
advertisement for the sale.
Ask the agent handling the sale what
their policy is on ‘prior’ offers. Usually
if someone makes an offer that’s
acceptable to the seller, everyone else
who has registered their interest gets a
chance to make an offer too. You won’t
know what anyone else’s offer is.
So if you’re interested in a place that’s
being auctioned or sold by tender it’s
important to register your interest
straight away and do all your checking
as soon as you can. That way you could
try to make an offer before other buyers
are ready. It also gives you the best
chance of being able to make an offer
yourself if someone else gets in early.
If you want to try to buy the place
before the auction or tender date
you’ll probably have to make an
unconditional offer.
Have you got your
deposit ready?
If the money you need
to give the agent or
auctioneer as your
deposit is tied up,
perhaps as equity in
your current home or in
an investment you can’t
break yet, talk with us.
We may be able to help
by lending you the money
you need for a short
time – or by guaranteeing
your deposit.
4 tips to improve your chances
1. Get your loan pre-approved so
you have more negotiating power
2. Talk with a lawyer early on, so
you can act promptly if you find a
good opportunity
3. Know exactly what you’re
prepared to pay and be ready to
walk away if you have to
4. Shop around so you know the
market and can recognise a
good buy.
Buying a home
23
Buying a home
24
What do I need
to know about
home loans?
What do you need to
know first?
When you buy a home you usually
need to put in a deposit – either money
you’ve saved or equity from another
property. The more you can put in the
better, because it reduces the amount
you need to borrow. Most lenders will
ask you to put in at least 5-10% yourself,
although here at Westpac we may
be able to help you with a low or no
deposit loan.
You can usually take out a home loan
for up to 30 years (this is called the loan
term). Most lenders will charge you a
fee to set up your loan.
Principal and interest
The money you owe is called the
principal. With most loans you make
fortnightly or monthly repayments and
the money is split so that some goes
to repay the principal, and some to pay
interest to the bank.
Interest is what you pay the lender for
the use of their money. It’s always an
annual percentage, for example 9% p.a.
(p.a. is short for per annum, meaning
a year). It’s usually worked out each
day and charged to your loan every
fortnight or month.
With a long-term loan you often end
up paying more in interest than the
amount you borrow. But you can make
big savings by paying your loan off as
quickly as possible.
You can save a lot in interest
if you
• pay half your monthly loan payment
every fortnight (it means you make
two extra payments a year)
• make your payments as big as you
can and increase them whenever
you can
• keep your payments the same if
interest rates go down
• pay off extra when you have
spare cash.
To make the most of these suggestions
you’ll need some of your loan on a
floating rate.
Different types of
interest rates
There are three different types of
interest rates – floating, fixed and
capped, or you can get a loan with a
combination of these.
Floating interest rate – this can go up
and down when the market changes,
so you pay the going rate. This type of
rate gives you more flexibility to actively
manage your loan, for example you can
pay off some or all of the loan without
having any extra costs to pay.
Fixed interest rate – this type of rate
is fixed at a set level for a certain time.
It’s good for people who need certainty
about how much their payments will be.
If you want to change a fixed rate loan
or end it early a ’break cost’ may apply.
Capped rate – the interest rate can go
up and down – but it can’t go over a
set level for a certain time. It gives you
some certainty about payments and you
won’t get caught on a high rate if rates
go down. Currently Westpac is the only
lender offering a capped interest rate.
Combination of rates and terms –
you can have the best of all worlds by
having part of your loan on a floating
rate (an amount you think you can pay
off quickly) and the rest on a fixed or
capped rate so you have more certainty
about how much your payments will be.
Or you might want to combine several
fixed (or capped) rate terms so not all
your loan is due to be ‘refixed’ at the
same time. This can help you manage
the risk that interest rates are higher
when your fixed rate ends.
Want to ‘lock in’ the
rate that suits you?
With Westpac you can
lock in your fixed or
capped rate for up to 60
days when you apply for
your loan. It doesn’t cost
any extra to take up, and
it means any change in
interest rates between
when you apply and
pick up your loan won’t
affect you.
What types of loans
are there?
There are several different ways of
paying off your home loan. Most
people choose a table loan because it
gives more certainty about payments,
or a transactional loan because it’s
more flexible.
Table loan
With a table loan your regular payments
are the same each time (unless interest
rates change). At first most of the
money goes towards the interest you
owe, but as your loan starts to go down
more of each payment goes towards
repaying the loan itself. This is the most
popular type of loan because it gives
more consistency to your payments.
Interest only loan
An interest only loan is where you pay
all the interest owing each fortnight or
month, but nothing off the loan itself.
These are usually short-term loans (up
to 3 years) to help keep payments low
while you are building, or if you need
bridging finance while you try to sell
another home. You have to repay the
whole loan at the end – or get another
loan. An interest only loan will cost you
more in interest than a table or
reducing loan because the principal
isn’t going down.
Transactional and revolving loans
With a transactional loan your loan
and everyday banking are combined
into one account. There are usually no
set repayments as long as your loan
balance goes down a certain amount
each month.
A revolving loan is where you can keep
taking the money out again – so it’s like
a large overdraft. There’s usually a
set date when you have to repay the
loan by.
Regular payment amount
Interest
Principal
With a table loan you are paying mostly
interest at first – but your payments
stay the same.
Regular payment amount
Interest
An interest only loan keeps payments
down – but you don’t pay anything off
Graph to come
your loan.
Loan limit
Loan balance
With a revolving or transactional loan
you can pay off extra and take money
out again as you want.
At Westpac we have a Choices Everyday
loan that combines the benefits of
both transactional and revolving loans.
This type of loan gives you the most
flexibility.
Get the right loan for you. We’ll
help you work out the best way to
structure your loan to suit your
finances and lifestyle.
Reducing loan
With a reducing loan you pay a set
amount off the loan each time plus all
the interest you owe. So your payments
are a lot higher at the start than later on.
This can save you interest because you
pay more off the loan earlier on.
Reg
ular
pay
me
nt a
Interest
mo
unt
Principal
With a reducing loan your payments are
high to start off with.
Buying a home
25
Buying a home
26
How do Westpac
home loans work?
We’ve kept it simple
with Choices
There are lots of different types of home
loans in the market. So at Westpac we’ve
tried to keep it simple – we only have
one home loan and you can do just
about anything with it. That’s why we
call it Choices.
You choose the options that suit you
best, from the type of interest rate
to how you repay your loan. You can
change it around, pay off more, take
extra out, use Choices for your everyday
banking and have all the advantages of
online and phone banking.
Your Choices home loan will be set up
so that as your life changes your loan
can change too. Normally you can
even take it with you when you move,
keeping the same rate and term and
without paying any extra loan fees.
Quite simply it’s one of the most flexible
home loans you’ll find anywhere.
Like to find out more?
If you’d like to know
about Choices there’s a
brochure at the back of
this guide, and you might
like to visit us at
www.westpac.co.nz
You’re also welcome to
just drop into one of our
branches – you don’t
need an appointment. Or
call us on 0800 177 277.
We’re here to help you
7 days a week.
How much can you borrow?
You can usually borrow up to 90% in
most urban areas. And in some cases
you might not even need a deposit –
this can be a big help if you’re a first
home buyer, for example.
If you’re buying a new home and
keeping your old one as an investment,
you may be able to borrow up to 90%
for the new home and use the equity in
the other one as your deposit.
For an apartment you can usually
borrow up to 90% for purpose built
apartments, or up to 75% for converted
apartments (where the building was
originally designed for another use).
If you’re buying a section we may
be able to lend up to 50–90% of the
land’s value depending on the area and
services such as power and water.
Of course how much you can borrow
varies quite a bit. It depends on things
like the type of home you’re buying,
if you already have a home and how
much you can afford to pay back. So
talk with us about your plans and we’ll
give you a clear idea straight away of
how we can help.
Depending on your lending needs an
establishment fee and other charges
may apply.
Want to borrow over 80%?
If you want to borrow more than 80% of
the home’s value you may need to get a
valuation report. Most lenders will also
ask you to pay for lenders’ mortgage
insurance or a low equity premium as
an upfront fee to cover their extra risk
when you’re putting little or no money
into the home yourself.
Westpac has a different approach – if
you want to borrow over 85% we add a
small margin on your interest rate (a low
equity margin) instead of the upfront
fee. When your loan falls below the
85% mark (perhaps you pay off some
off your loan or your home goes up in
value) just get in touch and we’ll review
your margin.
With a Choices home loan
you can
• usually borrow up to 90% of the
money you need in most urban areas
• choose the type of interest rate you
pay – floating, fixed, capped, or a
combination to suit you
• ‘lock in’ your fixed or capped rate for
up to 60 days when you apply
• choose the loan that suits you –
table, reducing, interest only or
everyday loan
• pay your loan fortnightly or monthly
– or have no set payments with an
everyday loan
• speed up or slow down your
payments
• pay off lump sums – or take money
out again if you’re under your limit
• pay your loan back early
• take a break from your payments –
great if you’re starting a family
• use your loan for other things
like buying a car or doing home
renovations
• have your income paid into Choices
• use Choices as your everyday
account
• use EFTPOS, ATMs and cheques
• do all your banking online or
by phone
• manage your loan online – even
download the information into a
spreadsheet
• change the type of interest rate
• have your loan for up to 30 years
• take your loan with you if you
move home.
Talk to us about what you’d like
from your home loan. Some of these
options are only available with certain
loan types.
Westpac’s current lending criteria apply
to all home loan applications. Charges
and conditions may also apply.
Buying a home
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Buying a home
28
How do I apply?
How would you like
to apply?
Buying or selling a home is a busy time.
So our service is designed to fit in with
your timetable and the way you like to
do things.
You can call in and see us anytime (you
don’t need an appointment). You can
phone or reach us online any day of
the week, or we can come and see you
when and where it suits you. You can
even get started online.
You don’t have to be a Westpac
customer to apply and you don’t even
have to do all your banking with us after
you get a loan (but of course it would
make things easier for you).
Take the first step
What happens first?
We’ll come and see you – one of
our Mobile Mortgage Managers can
come and meet you any time that suits,
including evenings and weekends. You
can find the mobile manager nearest
you listed on our website, or call us on
0800 177 277.
When you first get in touch we’ll explain
how everything works. This takes about
20–30 minutes. Or if you want to apply
on the spot allow about 45 minutes.
Call into any of our branches – and
tell us you’re interested in a home loan.
If you’d like to make an appointment
first, call us on 0800 400 600.
Visit www.westpac.co.nz – just go to
our website and tell us you want to get
started and we’ll be in touch.
Phone us any day of the week – if
you prefer just call us on
0800 177 277. We’re here from
8am–8.30pm weekdays and
9am–5pm weekends.
We’ll make applying for your loan as
fast and as easy as we can. You don’t
have to find a home first – it’s a good
idea to talk with us before you even
start looking.
We’ll cover things like
• how much you can borrow
• borrowing extra for things like
renovations
• how much deposit or equity
you’ll need
• your different loan options
• interest rates and loan payments
• ‘locking in’ a fixed or capped rate
• getting a valuation or other reports
• getting legal advice and making
an offer
• conditions you’ll need in your offer
• the insurances you’ll need
• what to do if the home is being
auctioned or sold by tender.
Want to be pre-approved
for a loan?
What information do
we need?
If you’d like to have more bargaining
power when you’re buying, ask us
about getting a conditional home loan
approval. We can often arrange one on
the spot and it will last for 90 days.
We know you want a fast answer. And
we can usually give you one on the
spot, but at the longest it only takes
about 24 hours from the time we get all
the information we need.
A conditional approval means we’ve
approved you as a borrower and
can give you a home loan, providing
nothing changes for you and the
home you choose meets our lending
conditions. It means you know exactly
what you can afford to pay and it
proves to sellers you’re a serious buyer.
It could help you get a better deal on
your home.
It will help if you have a few things
ready before we talk. Here’s what’s
needed.
Want to make a cash offer?
If you want to make an unconditional
offer or tender, or buy a home at auction
you need to ask us for a conditional
approval first – and do all your legal and
other checks on the property before you
make a bid or offer.
Two types of identification – we
need this by law, even if you’re a
customer. You can use your passport,
birth certificate, resident’s permit,
drivers’ licence or credit card as ID.
We may also need to do a credit check,
especially if you’re a new customer.
Proof of your annual income – such
as recent payslips or bank statements
showing your annual income, or a letter
from your employer. Include anything
that shows regular overtime, bonuses
or commission.
If you’re self-employed, you can use
your latest profit and loss statement
or your latest tax assessment notice
from Inland Revenue. If you don’t have
a current profit and loss statement you
may be able to get a ‘Lo-Doc’ loan using
a declaration of income instead.
Details of your debts and expenses
– such as loans, credit cards, hire
purchases, child support, home
maintenance costs, and the rates and
insurance costs for your new home
(if you know them). It would also be
useful to have an idea of your normal
household expenses.
Your sale and purchase agreement
– if you’ve already made an offer we’ll
need to see a copy of your signed sale
and purchase agreement. If you’re
building we need to see the sale and
purchase agreement for the land and
your contract with the builder. We
may need a valuation report from an
approved valuer too.
Evidence of your deposit – such as
bank statements or sale and purchase
agreement (for the home you’re selling).
A few tips for first home buyers
If you’re a first home buyer you
may feel a bit nervous about
applying for a loan and worried
about missing out on a home you’ve
fallen in love with. How can you
improve your chances of getting
the loan you want?
Here are some tips that can help
• talk to the bank early on and
find out what their lending
requirements are
• find someone you feel comfortable
dealing with and keep in touch
with them
• create a good savings history
– even three to six months of
regular saving can help
• work out a budget before you see
the bank to show you are well
organised financially
• pay off as many debts as you
can before you apply for a loan
(having other debts can reduce the
amount you can borrow)
• try to gather up the information
the bank needs before you apply
(it’ll save you time and means
you’ll get your answer faster).
Buying a home
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Buying a home
30
What happens next?
When your loan is approved
Usually we can tell you on the spot how
much you can borrow and if there are
any special conditions. Then, if you
haven’t already made your offer, you
can go ahead and negotiate knowing
exactly what your top dollar is.
Once you’ve got everything signed and
agreed, we’ll work with you and your
lawyer to get the paperwork done and
make sure everything happens on time.
The first steps
First we need to see a copy of your sale
and purchase agreement and confirm
the dates with you (like the settlement
date). Then check with you about
things like
• what sort of loan and options
you want
• how you want your payments set up
• what bank accounts you’ll need
• what insurances we can help with
• how you’ll be paying your share of
the purchase price.
The next steps
We prepare your home loan agreement
and send it to your lawyer, and ask
them to arrange your mortgage. You’ll
need to see your lawyer so they can
explain this to you, and so you can sign
the paperwork.
We’ll also make a time for you to come
in and see us so we can set up things
like your automatic loan payments and
any insurances you may need (there’s
more about our insurances on page 35).
During this stage your lawyer also
checks that the conditions in your sale
and purchase agreement are met, that
there are no problems with the title, that
the house is insured and the rates paid –
and lets us know everything is okay.
The final step – settlement
On settlement day your lawyer gives
us a certificate to say everything can
go ahead.
We then pay the money to your lawyer
(including the money you’re putting in
yourself if it’s in an account with us).
It may be a little different if you’re
building. If progress payments are
needed, the lawyer will arrange the
payment for the section and we’ll make
out bank cheques for the builder at
different stages of the project.
And afterwards
After settlement day we’ll contact you
to check everything has gone
okay and that your loan payments
have started.
You’ll get regular loan statements so
you can keep an eye on your loan (you
can check it online or at your nearest
branch anytime).
If you have a fixed or capped rate loan
we’ll be in touch before it’s due to end to
see what you want to do next. We can
move it straight into another fixed or
capped rate – or it may be a good time
to restructure your loan.
We’ll also stay in touch to let you know
about new options or ways to save
money, and will regularly review things
with you to make sure your home loan
still suits your lifestyle.
We’ll be happy to guide you through
the whole process – if you have any
questions just contact your branch or
call us on 0800 177 277.
If things change… ask us how you
can speed up your loan payments
to save money. Or if things get a bit
tight, ask how you can change your
loan to make things easier.
What will you need to sign?
The main document involved is the
home loan agreement. There may also
be some paperwork if we’re opening
new accounts for you.
People often confuse the home loan
agreement and the mortgage.
• The loan agreement sets out the
terms and conditions of your loan –
it’s a document which we prepare and
send to your lawyer for you to sign.
• The mortgage is the security
for your loan (it gives your lender
certain rights if you can’t pay your
loan) – it’s an electronic record on
the title of your home which your
lawyer arranges.
Your loan agreement covers
things like
• how much we’re lending you and
how long the loan is for
• when payments will be made and
what happens if they’re late or missed
• changes you can make to your loan
and any costs that might be involved
• what the interest rate is and how
much notice we need to give
about changes
• keeping the home insured and paying
rates and insurance on time.
What if you’re not successful
this time?
If we can’t give you a loan we’ll let
you know as soon as possible and
explain why.
It may be that you need to save up a
larger deposit or have more equity.
Or you may need to build up more
of a savings history – even saving for
another three to six months can make
a difference.
The loan also has to be realistic – you
need to have enough left to live on
once you become a homeowner. So we
may not be able to offer you as much
as you’d like, but we may still be able
to help if you find a home that costs a
little less.
Whatever the reason, we’ll talk over the
options with you. And we’ll help you
work out the steps you can take so that
you can apply again successfully – and
get that home you want.
Want to work out a budget or a
savings plan? Why not visit us at
www.westpac.co.nz and try out our
online saving and loan calculators.
Buying a home
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Buying a home
32
What’s the
legal process?
What’s your lawyer’s job?
Your lawyer’s job is to protect you by
checking contracts, explaining your
rights, and making sure the property’s
title is in order. They also do the legal
work to transfer the property to you
(the conveyancing) and register your
mortgage on the property title.
They’ll provide advice on things like
different ways to own the property (for
example as joint tenants), negotiating
the price and things you need in your
sale and purchase agreement.
They may also help with arrangements
for your loan and insurance. And they’ll
probably suggest you make a new Will
and Enduring Power of Attorney, so your
affairs are in good order if something
happens to you.
Before you make an offer
You should always seek a lawyer’s
advice before you make an offer to buy
a home.
They can help you by
• checking the sale and purchase
agreement, auction or tender
documents
• making sure you have the right
conditions in your offer to protect you
• arranging valuations and reports
• advising you on ownership matters
and any legal issues
• providing advice on negotiating
the price.
If you’re buying at auction or wanting
to make an unconditional tender, your
lawyer will need to do all the legal
checks first, such as checking the title
and LIM report.
You should never sign an offer or any
legal document without asking your
lawyer to check it first.
When your offer is accepted
Once your offer is accepted your lawyer
makes sure the conditions in your
agreement are met and starts doing the
legal work to transfer the property to
your name.
The transfer is done electronically
using Landonline (the electronic dealing
system of LINZ, Land Information New
Zealand). Your lawyer signs online on
your behalf, so they will ask you to
sign a form giving them authority to
act for you.
At this stage their job usually includes
• checking the title for any ownership
restrictions
• checking the LIM for things like
consents, and potential problems
• checking local authority plans to see
if any major changes are likely
• checking all the conditions in your
agreement are met
• preparing the authority form for you
to sign and confirming your identity
so they can act on your behalf
• setting things up in Landonline – a lot
of the legal work is done in advance
• explaining your loan agreement to
you and arranging the mortgage
• checking rates and other costs are
paid up to date
• making arrangements with you and
the bank for payment of your loan
and your share of the purchase price.
Your lawyer will also check the property
is insured – this is a condition of your
home loan. We can arrange all your
insurances when you apply for your
loan.
Do a final check
Before settlement day it’s a good idea
to do a final check to make sure
• the property is still in the
same order
• any agreed repairs have
been done
• everything you’ve bought is
still there.
If there’s a problem, talk to
your lawyer before everything
becomes final.
On settlement day
On settlement day your lawyer works
to settle the deal and does the transfer
of ownership.
This work includes
• doing a guaranteed title search
• liaising with the seller’s lawyer to
make sure you receive a clear title
• paying the money to the
seller’s lawyer
• ensuring the seller’s lawyer does their
side of the electronic dealing
• completing the transfer
using Landonline
• final details such as where you get
the keys and when you can move in!
The money paid on settlement day
takes into account the deposit you’ve
already paid on the home to the real
estate agent.
After settlement
After settlement the lawyer will
• register the new mortgage and the
transfer of the title
• provide you with a statement
showing all the purchase details
• send a copy of the title, mortgage and
certificate of insurance to your lender
• give you a copy of the title showing
you registered as the new owner.
It’s a digital world
Unlike the old days there are no
longer any fancy paper titles for
properties. Now land records are
electronic and the transfer work is
done using Landonline, the electronic
registry system of LINZ (Land
Information New Zealand). This
means you won’t be asked to sign
any ownership or transfer papers –
just a form so the lawyer can do the
work for you. The lawyer must be
licensed by LINZ to do this work and
their systems have to meet certain
e-security standards.
Are you buying with
someone else?
What types of ownership
are there?
There are two main ways of sharing the
ownership of a home. You can have a
joint tenancy where you own the home
together and if one person dies the
others take over the ownership – this
is the way most couples own a home
together. Or you can have a tenancy in
common, where you each own a share
and can leave your share to anyone you
wish in your Will – this is more common
when there are several owners. Another
option is a property sharing agreement.
Your lawyer will advise you on the best
way to set things up for your situation.
Most people buy a freehold home, but
there are quite a few different ways to
own a home.
Freehold – this is the most common
type of ownership. It means you own
the land and house with virtually no
restrictions on your ownership rights.
The term freehold is also commonly
used to mean that you don’t owe any
money on the home.
Leasehold – with this type of
ownership you lease the land and pay
rent to the landowner. You own the
house but your use of the land may
be restricted, and the rent can go up.
You can sell the lease if you want to
move, but you may need to tell the
landowner first.
Cross-lease – this is where there are
several homes on a piece of land and all
the owners own the land together. Each
owner leases the land their home is on
from the others for a small cost.
Unit title – you own or lease your
unit but common areas (like stairways
and parking) are managed by the
body corporate.
Company title – if you buy a flat with
company title, you buy ‘shares’ that
give you the right to live there. The
company administers and maintains
the block of flats.
Licence to occupy – with this type
of ownership you don’t actually own
the land or buildings, but you have a
right to live there for life. This is the
most common type of ownership for
retirement villages.
Buying a home
33
Buying a home
34
What insurance
do I need?
Insuring your home
and contents
Having house insurance protects
your investment and is a condition of
your home loan. Here’s how Westpac
can help.
Home Cover – for your home
We can insure your home in case it’s
accidentally damaged including by fire,
water, natural disaster or in a burglary.
You can choose replacement cover
based on the size of your home or
cover up to an agreed amount. It also
covers extra costs such as temporary
accommodation, landscaping, extra
home loan payments (if your loan is
with us), even lost rent if you’re
a landlord.
Contents Cover – for your
belongings
We can insure the contents of your
home and other personal belongings in
case they’re stolen, lost or accidentally
damaged. Just about everything is
covered. Many major items can be
replaced no matter how old they are.
You’re covered for lots of extras too
like replacement keys, items used
for a home business, and even some
overseas travel.
We can also insure your vehicles
and boat.
Is your home secure?
Preventing problems is the best
insurance you can have. Here are a
few simple tips for after you move
into your new home
• install smoke detectors
• have a hose handy outside
• have a small fire
extinguisher inside
• check storm water and
other drains
• fit good quality locks
• get to know your neighbours
• keep bushes near the
home trimmed
• have outdoor lights with sensors
• use timers on inside lights if
you’re out
Save on premiums – if your home
is insured with us you can save
money on your contents and vehicle
insurances.
• make sure garages and sheds
lock up
• consider installing an alarm.
Protecting your finances
Here are some of the ways Westpac can
help make sure that even if things go
wrong at least you or those you love
won’t miss out.
Flexicover – home loan insurance
Flexicover can help repay your home
loan if you die, can’t work because you
become terminally ill or totally disabled,
are made redundant or are bankrupted.
You only ever pay for the cover you
need because your premiums adjust
to match your home loan balance.
Flexicover is only for Westpac home
loan customers.
Disability Cover –
income protection
Disability Income Cover can provide
an income if you can’t work because
you are totally disabled by illness or
accident. Any replacement income is
based on a percentage of your usual
income, and is normally reduced by
the amount you get from other sources
such as ACC.
Term Cover – life insurance
Term Cover can provide a lump sum
when you or your family need it most –
if you die or become terminally ill. You
can also include Crisis Cover, so you’re
insured if you become critically ill with
certain health conditions.
Would you like to
know more?
If you’d like to know more about our
insurances just ask at your branch
or call
• 0800 809 378 for home, contents
and vehicle insurance
• 0800 738 641 for our other
insurances.
The information about these insurances
is very brief and general. Terms,
conditions, exclusions and limits apply
to all applications for insurance.
Buying a home
35
36
Selling
your home
Are you selling for the first time – or has it
been a while? We’ve tried to cover the main
things you’ll want to know and think about
before you put your home on the market.
Selling may not even be the best option!
You’ll find plenty of useful advice in this
section to help you
make the right
choices and get
the best price.
37
38
44
Selling your home may not be your
best option – here we cover some
other options including keeping it as an
investment.
We cover the three different ways to
sell – and compare the advantages and
disadvantages of each.
42
47
Pricing your home can be hard. You
don’t want to put people off or undersell
– here are some ways to check the
value first.
The agent works for you – so here’s
some helpful information about listing
and questions to ask the agent first.
43
48
Practical suggestions will help you
present your home at its very best – and
get the best price possible.
Here are some things to consider if you
want to ‘do-it-yourself’.
Where do I start?
What is my home really worth?
How can I get a better price?
How do I go about selling?
Selling through an agent
Selling privately
Selling your home
38
Is it a good time to sell?
It’s a ‘sellers’ market’ when there are
plenty of willing buyers competing to
buy homes and the prices are rising.
It’s a ‘buyers’ market’ when things are
a bit slow and buyers can afford to be
choosey and negotiate harder.
If the market is booming, it’s a good
time to sell, but it could be harder to
buy at a good price. You probably won’t
want to leave too much gap between
selling and buying again, or you could
get caught out by fast rising prices.
When the market is slower, it can be
harder to sell your home for the price
you want. You might want to think
about buying the new home you
want, but keeping the old one as an
investment until the market picks up
again. We can help you work out if this
might be an affordable option for you.
Try to avoid ‘having to sell’
It’s best if you don’t have to sell in a
hurry. So if you’re making an offer on
another home, give yourself plenty
of time to sell. And make your offer
conditional on your home selling at a
price acceptable to you. If you can’t sell
by the date set and don’t want to miss
out on the new home, ask your lender
if you can get ‘bridging finance’ (a shortterm interest only loan) to tide you over.
If you’re in a position where you think
you may have to sell, it could be a good
idea to put your home on the market
sooner rather than later, to give yourself
more time to find a buyer willing to pay
the price you want.
Of course these are very general
comments and there are many things
that can affect the market for your
home, such as what’s happening with
interest rates, developments in your
area, special features about your
home and even the seasons. Spring
and summer months are often preferred
for selling because homes are warmer
and lighter, gardens look better and
any problems with damp or leaks are
less evident.
Where do I start?
What are your options?
Before you decide to sell, here are a few
things to think about first
• could you get the home you want by
renovating or extending instead?
• how much more will you have to pay
to get the home you want – can you
afford it?
• would it be a good idea to keep your
current home as a rental investment?
• if you’re selling so you can retire do
you have any other options?
Talk with us about your
plans to sell and we’ll let
you know about your
options
Should you do up or move?
What will it cost to move?
Selling and moving can be an expensive
business. So if you like the area but
the home no longer meets your needs,
renovating or extending may be a good
option instead of selling.
The main costs you will have when you
sell are the real estate fees and your
moving costs. But you also need to be
prepared to pay some one-off expenses
for your new home, for instance if
you need to make repairs or buy new
appliances and furniture.
On the plus side
You save the cost of moving and selling
your home. Estate agents fees could be
up to 4% or more of the price you sell
your home for – and moving could cost
you several thousand dollars. There’s
more about costs later on, and a list of
costs in the guide Tool kit.
On the other hand
You need to be careful that you don’t
overcapitalise and spend more on your
home than it’s worth. If you alter your
home would this make it better than
other homes in your street or area? If
the answer is yes, you may not get all
your money back when it’s time to sell.
It’s not for everyone
Doing up a home is not for everyone.
It can be hard living in a home during
renovations, and if you have to move
out for a while it can add quite a bit to
the cost of the project.
There’s more about renovating in the
‘Building and renovating’ section, and
some advice on what may or may not
add value to your home.
Real estate fees
The real estate agent is paid by the
seller when the house sale becomes
unconditional.
The fees and costs can vary quite a
bit from company to company. Some
companies charge a base fee plus a
commission based on how much your
home sells for. Others charge just a
commission and some charge a fixed
fee no matter what your home sells for.
Base fees are usually around $500 plus
GST. Commissions usually start at about
3.75–4% (plus GST) of the sale price, but
may work out less for more expensive
homes – or you may be able to
negotiate a fixed fee. You may also have
other costs such as advertising (which
you pay even if the home doesn’t sell).
You may be able to get a better deal,
especially if you sign up with just one
agency, so be prepared to talk with
several agents and negotiate the fee.
However, the fee is not the only thing
you should think about. There’s more
about this later on page 47.
Moving costs and insurance
Moving costs vary considerably.
You could expect to pay anything from
$1,000 to $3,000 to move within the
same town or city. It also depends on
how much of the packing you will
do yourself.
Most contents insurance policies don’t
automatically cover your belongings
during a move, so you’ll probably
need to ask your insurer to give you
extra cover for the day. Or the moving
company may be able to provide the
cover. If you’re planning to do any of
the packing or moving yourself, it
would pay to check what the insurance
will cover.
Selling your home
39
Selling your home
40
Should you keep your home
as an investment?
Many New Zealanders own a second
home as an investment. It makes
sense to do the sums and think about
the possibility of keeping your current
home as a rental property before
you decide to sell. It could be one way
to start or expand your investment
portfolio.
On the plus side
If owning a rental property is something
you have in mind for the future, keeping
your current home when you move
could be a practical way to achieve it.
It means you’ll save on the time it would
take you to look for a suitable rental
property to invest in, you won’t have to
pay a real estate fee to sell your current
home, and you should have a good idea
of what maintenance might be needed.
On the other hand
Not all homes are suitable rental
properties. You need to be sure the
home will be easy to rent, and that you
can get enough rent to cover the costs
of keeping it. We can help you work out
how much you might need to borrow,
and what your loan would cost.
Will the rent cover the costs?
To get an idea of the rent your home
might fetch, check similar places listed
with local rental agencies.
The Department of Building and
Housing website provides information
on average rents for homes around
the country.
You could also ask a rental agency,
or property manager, to give you an
opinion about how easily your place
might rent and what rent you could
expect to get.
Ideally your rent should cover your loan
and all expenses for the property. You
need to allow at least 25% of the rental
income for running costs such as rates,
insurance and maintenance – and more
if you use a property manager.
Would it make a good rental?
You need to try to think about your
home in a detached way (which is not
always easy).
Ask yourself
• is the home in a good, safe area?
• are there good facilities nearby,
such as shops, medical centre,
sports grounds?
• is the home close to public transport?
• is it in good condition?
• is it easy to maintain?
• are the grounds easy to look after?
• is it sunny, sheltered and not damp?
• are the living areas a reasonable size?
• does it have 2–3 bedrooms?
• does it have a modern bathroom,
kitchen and laundry?
• are appliances and fittings in
good order?
• is there a garage or off-street parking?
• is there private outdoor living space?
• how much rent could I expect to get?
• would the rent cover the loan, rates,
insurance and upkeep for
the property?
If you’ve answered mainly ‘yes’ chances
are your home has reasonable rental
potential. But you also need to check
with local authorities to see if there are
any plans for major changes in the area
that could affect the property’s future
value, such as zoning changes or plans
to build a motorway nearby.
Our free Investors’ Guide
to Property explains the
main things you need
to know about owning
rental property and
being a landlord. You
can pick up a copy at
any of our branches or
order one online at
www.westpac.co.nz.
What about your Choices
home loan?
When you buy a new home, you can
usually take your Choices home loan
with you, keeping the same rate and
term without paying any extra loan
fees. You can also use Choices for an
investment home.
Come and have a chat with us as soon
as you decide you might want to sell
and move, so we can tell you what you
need to do and how much extra you
might be able to borrow. You can also
check how much you might be able to
borrow using the charts in the ‘What
loan can I afford?’ section (on page 13)
or our online calculators.
Not planning to buy again?
If you’re not buying another home
your existing home loan will need to
be repaid when your home sells. If you
have a fixed interest rate there will be a
cost to pay off the loan early.
We’ll work with your lawyer to arrange
the repayment of your loan and the
discharge of your mortgage. And of
course we can recommend a suitable
investment for the money you get
from the sale so that it continues to
work for you.
Prefer to buy after your
home sells?
Talk with us about your options if you
want to sell first before buying again.
If your Choices loan is on a floating rate,
it may be best to repay it, get a new
loan when you buy again and invest the
money from the sale in the meantime.
Paying off your home
loan? We have lots of
investment options to
help you make the most
of your money. If you’d
like to talk with one of our
investment advisors call
us on 0800 738 641.
What If you keep your
current home?
Choices can be used for rental homes,
so if you think your current home would
be a good investment property come
and talk with us. We’ll explain how you
could use your current home as your
equity and borrow up to 90% of the
money you need for another home (we
can also help with home insurance that
covers your extra risks as a landlord).
If you do plan to keep your current
home as an investment you’ll also need
to talk with a financial advisor or tax
specialist. They can tell you the best
way to set things up for your situation
as well as give you advice on things
such as claiming expenses.
What if you buy before the sale
is complete?
If there’s a gap between buying your
new home and getting the money
from the sale of your current home we
may be able to increase your Choices
home loan for a short time, or help with
bridging finance. Bridging finance is
an interest only loan for a short term
to help ‘bridge’ the gap when you have
two homes to pay for.
But of course paying for two homes at
the same time is not easy. So if you’re
thinking of buying a second home
please talk to us well in advance (before
you sign anything) to see if it’s possible.
Selling your home
41
Selling your home
42
What is my home
really worth?
How do you decide what
to sell for?
It’s important to do your homework
before you decide on the asking price
for your home. There are several
sources of information you can use to
work out what your home might sell for.
Your rateable value
The rateable value (RV) provided by
your local authority is not necessarily a
good guide to what your home might
sell for. Some homes sell for a lot more,
or less. The value does not include
chattels, such as carpet, drapes, light
fittings, appliances and built in items
that can add to the saleable value of
your home.
Your real estate agent
Most agents are happy to do a free
appraisal to give you a price they think
it would sell for. While an experienced
agent will have a good idea of the
current market, it is still only their view
and different agents could have quite
different views. Some may tend to give
a higher price to encourage you to sign
up with them, while others may give a
lower price because it makes the home
easier to sell.
Other recent house sales
Try to find out what other homes in the
area have sold for in recent months.
You can buy this information from QV
(Quotable Value). Your real estate agent
can provide similar information from the
REINZ (Real Estate Institute) database.
You could ask the agent to show you
similar homes for sale in your area, so
you get a feel for the ‘competition’.
Your asking price should
be what you consider
a fair market price is.
Leave some room for
negotiating, but don’t
make it so high you put
people off.
Registered valuation
Getting a valuation from a registered
valuer may cost $500–$800, but it can
be a good guide to how much your
home is likely to sell for. The valuer will
look at the features and condition of
your property, as well as what similar
properties in the area have sold for.
Ask your lender who they recommend
you use.
A registered valuation can be a useful
negotiating tool. You don’t have to
tell the agent or anyone else what the
valuation is, but you can indicate that
an offer is under valuation and needs
to come up. Or if you are happy to
accept an offer at the valuation price
you could offer to share the valuation
report with the buyer if they share the
cost with you.
What will a buyer pay?
Many people think their home is worth
more than it really is – but in the end it’s
only worth what a buyer will pay.
If you overprice your home you could
put genuine buyers off. And if a home
is on the market for a while without
selling, buyers tend to wonder what’s
wrong with it. So it pays to be realistic
about your sale price at the start.
Is your home hard to value?
If your home has features that set it
apart from other homes, such as a view
or waterfront location, it may be hard to
decide on a sale price. It may be better
to sell by auction or tender because you
don’t have to set a sale price – instead
the buyers bid or tender what they are
prepared to pay.
Do you have a large section?
It will increase the value of your
property if your section can be
subdivided. Check it out with your local
authority and if subdivision is possible
tell the valuer and agent.
If you want to achieve the best possible
price for your property you need to
present your home at its best. Here are
some suggestions.
Inside your home
If you make sure your home is in
top condition buyers will feel more
confident it has been well looked after.
• get everything spick and span
• clean the oven, hobs and
extractor fan
• make sure appliances work
• clean out the pantry, drawers,
cupboards and wardrobes to
create space
• get rid of clutter on benches and sills
• clean fireplaces and set
with pinecones
• make sure doors and windows
open freely
• clean windows inside and out
• get carpets professionally cleaned
• wash and polish wood, vinyl or
tile floors
• do any minor repairs needed
• replace broken lights and switches
• repair dripping taps and any leaks
• wash interior paintwork
• clean showers, replace old curtains
• replace old or cracked toilet seats
• put new towels in the bathroom
• put vases of flowers in main rooms
• leave lights on in dark areas or rooms
• make sure the house is warm
in winter
• leave some windows open in summer
• consider hiring items or art to update
the look of your home.
What’s that smell?
Unpleasant smells in and around your
home can easily put buyers off. So
make sure that rubbish is put out, there
are no lingering cooking smells, pets
are out and there are no dirty ashtrays
(suggest smokers go outside to smoke).
On the other hand pleasant aromas
such as fresh baking, ground coffee and
spring flowers can enhance the appeal
of your home.
If the job seems too
big, think about getting
professional cleaners and
gardeners in to help.
Outside your home
The outside of your home creates
the first impression for the buyer, so
it’s important that it seems fresh and
welcoming.
• wash the paintwork
• clean out the garage
• remove any rubbish from the section
• mow the lawns and tidy up
the garden
• prune hedges and trees for more light
• clean outdoor furniture
• sweep paths and clean away
any moss
• clean and repair fences, repaint
if needed
• paint and tidy up your letterbox
• clear gutters and any blocked drains
• plant plenty of cheap,
colourful flowers
• place flowerpots around the entrance
• water gardens and fertilise lawns
in the weeks and months before
the sale.
Should you renovate?
Doing major renovations just to sell
is not usually a good idea. But if your
home is tired and out of date, it may be
worth spending a little to improve it.
Kitchens and bathrooms are especially
important to buyers.
You could
• repaint in fresh, modern colours
• replace shower curtains with
glass doors
• re-enamel a worn bath
• replace a stained toilet
• replace or cover badly worn flooring
(are there floorboards underneath?)
• remove and/or replace old blinds
• add a French door to a garden
• put in a carport or off-street parking
• add a deck, or create an outdoor area
• open up two living rooms into one.
Ask your real estate
agent and valuer for
advice on what might add
to your home’s saleability
and value.
How can I get a
better price?
Selling your home
43
Selling your home
44
How do I go
about selling?
Three different ways to sell
There are three different ways to sell
a home
1.by offer and negotiation
2.by auction
3.by tender.
Most people sell through an agent, but
private sales are becoming
more common.
1. Selling by offer
and negotiation
Most homes are still sold this way. You
set an asking price, put your home on
the market and if a buyer is interested
they make an offer. If you’re using a
real estate agent and someone wants
to make an offer the agent usually
contacts other interested buyers in
case they also want to make an offer –
so you could end up with several offers
at once.
Offers are usually made using the
standard sale and purchase
agreement form developed by the
Real Estate Institute and Auckland
District Law Society.
If you want to accept, you just sign
the form. But if you want to negotiate
you go back with a ‘counter offer’ by
putting your change on the form and
then signing it. If the buyer signs the
change the deal is done – or they may
come back with another counter offer
themselves. This process is repeated
until you and the buyer agree on the
price and all the conditions – or you can
stop at any stage. Your real estate agent
will act as the go-between and try to
help you make the deal.
Once both you and the buyer have
signed the form and initialled all the
changes, the agreement becomes
legally binding. The buyer then pays
the real estate agent a deposit (usually
5–10% of the sale price).
Is the offer conditional?
The buyer will normally have several
conditions in the agreement, such as
getting a building consultant’s report,
or arranging finance. Once these
conditions are met the agreement
between you becomes unconditional
and you are both legally bound to go
ahead with the deal. The real estate
agent then takes their fee out of the
buyer’s deposit and pays you the rest.
If either you or the buyer back out at
this stage it usually means the lawyers
(and maybe the courts) become
involved and penalties and costs may
be awarded.
Negotiating the deal
As the seller you can also negotiate
on the price and the other conditions.
For example you might be prepared to
accept a lower price if the buyer makes
an unconditional offer or agrees to give
you more time to find another home. Or
you might want to keep some of
the chattels.
If the buyer wants to make their offer
conditional on selling another home you
can add an ‘escape clause’ in case you
get a better offer from someone else.
It means you can give the first buyer a
deadline to go unconditional and if
they can’t meet this you can accept the
other offer.
Important things to
remember
• take your time – don’t
feel pressured into
accepting a deal you’re
not sure about.
• use your lawyer –
always get them to
check an offer before
you sign it, and if any
important conditions
change.
2. Selling by auction
3. Selling by tender
Auctions are often used if a property
is unusual or hard to value because it
has a special feature, such as a great
view. The main advantages of selling by
auction are that competition between
buyers can push the price up – and the
sale is unconditional.
Tenders give the seller a chance to see
what interest there is in their home,
without having to put a price on it.
Tenders can also be useful if you have a
set date you need to sell your home by,
but they generally work best for special
or unique properties.
The way it works is that interested
buyers bid for your home on the
auction day. You usually set a reserve
(the minimum you’ll sell for) and once
bidding is over this level the home is
sold to the highest bidder, they pay a
deposit and settlement is usually 20
days later.
Potential buyers are invited to submit
written offers, usually by a set date.
You are not obliged to accept any of the
offers, and can choose to negotiate with
any of the people who have made an
offer if you wish.
Two important things
to understand
1.you shouldn’t tell anyone your
reserve – only the auctioneer just
before the auction starts
2.you need to do your homework
before setting the reserve, because
if a home sells at auction it is
unconditional – you can’t
negotiate further.
What if the reserve isn’t reached?
If the bidding doesn’t reach the reserve
the home is ‘passed in’ and the auction
ends. However, you can then negotiate
with the highest bidder or, if that doesn’t
work out, with the other bidders.
You can also sell before the auction
if you receive a good offer – but you
would generally expect the offer to be
unconditional. Usually if this situation
arises the agents will notify everyone
interested in your home, so they have a
chance to put in offers as well.
One drawback to selling by auction is
the extra cost of promotion, which
you will have to pay on top of the real
estate fees.
If your home is likely to attract a lot
of interest, a tender may help you get
the best price for it. This is because
potential buyers don’t know what
other people may offer and tend to
put in their best price with few if any
conditions. On the other hand tenders
can limit the number of people who
are prepared to make an offer – some
are put off by the closed nature of the
tender process.
You can tender your home using the
services of a real estate agent, or
privately through a lawyer or another
agent. If you use a real estate agent they
will arrange everything. You will pay
their normal fees and probably extra
for advertising.
Open to the public
The agents you choose
will hopefully show lots
of people through your
home. They may also
want to arrange several
open days to generate
more interest. Here are a
few tips
• make sure the place is
clean and tidy
• go out when buyers
come – they may feel
uncomfortable if
you’re there
• if you have a dog, take
it with you
• lock your
valuables away
• ask the agent what
security precautions
they take, especially
for open days.
The agent should always
accompany the viewer
right around the home.
On open days make sure
there will be someone
watching each room.
Selling your home
45
Selling your home
46
What’s the best way to sell?
Selling by
Advantages
Disadvantages
Offer and negotiation
Can be done through a sole or general agency,
or privately
• Most homes are sold this way
• Buyers have a price range to guide them
• Many buyers prefer this method because
they don’t have to compete
• There is less pressure on the seller
• You can take your time to consider offers
and wait for the right price
• You can negotiate until you get a deal that
suits you
• You need to be sure of your asking price
• Buyers try to negotiate the price down –
you will probably get less than your asking
price
• The offer is likely to have
conditions included
Auction
Can only be done through a sole agency
• You don’t have to set an asking price (but
you do set a reserve, which is private)
• You have a set day for the auction
• A keen buyer may pay a top price to get
the home before it goes to auction
• Competition between buyers on auction
day may push the price up
• A sale at the auction is unconditional
• If the home doesn’t sell you can negotiate
with the bidder/s
• It is a very public process
• It’s not so suitable for average homes
• Only cash buyers can bid, which can mean
fewer potential buyers
• You may have advertising costs to pay
even if you don’t sell
Tender
Can only be done through a sole agency,
or privately
•
•
•
•
•
•
•
• Not so suitable for average homes
• Some potential buyers are put off by the
‘closed’ nature of tenders
• You may have advertising costs to pay
even if you don’t sell
You don’t have to set an asking price
It’s a private way to sell
Buyers put in their best offers
Offers are usually received by a set date
You don’t have to sell
You can sell early if you want
You can negotiate with some or all those
who put in tenders
Whatever way you decide to sell, ask your lawyer to check the offer, auction or tender documents before you agree to them.
Remember if there’s something you’re not happy with you can always negotiate.
Selling through an agent
When you enter into an agreement
with a real estate agency to market
your home, you are ‘listing your home’.
One agent may sign you up and be
your main contact, but once you’ve
listed your home all the agents in that
company can try to sell your home.
The agency works for you and their
skill and experience can make a lot of
difference. Talk with several different
agencies to find the one that suits
you best.
Questions to ask the agent
• are you a member of the Real Estate
Institute (MREINZ)?
• how long have you been in the
business?
• what qualifications do you have?
• what references can you provide?
(ask to talk to sellers they’ve worked
for)
• how well do you know this area?
• what can you tell me about
local trends?
• what buyers do you have on
your books?
• how would you market my home?
• what sort of buyers will it appeal to?
• how are you better than
your competition?
• what types of promotions do you do?
• what will you do if my home is slow
to sell?
• when and how will you report back
to me?
• what is your fee – can we negotiate it?
• would there be any other costs?
• what do you think my home could
sell for?
• why do you think that is the
right price?
• is there anything I should do to
the home?
Two important things
to remember
1.The value an agent puts on your
house is likely to be at least partly
based on trying to get your business
(are you likely to choose the agent
who gives you the lowest price?)
So how they will try to get the best
price for you is more important than
the price they quote.
2.You want to be sure the agency will
try to get the best price for you, not
just a quick sale. So look at their
approach and experience, not just the
sales figures.
Sole or general agency?
A sole agency is when you give one real
estate agency the exclusive right to try
to sell your home for a certain period.
It means you can’t list the property with
anyone else or try to sell it privately
during that time.
A general agency means you list
your home with several agencies and
can sell it yourself if you want. Only
the agency that sells the home gets
the commission.
You may get better service from a
sole agency because they have more
incentive to sell it. But we suggest you
only sign up for a short time, say one
month at a time. This will help keep
the agency ‘on it’s toes’, and it means
you can review their performance and
change the agreement, or the agency, if
things are not working out as you’d like.
Home buyers tend to shop around
so listing with one agency doesn’t
necessarily mean fewer buyers.
Listing agreements
Ask the agents you talk with for a copy
of their listing agreement. This is the
contract between you and the agency
setting out what the agency will do,
how your home will be sold and the
fees you agree to pay.
The agency will usually want to
restrict who can sell your home for a
certain period of time. But you can list
with more than one agent if you want
and you can retain the right to sell the
home yourself.
Agreements can vary quite a bit
between agents – and you can negotiate
what is in them. As with any other legal
contract, you should get your lawyer to
check the agreement before you sign it.
Before signing, check it includes
• your name and the agency’s name
• the correct details for your home
• the chattels that are or are not for sale
• how the home will be sold
• how and when the agency will report
to you (ask for weekly reports)
• the agency fees and costs.
Selling your home
47
Selling your home
48
Selling privately
Should you sell privately?
Where do you start?
There are good arguments for and
against selling your home yourself.
You need to find out as much as you
can before you make your decision to
sell privately or not. Start by talking with
your lawyer. They can advise you on the
process, prepare the documents you
need, help with the negotiations and
make arrangements for the payment of
the deposit.
Probably the biggest argument on
the plus side is that you’ll save on
the agent’s commission, which is a
substantial cost. However, you need
to be sure you can get the best price
doing it yourself, or it could be a false
economy. And don’t expect that doing
it yourself means it will be ‘free’ – there
will still be a number of costs involved.
The main drawback is probably the
time and effort involved. You’ll need to
be available to show people through
your home when it suits them and you’ll
need to be able to make people feel
comfortable and ‘sell’ the good features
of the home to them. You’ll also need to
organise advertising and promotions to
attract potential buyers.
Depending on your skills, it may be to
your advantage to get your lawyer or
someone else to handle the negotiations
for you. You could consider trying to
sell by tender, and have the tenders
addressed to your lawyer.
The Citizens Advice Bureau has
information on their website
www.cab.org.nz about selling your
house privately. It sets out the main
steps to follow.
There are also other websites – and
books – with information about how to
sell your home privately, written for the
New Zealand market.
Private sale companies
There are several companies who
specialise in helping people sell their
homes privately.
Some provide free or inexpensive
internet listings. Others provide a range
of services that might include listing,
advertising, ‘For sale’ signs, brochures
and phone answering. Packages can
range from $700–$2000 or more
depending on what you want to do.
You can find these companies by
searching on the Internet or in the
Yellow Pages.
Promoting your home
You will need to actively promote your
home. Some of the ways you can do
this include
• listing your home on the Internet
• advertising in newspapers
• distributing flyers in the
neighbourhood
• networking with friends
and colleagues
• arranging open days.
You need to be careful to tell the truth
about your home and answer all
questions honestly. If you don’t know
the answer, say so. If you mislead a
buyer over something you may have to
pay to put it right, the buyer could get
out of any agreement you’ve made, and
you could be sued.
Here are the main steps
1. talk with your lender about
your plans
2. seek the advice of your lawyer
3. prepare your home for sale
4. get your home valued
5. set your asking price – or a
tender date
6. put up the ‘For sale’ signs
7. arrange advertising and
promotions
8. consider and negotiate offers
with the help of your lawyer
9. arrange for the buyer’s deposit
to be paid to your lawyer
10. arrange settlement and
transfer of ownership through
your lawyer.
The listing contract
sets out your agreement
with the real estate
agency for a set period
of time, and may restrict
who can sell your home.
But you don’t have to sell
and can take the property
off the market whenever
you want.
Selling your home
49
50
Building and
renovating
Kiwis love to build and renovate. After all,
what could be better than creating a home that
has everything you want in it? It can be a lot
of fun, but it can be hard work too and things
don’t always go smoothly. Here’s a quick
overview to get you started and if you’d like to
know more come and talk it over with us.
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52
53
Here are a few things to think about
before you decide to build.
An overview of the building process,
including how loans work, getting
permits and consents, and your contract
with the builder.
What should I consider first?
What are the main steps?
56
Arranging your finance
There are different ways to finance your
project. Here we take a quick look at
your options.
Building and renovating
52
What should
I consider first?
Should you build or buy?
Sometimes the only way to get what
you really want is to build a new home.
But before you take the plunge here are
some of the pros and cons for you to
think about.
Here are some advantages
• you can get the home you want on a
section you like
• you can design the look and layout to
suit you and your lifestyle
• you can create the garden you want
• everything will be new
• you shouldn’t have to worry about
maintenance for some years
• you are not paying for décor and
furnishings you only want to change
• if you’re planning children,
newer areas often have lots of
young families.
But you also need to consider
• you get more house for your money
if you buy an existing home
• you need to think about resale, and
build in keeping with the area
• if the area is very new you can’t be
sure how it will turn out
• you’ll probably have to live further
out and commute to work
• it can take up to 10 years for new
areas to look established
• if there are no neighbours yet, could
they take your view, sun or privacy
when they build?
• it’s a big job and will require your time
even if someone else is managing the
project for you.
Changes in building law
There have been lots of changes in
building law so before you embark
on a home renovation or building
project check with your local
authority about what the latest legal
requirements are.
Should you manage
the project?
Unless you are experienced in building
or property development we suggest
you don’t. It’s a big job and there are
a number of pitfalls. You should still
keep an eye on progress, but leave
the responsibility for materials and
contractors to the experts. Otherwise
mistakes and delays could end up
costing you a lot of money, and you
could be legally liable if someone
is injured on the job. And often the
professionals can get a better price on
materials than you can.
Want to renovate?
Doing alterations can be as big a
project as building a new home and
the process is very similar, so the
information on the next few pages
can help you get started.
Doing major renovations can be
stressful. Ask yourself first if you are
prepared to live with the mess and
disruption, or even to move out for a
while if you have to. You also need to
consider whether the alterations will
add real value to the home or not.
Some things that can add value
• redecorating that makes a home feel
lighter, more spacious and cleaner
• work that cuts down on maintenance
• improving kitchens and bathrooms
• extra living space and indooroutdoor flow
• easy-care, attractive gardens
• simple fittings like heated towel rails
• better lighting and skylights.
Some things that may not
• renovations that are out of character
with the home and neighbourhood
• anything that takes something away,
such as turning 3 bedrooms into 2, or
making a garage into a games room
• adding unusual features or things
most people don’t want
• turning your home into the
most expensive home in the
neighbourhood.
1. Talk with us first
2. Decide what you want
3. Choose your designer
We’d like to help you achieve your
dreams, so come and talk with us first
about what you’d like to do. We’ll help
you work out what you can afford
and explain the ways we can help you
finance and manage your project.
Start by having a clear idea of what
you’d like to build. Before you spend
any money try to get an idea of what
it might cost to carry out your plans,
and decide if you can afford it. Visit
show homes or talk with an architect
or builder. As a quick guide, building
costs are about $1,460–$1,790 a square
metre and landscaping could cost you
around $200-$300 a square metre or
more, depending on the type of work
you plan to do.
You’ll need someone to help you turn
your ideas into plans. If you want
something designed especially for you,
you’ll need to employ an architect,
designer or draughtsperson. Some
builders supply design services and
some companies include the design as
part of a package.
The way home loans work when you’re
building or doing major renovations is
quite different – and you’ll need certain
clauses in your contracts for the section
and the builder.
How do ‘construction loans’ work?
When you are building or doing major
renovations, you need to get a valuation
done showing how much the home
will be worth when it is completed.
This helps determine the amount you
can borrow.
Once building is underway the loan is
paid in agreed stages. Your contract
with the builder may set out how much
is paid at each stage.
The building will need to be inspected
and certified at each stage to say the
work has been done (and therefore has
a certain value at that stage). If you’re
borrowing quite a lot of money you
may even need to get interim valuations
done by a registered valuer.
Whoever you choose you need to
• check their qualifications
and experience
• ask if they’re licensed (architects are
already covered, other designers
must be licensed by 2010)
• ask for references from other
clients and ask if you can see recent
examples of their work and talk with
the owners
• get a written estimate or quote
for their work, including GST and
any set costs
• ask about costs if you want to
make changes.
Cost guide
For a new home the design and
documentation ranges from 6%–15%
of the building cost. You’ll pay extra if
you want the architect to administer the
contract for you.
The money is usually paid direct to the
builder or supplier, rather than to you,
and your deposit is used first.
You will need to take out builder’s risk
insurance so that the home is insured
during construction.
What are the
main steps?
Building and renovating
53
Building and renovating
54
4. Choose a section
Visit the section at different times and in
different weather. Look for sun, views,
slope, shelter and soil quality. Check
after it’s rained and see if there’s any
sign of drainage or erosion problems.
If you’re buying in a subdivision check
if there are restrictions on things like
styles and materials you can use.
Make sure the home you want will fit on
the site. If the driveway will be shared
make sure you have legal access rights
and ask how the costs will be shared.
Ask the local authority (your council or
district office) for any information they
have on the area and the site.
Ask to see the district plan, which
covers things like roading and zoning
changes planned for the future.
It’s also a good idea to get a PIM (Project
Information Memorandum) report from
them before you buy. This gives you
all sorts of useful information about
erosion, flooding and other things that
could affect your home. To get one you
need a copy of the Certificate of Title
from Land Information and if possible a
design sketch (although your designer
may want to see the PIM before they get
started).
If you have any questions about
the suitability of the site, get an
engineer’s report.
Cost guide
• a PIM could cost you $150–$1,000,
or more, depending on the scale of
your project
• an engineer’s report could cost
$1,500–$4,000 or more.
5. Get your plans
and consents
Whatever the scale of your project,
you’ll need to get resource and building
consents from your local authority. Your
architect or builder may arrange these
as part of their contract with you.
The first step is to get some design
sketches and (if you don’t already have
one) apply for a PIM from the local
authority to find out if there’s anything
that could affect your project and what
you’ll need to do to get consent. Once
you’ve checked everything out, the next
step is to get detailed plans drawn so
you can apply for consent.
Getting consents can take a lot of time
– and it can be a costly process. You
may have to change and resubmit your
plans several times before you get the
consents you need. And if you want
to change things during the building
process you’ll need to get your
consents changed too. If you don’t
have the right consents the local
authority can make you change things,
or pull the building down.
Your consents will include a timetable
for inspection by the authority. Each
step must be approved before you
continue. After the final inspection
you need to get a Code Compliance
Certificate to say the job is completed
and meets the conditions of your
consent. Without it you could have
problems with insurance or selling the
home. If there’s a problem later on with
work that passed inspection you may
be able to seek compensation.
Cost guide
• consents could cost from several
hundred to several thousand dollars.
Building work usually costs more
than you plan for. You need to allow
at least an extra 20% in your budget
for the unexpected.
6. Choose a builder
If you’re using an architect they can
manage this process for you. If you’re
finding your own builder, ask people
you know for recommendations and get
several quotes.
You should ask
• for references from other clients
and ask to see recent examples of
their work
• about their qualifications
and experience
• if they’re licensed (all builders must
be licensed by 2010)
• when they can start and how long it
will take
• about guarantees and insurance
• for a detailed quote showing work
to be done and separate labour and
material costs.
Be wary of cheap quotes or
people who will give a fixed price
when others won’t. A cheap price is
not worth the heartache of shoddy or
incomplete work.
If you use a registered master builder
or a registered certified builder you
can expect quality work that carries a
guarantee on materials and labour.
Find the right builder
Choose a builder with a friendly
manner. Building a home is an
important project – it should be
fun too.
7. Check the price
8. Agree on a contract
9. Keep an eye on the job
A registered valuer can give you a
valuation based on your plans. You’ll
need this for your home loan, but it
can also help ensure you don’t pay
too much, or spend too much on
renovating an older home. If you’re
buying a package deal from a builder
or company, it may pay to get an
independent valuation to check that
you’re paying a fair price. Ask your
lender for a list of approved valuers.
You need to decide who will manage
the project and sign a contract with
your builder or architect before the job
starts. It’s very important to get legal
advice first. Remember if you don’t
like something in the contract you can
negotiate it.
Keep a diary and take photos. If you’re
unhappy about something raise it
straight away. If you want to change or
add something put it in writing. Both
you and the builder should sign it and
keep a copy (but remember changes
usually mean having to change your
consents too).
Another professional who can help you
check that you’re paying the right price
is a registered quantity surveyor (some
suppliers also do this job for free). They
work out the quantities of materials
required for a job. It can help prevent
cost overruns – or ending up with spare
materials you’ve paid for!
The contract normally covers things like
• a timetable for the work
and payments
• who employs the tradespeople
• who buys the materials
• who pays for fees and consents
• what happens if costs go up
• insurance and guarantees
• fixing problems and
handling disputes
• ending the contract if work is poor
• leaving things tidy when the
job’s done.
The builder is normally responsible for
other tradespeople. If you manage them
yourself you are liable for their health
and safety on the job.
Your contract with the builder will
normally set out agreed stages for
payment, providing the work is
satisfactorily completed. It should also
let you hold back some of the money,
usually 10%, until you are sure there are
no problems to fix.
Make sure you keep any guarantees
and instructions for the materials
used in your home. It’s a good idea to
have regular on-site meetings with the
builder so that any issues can be dealt
with early on.
Building and renovating
55
Building and renovating
56
Arranging
your finance
How can Westpac help?
One of the first things you’ll need to
do is make sure you’ve got the money
to carry out your plans. So if you think
you’ll need to borrow money, come and
talk to us early on so we can let you
know how much you might be able to
borrow and the best way to go about it.
If you’re already a customer you have
lots of options with your Choices home
loan including using your buffer, getting
a top up and setting up a separate
renovation account.
If you’re a new customer you can apply
for a Choices home loan to buy, build or
refinance your home, or to buy a rental
investment property. And you can apply
for extra to pay for renovations, or so
you have a reserve (a ‘buffer’) you can
call on for any reason.
Choices is a flexible home loan you can
do just about anything with. You choose
the options that suit you best, such as
the type of interest rate and how you
repay the loan. You can also do things
like pay extra off then take it out again,
take a break from payments, use your
loan account for everyday banking,
manage your money online and take
your loan with you if you move home.
How much can you borrow?
Cost overruns are common so
it’s important to track your project
budget. That way you can make
adjustments as you go rather
than find out later you can’t afford
to finish!
The amount you can borrow depends
on the value of your home, your project
and your ability to repay the money.
Here are some general guidelines on
what you may be able to borrow
• if you’re topping up your loan – up to
90% of your home’s current value
• for major building work – up to 90%
for fully managed contracts, or up to
80% for labour only contracts
• if you’re buying a section with
services – up to 90% of the land value.
Depending on the amount you want to
borrow, you may need to get valuations
at different stages of the project.
If you want to work out how much you
might be able to borrow and what it
might cost, try our online calculators.
What are your
finance options?
For major building work
If you’re building a new home or doing
major renovations you can apply for
a Choices construction loan. The loan
money is paid in stages to the builder as
building progresses.
During the project you only pay interest
on the money already paid out. This
helps keep payments low while you’re
paying other costs such as rent. You
don’t start repaying the loan itself until
the project is finished.
If you have plenty of equity in the home
you might not need a construction loan.
A regular Choices home loan might suit
you better.
For renovations
When it comes to renovating you have
several finance options depending on
the size of your project. You could
1. Open a renovation account – for
medium to large projects
This is a separate Choices home loan
account that can be interest only to
help keep costs down while the work
is going on. It helps keep your project
separate from your other finances.
2. Use your Choices buffer or
get a top up – for small to
medium projects
If you have a Choices everyday or
variable home loan and are under your
loan limit you can draw the extra money
out anytime without having to apply. Or
if you need more and meet our lending
criteria you can ask us for a top up and,
if approved, we can usually arrange on
the spot.
3. Use a credit card – for small
projects, or buying materials
and appliances
You could get the limit on your card
reviewed or apply for a new one just for
your project, so you can pay suppliers,
buy materials on sale and get up to 55
days free credit.
How do you apply?
Are you covered?
If you want a top up your
Choices home loan, just get in touch
with your personal banker or call us on
0800 177 277. We can usually arrange
it on the spot.
When you renovate or build there can
be extra risks your normal insurance
doesn’t cover so you need to check
what your policy covers. Usually
structural work, or work that needs a
consent is not covered and you’ll need
to get builder’s risk insurance. You
need to do this before work starts. It’s
important to do this at the start in case
you need a loan part way through –
because you can’t get a loan without the
insurance, and you can’t get cover part
way through the project.
If you want a new loan you can apply
at the branch, over the phone, online –
or we can come to you. We can normally
give you an answer within 24 hours of
getting all the information we need and
sometimes we can do it straight away.
The information we’ll need from
you will vary depending on the
finance option you choose but will
include details about your income,
assets and outgoings.
For larger projects and construction
loans we’ll need to see your building
contract, a valuation report, and the
sale and purchase agreement for your
section or home (if this applies). If you’re insured with us or get your
home loan from us we can arrange your
builder’s risk cover. There are some
conditions and exclusions that apply to
insurance applications. Please ask us
about these.
Building and renovating
57
58
Getting the
right advice
The best advice we can give you is…get good
advice! Involving the right people from the start
will make a huge difference to the outcome.
And that’s where we come in – we can help you
through the process and put you in touch with
others who can guide you, so talk with us about
your plans.
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65
Our job is to make the money side of
buying, selling or building as easy as
possible – here’s how we can help.
Hopefully this guide will help you avoid
the pitfalls. But if you do have a problem
here’s where you can go for help.
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How to go about choosing a good
lawyer, agent, valuer and other
consultants – and how much it
might cost.
A list of organisations that can
help with information or advice on
property matters.
How can Westpac help?
Who else can help?
What if there’s a problem?
Useful contacts
Getting the right advice
60
How can
Westpac help?
Practical advice and support
When you’re buying, selling, building or
renovating a home, our job is to make
the money side of things as simple and
easy as we can.
If you’re a first home buyer or it’s been a
while since you bought or sold a home,
we’ll be happy to help you through the
whole process.
We can
• let you know on the spot what loan
you could get and pre-approve you
as a borrower
• explain all your options, so you can
choose the loan that suits you best
• save you time by setting things up at
the same time including your loan,
insurance and new payments
• provide practical advice and support
when you need it
• put you in touch with other people
and services you need, like a valuer.
We also provide a range of services
for experienced property buyers
and investors.
Fast and convenient service
Our service is designed to fit in with
what you want and how you like to
do things.
If you want to talk about home loans
you can call into any of our branches,
without needing an appointment first.
You can phone us on 0800 177 277,
or reach us online at www.westpac.
co.nz any day of the week. And we can
arrange for one of our Mobile Mortgage
Managers to meet you at your home or
work at a time that suits you, including
afterhours or in the weekend.
We can handle things on the spot
and usually give you an answer
straight away.
Everything in one place
We can help with all your banking
needs. Here are just some of the ways
we can help
• banking and saving accounts
• loans and insurances
• financial and investment advice
• KiwiSaver and retirement plans
• specialised investment services.
Advice on
investment property
If you already own a home, have you
considered keeping it as an investment
and using your equity to buy another
home? We may be able to lend you up
to 90% of the money you need – and
show you how to use the equity in your
home to get started.
Ask us for a copy of our free Investors’
Guide to Property. It covers the main
things you need to think about first
including working out the return,
things to look out for and what being a
landlord means.
Wide range of investments
If you’ve sold up and are looking for
effective ways to invest we have a
network of professionally trained
investment advisors around the country
who can provide free advice and help
you select the right investments for
your situation.
Or if you have substantial assets to
invest you might be interested in one
of our more specialised investment
services. For example, we have a wide
range of managed funds from leading
fund managers, selected portfolios
where we do most of the work for
you, a broking service and full financial
planning services.
If you’d like to talk with one of our
investment advisors or get a free copy
of our Wealth Guide just call us on
0800 738 641.
Disclosure statements for Westpac
investment advisors are available free
from any of our advisors.
Lots of great ways to save
Protecting your home
Support for new migrants
Are you keen to save a bit more for your
deposit? Or perhaps you want to make
sure you have money put aside for
renovations or home repairs.
One of the essentials when you’re a
home owner is insurance (in fact having
home insurance is a condition of your
home loan).
Whatever you’d like to save for there
are lots of ways we can help, including
online savings accounts with high
interest rates, accounts where you earn
bonus interest if you save regularly
without taking money out, and even an
account with prize draws.
We can help with all your insurance
needs for your home, belongings and
other important assets including your
life and your income, as well as cover
for your loan payments. And if you have
your loan with us we can provide you
with the special cover you need when
you do building work or move home.
If you’ve just arrived here we can help
you get established. We are one of
the country’s oldest and largest banks,
and we’re even the bank for the
New Zealand Government. Our special
migrant banking team speak many
different languages and can help with
all your banking and lending needs,
including international banking services.
You can reach our migrant banking
team by phoning 09 306 1670, or
email [email protected]
If you’re looking for somewhere to
park a larger amount, between selling
your home and buying another one for
example, you might be interested in
one of our term deposits. Or you might
find a cash management account handy
– your money is on call, earns high
interest and you can access it online or
by phone.
And don’t forget KiwiSaver. It has some
great incentives to help you save for
retirement, but it could also help you
if you’re saving for your first home.
If you’d like to know more about the
Westpac KiwiSaver scheme visit us
online or call into one of our branches.
And if you’re planning to buy a new
home and keep the old one as a rental,
our home cover can help protect you
from the extra risks you might have as
a landlord.
If you’d like to know more about any
Westpac service, you can call us on
0800 400 600 seven days a week.
Getting the right advice
61
Getting the right advice
62
Who else can help?
You’ll need a good lawyer
It’s a good idea to involve your lawyer
early on – you should never sign an
offer or legal paper without asking them
to check it first.
When you’re choosing a lawyer, check
they have the right experience for the
work you want them to do.
For instance do they handle many local
residential sales, do they have any
expertise with investment properties
or retirement villages, do they handle
many building contracts?
If you choose a firm with several
partners it is more likely they will have
the experience you need, and there
should always be someone available if
you need them.
What will it cost?
Lawyers’ fees can vary quite a lot so it
pays to shop around and get several
prices. If the person you want to use is
dearer they may be prepared to match a
lower price, or offer you an extra service
such as a free Will.
Many lawyers charge by the hour, so if
you have an estimate rather than a fixed
price ask your lawyer to let you know if
their work is going to go over the price
they estimated.
You may hear about ‘do it yourself’ kits
so that you can do some of the legal
work yourself. You’ll find most lenders
(including Westpac) say the work
must be done by a qualified lawyer if
you want a loan because of the risks
involved. It’s complex work with a lot
at stake, so we suggest you leave it to
the experts.
Cost guide
To buy a home
• $700–$1,800 for legal fees, plus
• $200–$300 for costs such as land
transfer fees.
To sell a home
• $600–$1,200 for legal fees, plus
• $100–$200 to discharge the
mortgage.
So if you’re buying and selling at the
same time you can expect to pay
around
• $1,300–$3,000 for legal fees, plus
• $300–$500 for other costs.
To find the right lawyer
• ask friends or family if they can
recommend someone, or contact
your local District Law Society office
• contact several lawyers – ask if they
normally do residential work, what
their fees are and what the fees cover
• check they have a current
practicing certificate (this should be
hanging on the wall) and ask if they
have insurance.
This is really important
Get legal advice before
you sign any offer or
paperwork.
Real estate agents
Unless you’re buying or selling your
home privately you’ll need the help of
an experienced real estate agent. The
agent works for the seller and is paid
commission when the home sells.
If you’re buying, the agent’s job is
to show you through the home and
negotiate with the seller for you. Try to
find an agent who understands your
needs and tell them you only want to
see suitable homes. You don’t have to
use the agent who first took your call.
You’ll probably end up dealing with
several agents, so it’s a good idea to
keep a list of homes you visit and who
took you there (there’s a diary at the
back to make this easier for you).
If you’re selling, the agent is effectively
working for you and their skill could
make a lot of difference, so you need
to find out what experience they have
and how successful they’ve been. Be
prepared to negotiate with them over
their fee, especially if you are selling a
more expensive home.
To find the right agent
• ask others about their experiences
and for names of agents they
found helpful
• ask how long they’ve been selling
homes and make sure they’re a
Member of the Real Estate Institute
(MREINZ)
• ask about the types of homes they
have on their books and the areas
they cover.
Cost guide
If you’re buying there’s no fee. If you’re
selling you can usually expect to pay
• a base fee of around $500, although
not all agents charge this, plus
• a commission based on the amount
the home sells for – usually up to 4%
for a certain amount, then a lower
percent for the rest, or
• you may be able to negotiate a
fixed fee.
There may also be advertising costs.
A good real estate agent can give
you a lot of valuable information
about sales trends and prices, so ask
plenty of questions.
Registered valuer
All homes have a Rateable Valuation
or RV (this used to be called the
Government Valuation or GV) but this
is often not what the home will sell
for and it doesn’t include things like
carpets, curtains or appliances.
So you may find it advantageous to get
your own valuation report done by a
registered valuer. This will give you a
good idea of the true ‘market value’ of
the home – the price you can realistically
expect to buy or sell the home for. It
also provides useful information about
the property and its condition.
Ask the bank who they recommend,
because if you need a valuation
report to get your loan, you’ll need to
use a registered valuer approved by
the bank.
If you want a quick idea of the market
value without paying for a full report,
you might find QV’s (Quotable Value)
online e-valuer service at www.qv.co.nz
helpful. They do a range of reports from
quick valuations with no inspection
through to a full report.
To find the right valuer
• ask your bank or lawyer if they can
recommend someone
• make sure they’re a registered valuer
and have a current certificate (this will
usually be hanging on the wall)
• ask if they normally do residential
work and ask how well they know
the area
• find out what their fee is, what it
covers and how long it will take to
get the report.
Cost guide
• full valuation report $500–$800
• QV e-valuer quick reports $40
Getting the right advice
63
Getting the right advice
64
Building consultants
and engineers
Before you buy a home it’s a good
idea to get a pre-purchase inspection
done by a registered building
surveyor. You may want this to cover
weathertightness as well.
The report will tell you if there are any
potential problems and give you a good
idea of how much maintenance work
you might have to budget for.
Your bank, lawyer or real estate agent
may have someone they can suggest
(or check our ‘Useful contacts’ section
later on).
If there is likely to be any problem
with the land, for instance with a steep
section, you may also need a report
from an engineer. Choose one who
belongs to a professional association for
engineers (either IPENZ or ACENZ).
Before you choose someone talk to
them about the job and any concerns
you may have about the property. Ask
them what sort of things they will be
looking for – it’s a good sign if they use
a checklist.
To find the right person
• ask if they do many residential
reports and what they check for
• ask them about their experience and
qualifications for your type of job
• check they are registered and belong
to a professional organisation
• ask if they can give you references –
other clients you can talk to
• find out what their fee is, what it
covers and how long it will take to
get their report
• ask about possibly getting a short
report first (to save costs if you don’t
go ahead).
Cost guide
• building surveyor’s report $400–$1,150
• engineer’s report
$1,500–$4,000
These are only very rough estimates.
Report costs can vary a lot depending
on the property and what’s included.
Your local authority is also a rich source
of information on the home, the land
and the local area.
Getting good advice
You can help protect yourself by
making sure anyone you get a
valuation or report from
• has a good reputation
• belongs to a recognised
professional organisation
• has professional indemnity
insurance in case they make a
mistake that costs you money.
If you have a problem with
The real estate agent
An agent is not allowed to mislead you
– if you ask a question they must give
an honest answer. If you have a problem
try to resolve it with the agent or the
firm first and if you’re still not happy
contact the Real Estate Institute. They’re
currently responsible for the good
practice of real estate agents. They can’t
compensate you, but they can discipline
dishonest agents, and have a fidelity
fund that protects your deposit. If
you’re after compensation, you may
need a lawyer.
Please note there are proposals to
change the law, and there is likely to
be a new authority responsible for
licensing real estate agents and
investigating complaints.
Your lender or insurer
Most banks and insurance companies
have a complaints procedure you
can use. Usually you’ll need to talk to
the person you’ve been dealing with
first or write in with your complaint.
If you’re not happy with the outcome
you can contact a banking or
insurance ombudsman who will look
into your complaint and may award
compensation. If you’re not happy with
their decision you still have the right to
take legal action.
A valuer
Your best protection is to choose
a registered valuer, preferably one
your lender is happy with. If there
is a problem, discuss it with your
valuer first, or if that doesn’t help try
contacting the Property Institute of
New Zealand for advice. There’s a
Valuers’ Registration Board which
investigates formal complaints. They
can deregister valuers but can’t award
compensation, so if you lose money
because of the valuer you may need to
take legal action.
Your architect, building surveyor,
builder or engineer
If you’re unhappy with a consultant’s
work you need to discuss it with them
first. If you find you’re getting nowhere,
the professional body they belong to
may be able to help – most have a
formal complaints process.
If you’ve lost money because of a
consultant’s report you may need to be
prepared to take legal action.
If your complaint is about faulty work
some trade associations, such as the
Master Builders Federation, offer an
assurance that faulty work by their
members will be put right.
If your complaint is a ‘leaky home’,
the Weathertight Homes Resolution
Service may be able to help you resolve
the issue.
From 2010 certain types of building
practitioners (such as designers and
builders) will have to be licensed and
registered and a registrar will handle
complaints and penalties.
Your lawyer
If you’re not happy with something your
lawyer has done you need to discuss
it with them first – they should have
a complaints procedure you can use.
If you’re still not happy, contact the
Lawyers’ Complaints Service.
They deal with complaints about
service, conduct and charges and can
order compensation or other action.
Lawyers also have insurance in case
they make a mistake that costs you
money, but you may need to be
prepared to see another lawyer for
advice. If you’ve lost money because
of fraud you may be able to get
compensation from the Law Society’s
fidelity fund.
If you need to take
legal action
In most cases if you want compensation
you will need to take some type of legal
action. This doesn’t always have to
involve lawyers.
If the amount involved is small you can
ask for the matter to be settled by a
disputes tribunal. Tribunals are private
hearings in front of a referee. You can
find out more from your District Court.
Another option is to use an arbitrator or
mediator. If you do need to use a lawyer,
ask for an opinion first about your case
and get a price for the likely cost.
Some helpful hints
• act straight away – delays can alter
people’s memories and make it hard
to prove your case
• consider if it’s right to talk to the
person directly involved first, or to
the leading partner of the firm – but
be careful what you agree to (it could
affect your position later on)
• gather as much evidence as you can
and make sure your facts are right
• keep a written record of
everything, with dates and
names and even photos
• decide beforehand what you want the
outcome to be and be firm but polite.
What if there’s
a problem?
Getting the right advice
65
Getting the right advice
66
Useful contacts
You might like to start your research by visiting us at www.westpac.co.nz. Click on ‘Buying a house’ or try out our calculators
to see what you might be able to borrow or how much rent you could get for your home. Or you could really get things moving
by calling us today on 0800 177 277
Who?
How?
Where?
Consumers Institute
Their website has useful information for
people wanting to buy, sell or build a home.
04 384 7963
www.consumer.org.nz
Real Estate Institute (REINZ)
All licensed agents belong. The Institute
sets standards and can help if you have a
complaint about an agent. You can search for
properties and find helpful articles on their
real estate site.
Call 0800 473 469 and ask for your regional
office
www.reinz.org.nz
www.realestate co.nz
NZ Law Society and your District Law Society
They have offices around the country and
provide information on legal services,
including a range of online leaflets, There is
also a formal complaints service.
Phone your local District Law Society or
04 472 7837
www.lawsociety.org.nz
or to find a property lawyer visit
www.propertylawyers.org.nz
or for the Complaints Service call
0800 261 801
Property Institute of New Zealand (PINZ)
All registered valuers belong to the New
Zealand Institute of Valuers, which is part
of the Property Institute. The Institute
sets standards and can help if you have a
complaint about a member. Their website
lists members.
04 384 7094
www.property.org.nz
QV (Quotable Value)
QV provides valuation services and a wide
range of online property reports. You can also
get quick e-valuations online and look at sales
trends. They have offices around the country.
Phone your local office or
0800 164 444
www.qv.co.nz
BRANZ (Building Research Association of
New Zealand)
BRANZ is based in Wellington, with offices
in other centres. They provide a range
of building related services, including
publications for homeowners and a 0900
(pay) helpline.
Phone your local office or 04 237 1170
www.branz.co.nz
Department of Building and Housing for…
• ConsumerBuild
• Tenancy Services
• Weathertight Services
The department is responsible for building
law. The ConsumerBuild part of their website
has a lot of helpful information for people
who are building or renovating. The Tenancy
Services section has information for landlords
including average rents around the country.
Their Weathertightness service provides
information about leaky homes and has a
claims service.
Building services
0800 242 243
Tenancy services
0800 836 262
Weathertight services
0800 324 477
www.dbh.govt.nz
Master Builders Federation
Both organisations set standards for members’
work and can help if you have a complaint
about a member. You can also find a list of
registered builders in your area.
0800 269 119
www.masterbuilder.org.nz
New Zealand Institute of Building Surveyors
The national body for registered building
surveyors. The website has information
on pre-purchase and weathertightness
inspections, and lists members who can help
when you’re buying or building.
0800 113 400
www.buildingsurveyor.co.nz
IPENZ Professional Engineers
Most engineers belong to one or both of these
organisations. If you need an engineering
report they can provide names of suitable
practitioners. IPENZ handles all complaints
related to professional competence.
04 473 9444
www.ipenz.org.nz
Certified Builders Association of New Zealand
Association of Consulting Engineers (ACENZ)
0800 237 843
www.cbanz.co.nz
0800 500 150
www.acenz.org.nz
Who?
How?
Where?
NZ Institute of Architects Incorporated
Most architects belong to this organisation.
They have a range of publications on services
architects can provide and a list of registered
members on their website.
09 623 6080
www.nzia.co.nz
www.architecturenz.net
Banking Ombudsman
The Ombudsman helps if there are problems
with your lender that you can’t resolve by
other means.
0800 805 950
www.bankombudsman.org.nz
Insurance and Savings Ombudsman
The Ombudsman helps resolves disputes with
member organisations.
0800 888 202
www.iombudsman.org.nz
KiwiSaver
Inland Revenue provides information on
KiwiSaver. Find out how it works, how to join
and how it could help you buy your
first home.
0800 549 472
www.kiwisaver.govt.nz
Getting the right advice
67
68
Your tool kit
Here are some useful tools to make the process
of buying and selling a home a whole lot easier.
You can work out the costs, or a budget,
with one of the worksheets. The
different checklists will help make
organising things a breeze and the
scorecard is a really handy way to
assess and compare homes. Not
to mention the glossary which
turns the jargon into
plain English. Have fun.
69
70
75
What will it cost?
Buyer’s questions – to ask the real
estate agent or owner
71
76
Work out your budget
How does that home score?
72
78
Buying a home
Diary of homes visited
73
79
Getting ready to sell
Your handy A–Z
Worksheet
Worksheet
Checklist
Checklist
74
Checklist
Countdown to moving
Checklist
Scorecard
Record sheet
Glossary
Take this guide with you
when you’re looking at
homes to buy – that
way you won’t forget
something important.
Your tool kit
70
What will it cost?
Here are some of the extra costs you may need to budget for, based on a home worth around $300,000 and on average costs
for rates and levies.
One-off costs when you move
Average cost
Your costs
Deposit or equity
10% of purchase price
$
Real estate fees (if you’re selling another home)
$500 + up to 4% of sale price, plus GST (or fixed fee)
$
Legal fees to buy
$700–$1,800
$
Legal fees to sell
$600–$1,200
Builder’s report (pre-purchase inspection)
$400–$1,150
$
Engineer’s report
$1,500–$4,000
$
Valuation report
$500–$800
$
LIM report (for existing home)
$150–$350
$
PIM report (if you’re going to build)
$150–$1,000 +
Bank fee for home loan
Free – $500
Lenders Mortgage Insurance (if applicable)
Check with your bank
Your share of rates pre-paid by previous owner
$100–$3,000
$
Moving costs
$1000–$3,000
$
Phone connection
Free – $52 for existing line
Up to $500 for new line
$
Electricity connection (bond may be required)
Free – $150
$
Gas connection (bond may be required)
Free – $100
$
$
$
TOTAL
$
Ongoing costs – fortnightly
Home loan repayments
Based on a 30 year table loan at 8% a year.
$3.39 for each $1,000 borrowed
$
Rates ($1200–$3000 a year)
There may be a separate charge for water rates
$46–$115
$
Loan protection insurance
$21–$58
$
House insurance (replacement 150m2 home)
$25–$35
$
Contents insurance (for $50,000)
$30–$40
$
Repairs and maintenance ($3000-$5000 + a year)
$115–$190
$
Body corporate levy ($1000–$5000 a year)
For insurance and maintenance of common areas only –
you still need to cover costs for your own unit
$39–$190
$
Retirement village fees
$100–$250 or more
$
$
TOTAL
$
Other possible costs
New furniture and whiteware
$
Urgent repairs
$
Home security costs
$
$
TOTAL
$
How can I pay less?
Shopping around can help reduce your costs. Get at least three quotes, but remember the lowest price doesn’t always mean
the best deal. You still have to choose your advisors and suppliers carefully.
Work
out your
budget
How much is coming in?
fortnightly
monthly
$ income before tax
1st person
2nd person
Total
$
$
Combined total
$
How much is going out?
fortnightly
monthly
$ Expenses
Possible savings?
Total
$
$
How much is left over?
$
Salary, wages or drawings
Benefits or pensions
Commission, bonuses
Business income
Investments – interest, dividends
Rental income (after expenses)
Use this worksheet to help you work
out a budget. You don’t need to be exact
and spend hours on it. It’s just to help
you get a feel for what you can afford
– and you’ll need to gather up this
information to give us when you apply
for a home loan.
Other - such as regular overtime
Be honest with yourself. How much
more than your current rent or home
loan do you think you can really afford
to pay? Ask yourself where you can
save money. Can you pay off any debts,
reduce your credit card limits or cut
back on things like entertainment for
a while?
Other loans
Current home loan, rent or board
Student loans
Hire purchase
Overdraft – allow 2.5% of limit
Credit and store cards –- allow 5% of limit
KiwiSaver
Other regular savings
Insurances:
- Home, contents
Don’t worry if things look a bit tight.
Talk it over with us – we can help
you work out what you can afford to
spend on a new home.
- Car, boat
- Life, income, health
Household costs such as:
- Phone, Internet
- Power, gas, rates
- Groceries, food
- Clothing
- Healthcare
- Car expenses
- Home repairs
Other costs such as:
- Education, childcare
- Entertainment, hobbies
- Personal spending, gifts
- Cigarettes, alcohol
- Holidays
- Child support
Your tool kit
71
Your tool kit
72
Buying a home
Finding a home
Once your offer is accepted
Arranging the move
• Decide what areas you’re interested in
• Make a list of everything you’d like in
a home • Do a budget and gather up your
financial information • Talk to your lender – and ask about a
loan pre-approval
• Do your research – talk to agents,
read the papers and go online
• Find a good lawyer – ring several
for quotes
• Look at as many homes as you can –
and ‘score’ them
• Pay the real estate deposit to the real
estate agent
• If you are renting, give notice and
apply for your bond back
• Get quotes from several
moving companies
• Check your home and contents
insurance covers the move
• Arrange a moving time with the
other owners
• Contact power, gas, TV, phone and
Internet companies
• Redirect your mail and send change
of address cards
Before making your offer
• Register your interest if the place is
being sold by auction or tender
• Check the property out – use our
checklist and talk with the council
• Estimate the value – ask the agent
about recent sales and price trends
• Check local values with Quotable
Value – www.qv.co.nz
• Talk with your lawyer about
your offer (or the auction or
tender documents)
• Ask your bank what finance
conditions you need in your offer
• Check with your lawyer each time
before you sign or countersign
any papers
• Give a copy of the sale and purchase
agreement to your lawyer and lender
• Decide what sort of home loan
you’d like
• Arrange for a valuation report if one
is needed*
• Organise builder’s and engineer’s
reports if they’re needed*
• Get a LIM report and check the district
plan* (your lawyer usually does this)
• Arrange insurance for the new home
• Think about making a new Will
• Make a time with your lawyer and
bank to sign papers
• Set up any new bank accounts and
automatic payments needed
At settlement time
• Do a pre-settlement check of
the property
• Make sure you have your share of the
money ready to pay to the lawyer
• On settlement day check with your
lawyer that everything is going ahead
• After settlement check the statement
and papers your lawyer sends you
• Make sure you get a copy of the title
showing you are the new owner
• Check your loan and insurance
payments are going out as expected
*You may want to do these things
before you make your offer but most
people do them afterwards because
they don’t want to spend the money
until they know their offer will be
accepted. If you want to buy at auction
or by unconditional tender you’ll need to
do all your checks beforehand.
Getting ready to sell
Before placing your home on
the market
Inside your home
• Get everything spick and span
• Clean your oven, hobs and
extractor fan
• Make sure kitchen appliances work
• Get rid of clutter on benches and sills
• Clean out pantry, drawers
and cupboards
• Clean out wardrobes to create space
• Clean fireplaces and set
with pinecones
• Make sure doors and windows
open freely
• Clean your windows inside and out
• Get the carpets professionally cleaned
• Wash and polish wood, vinyl or
tile floors
• Do any minor repairs needed
• Replace broken lights and switches
• Repair dripping taps and any leaks
• Wash interior paintwork
• Clean showers, baths, basins
and toilets
• Replace old shower curtains
• Replace old or cracked toilet seats
• Put new towels in the bathroom
• Consider buying new bed covers
• Ask smokers to smoke outside
• Repaint tired stained paintwork
• Spruce up a tired kitchen or bathroom
• Replace or cover badly worn flooring
• Consider hiring items or art to update
the look of your home.
On the day the buyers
are coming
Outside your home
• Place flower pots around the entrance
• Paint and tidy up your letterbox
• Wash the paintwork
• Clean out the garage
• Remove any rubbish from the section
• Mow lawns and tidy up the garden
• Prune hedges and trees for more light
• Clean outdoor furniture
• Sweep paths and clean away
any moss
• Clean and repair fences, repaint
if needed
• Clear gutters and any blocked drains
• Plant plenty of colourful
‘instant’ flowers
• Water gardens regularly
• Fertilise lawns in the
weeks beforehand
• Create some off street or
covered parking
• Create an appealing outdoor
living area.
• Clean and tidy up
• Put any smelly rubbish out
• Sweep the entrance way
• Put vases of flowers in main rooms
• Leave lights on in dark areas or rooms
• Make sure the house is warm
in winter
• Leave some windows open
in summer
• Lock valuables away
• Make sure pets are outside
• Grind some coffee (for the aroma)
• Go for a walk – and take the dog
with you.
If the job seems too big, think about
getting professionals in to help.
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Countdown to moving
If you’ve been renting
• Give your landlord written notice –
at least 3 weeks (check your
tenancy agreement)
• Ask them if there’s anything you need
to do to get your bond back
• Apply to Tenancy Services to get your
bond back – your landlord has to sign
the form too
• Ask power, gas and phone companies
about getting your bond back
(homeowners don’t usually have to
pay a bond).
One month before
your move
• Phone several moving companies
for quotes
• Get quotes for your new house and
contents insurance
• Ask about insurance for the move too
• Contact power, gas, TV, phone and
Internet to arrange disconnection
and reconnection
• Arrange any home repairs or
other work you agreed to do before
you move
• List everyone you need to send
change of address cards to (eg.
friends, family, credit card companies,
magazines you subscribe to, Inland
Revenue, insurance and finance
companies)
• Start packing the things you don’t
use much
• Number boxes as you pack them –
and label them by room
• Cancel any automatic payments and
direct debits for your rent
• Set up new automatic payments and
direct debits for new bills.
Two weeks before
your move
• Redirect your mail at New Zealand
Post – change of address cards are
post-paid
• Make an appointment with your
lawyer to sign your documents
next week
• Get a forwarding address for the last
owners of your new home
• Ask the last owners to brief you
about the house and garden – things
like how the alarm works, where the
water turns off, what’s in the garden,
what the paint colours are
• Ask the last owners for contact details
of tradespeople who’ve worked on
the house.
One week before
your move
• Send your change of address cards
• Change papers or any other deliveries
to your new address
• Give your new address to your
landlord or the people moving into
your old place
• Arrange times for collecting keys and
moving in/out with the other owners
• If you have young children, let the
teachers know your children may
be unsettled
• Do a last check of the property you’re
buying – if there are any problems
talk to your lawyer.
Moving day
• Collect the keys to your new home
• Check what time the movers will turn
up and be there to let them in
• Check everything is gone from your
old home and arrives at the new one
• Clean up your old place and give the
keys to the landlord or new owner
• Leave a forwarding address for
your mail
• Don’t forget your pets.
Do it yourself or use
the professionals?
Ring several moving companies
to find out your options. Some
supply boxes for you to pack yourself.
If they’re packing, ask how they’ll
wrap your furniture. If you’re doing
your own packing or moving, check
if you’re insured.
Bright idea! Keep a list of the mail
you get each day, to help you work
out who you need to send change of
address cards to.
Buyer’s questions – to ask the
real estate agent or owner
Date:
Property:
Why are the owners selling?
How long has it been on the market?
How much buyer interest has there been?
What is the Rateable Valuation (RV)?
How much are the rates?
What are the properties nearby worth?
What have places nearby sold for recently?
What are the neighbours like? Do they have children, pets, noisy parties?
What facilities are in the area?
What are the schools like, are they zoned?
Is the house north facing (for sun)?
When does it get the sun?
What is the prevailing wind direction?
Is the home sheltered?
Is there noise from traffic, trains, planes?
Is there a danger of flooding or erosion?
Any major redevelopment plans for the area?
Are there any zoning restrictions?
What type of title does the property have?
Any covenants or easements on the title?
Any protection orders on trees or buildings?
Where are the boundaries?
Is the home suitable to renovate?
Could the section be subdivided?
Does the home need any urgent repairs?
Has this home been a ‘leaky home’?
Have there been any alterations?
Does all work have consents and certificates?
Have piles, plumbing, wiring been redone? When?
What heating and insulation does it have?
What fittings are being sold with the home?
Plus for an apartment
What are the body corporate and ongoing fees?
Is there a sinking fund (money) for new work?
What are the body corporate rules?
Any restrictions on use of common areas?
What safety and fire prevention features are there?
Could I work from here if I wanted?
Is there a live in manager?
Agent:
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How does that home score?
Home 1
Home 2
Home 3
Asking price
$
$
$
Rateable value (RV)
$
$
$
Rates
$
$
$
Address
Agent’s name
Number of bedrooms
Number of bathrooms
Does it have what I want?
Formal living areas
Separate dining room
Open plan family areas
Indoor and outdoor living
Fireplace
Separate toilet
Separate shower
Bath
Ensuite
Study or office
Good storage
Modern kitchen
Gas heating or cooking
Heating system
Security system
In a good/preferred area
View
Sunny
Sheltered
Private and quiet
Large or flat section
Established garden
Drive-on section
Garage or carport
Parking for friends
Swimming pool
Fences
Character
Low maintenance
Well maintained
Potential to extend or do up
Close to work
Public transport
Close to shops and cafes
Zoned for good schools
Sports and leisure facilities
Medical facilities nearby
Near family and friends
Other
How does that home score?
✔
X
?
✔
X
?
✔
X
?
Am I up for repairs?
Look for…
Floors
Ceilings and walls
Doors
Windows
Skylights
Under the house
Piles
Inside the roof
Chimney
Insulation
Natural light
Gas
Sockets and switches
Switchboard
Fireplace and heating
Central heating
Carpets
Curtains
Lights
Heaters
TV
Water pressure
Hot water
Extractor fans
Oven and hobs
Dishwasher
Cupboards
Wardrobes
Toilet
Shower
Bath and basin
Bathroom and laundry
Washing line
Roof
Cladding
Flashings
Exterior paint
Spouting and gutters
Air vents
Drainage
Access
Drive, paths or steps
Sheds, garages
Decks
Fully clad balconies
Fences
Noises
Smells
Fire exits
Security
Boundaries
Banks
Common areas for units or flats
Score
Uneven, rotting, spongy or damp, borer
Leaks, sagging, cracks, stains,
Sticking, broken handles and locks
Sticking, rotten, poor seals and catches
Leaking, won’t open
Dampness, leaks, gaps, pests, borer
Uneven, missing, rotten, borer
Leaks, holes, sagging, birds nests
Old, cracked
Missing or poor
Dark rooms
Poor flame or low pressure, not vented
Not enough or too old
Old or messy wiring
Not working or no permit
Not working or not enough outlets
Worn or stained
Need replacing
Not enough/need replacing
Not working properly
No aerial or poor reception
Poor pressure or leaking taps
Small tank, not insulated or restrained
Old or not vented outside
Need replacing
Needs replacing
Not enough or damp, sticking
Not enough or too small
Weak flush or poor condition
Weak pressure, poor condition or leaks
Needs replacing or leaking
Signs of mould or damp
Broken or missing
Rust, holes, leaks, cracked tiles
Rot, cracks, gaps, stains, no clearance
Missing or faulty, broken sealant
Needs repainting
Rust, holes, cracks, leaks
Not enough or blocked
Boggy, no storm water, prone to flood
Poorly lit or shared
Need repairs or subsiding
Poor condition, no permits
Need repair, rails, no consent
Signs of leaks or repairs
Need repairs, not on boundary
From traffic, planes, trains, neighbours
From industry, rubbish, water
Missing or need repair
Missing locks, catches or poor lighting
Issues with buildings, fences, trees
Signs of slipping or need retaining
Check they are well maintained
Home 1
✔
X
?
Home 2
✔
X
?
Home 3
✔
X
?
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Diary of homes visited
Date(s) visited
Agent
Name
Phone
Name
Phone
Name
Phone
Name
Phone
Name
Phone
Name
Phone
Name
Phone
Name
Phone
Name
Phone
Name
Phone
Name
Phone
Name
Phone
Address
Your notes
Your handy A–Z
Here are some very general plain English
definitions of some of the terms we use
in the guide.
Asking price
The price the person selling the house
would like to get – this is often not the
price they will get.
Asset
A major item you own, like a home, car,
boat or investment.
Auction
A way to sell where all the buyers are
in one place and make bids (offers)
until only one buyer is still bidding. An
auctioneer runs the auction. The person
selling usually sets a reserve price and
doesn’t have to sell if the bids are under
that amount. If you buy at auction
you’re committed to going through with
the purchase, so you need to check
everything out first and have your
finance ready, including the money for
your real estate deposit which is paid to
the auctioneer on the day.
Body corporate
A group that all the owners in a block of
flats or apartments belong to. It deals
with the running of the building and
shared areas like stairways, garages and
access ways.
BRANZ
Building Research Association of
New Zealand.
Bridging finance
A short-term loan so you can buy your
home while waiting for other money to
become available (such as money from
selling another place). Once the other
money becomes available it’s used to
pay back the bridging loan.
Building Act 2004
This law sets out standards and controls
for the building industry and replaces
the Building Act 1991. One of the main
changes is that building contracts now
come with an implied warranty that the
work will be carried out properly, the
materials used will be suitable and the
building will be fit for occupation. It also
introduces a licensing system and from
2010 certain work must be done or
supervised by a licensed practitioner.
Capital gain
The profit you make when the value of
something you own goes up. If you buy
something for $100,000 and it goes up
to $150,000 – the extra $50,000 is your
capital gain. Currently there is no tax on
capital gains on a home you own and
live in yourself.
Capital value
You’ll see this term on your Rating
Valuation (RV). It’s the total value of your
property, including land and buildings
but not chattels (things like light fittings,
carpets and curtains).
Capped interest rate
Westpac has a home loan where the
interest rate can go up or down –
but it can’t go over a certain level for
a set time.
Certificate of insurance
A certificate from your insurance
company to confirm that your house is
insured – your bank will probably ask to
see this.
Certificate of Title
This is the ownership record for your
property. It is an electronic record held
by Land Information New Zealand (LINZ)
It describes the property and shows
the legal owner of the land and any
mortgages or conditions on the title.
Chattels
The removable items that come with
your house such as carpets, curtains,
light fittings and sometimes furniture.
Code of Compliance Certificate
(CCC)
A certificate from your local authority
to say the building complies with
building consent requirements. Check
all buildings and alterations have a
certificate before you buy. The LIM (Land
Information Memorandum) should
contain compliance details.
Commission
The fee the seller pays the real estate
agent when the property sale becomes
unconditional.
Company title
If you buy a flat with company title, you
buy ‘shares’ that give you the right to
live there (and you have a ‘licence to
occupy’). The company administers and
maintains the block of flats or units.
Conditional agreement
A sale and purchase agreement with
conditions that must be met before
everything becomes final. Both the
buyer and the seller can put conditions
in the agreement. Buyers often ask
for conditions about checking the
Certificate of Title, and getting finance
or a builder’s report.
Conveyancing
The legal process when you buy or
sell property – including checking and
registering documents to transfer the
ownership over.
Covenant
A covenant is a record on the property
title of a legal restriction or agreement
the owner has to keep. For example you
might have to pay for fencing, protect
a native tree on your land, or can only
build within certain restrictions.
Credit Contracts and
Consumer Finance Act 2003
A law covering consumer credit
contracts. Among other things, it means
when you borrow money the bank must
disclose to you both your rights and the
bank’s obligations.
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Cross-lease
This is where there are two or more
homes on a cross-leased property. All
the owners own the land together and
each owner leases the land their home
is on from the others. All owners of
the common land must agree before
improvements such as paths, fences or
building alterations can be made.
Deposit
This term has two meanings when it
comes to buying a home. To the bank
it’s the amount you put towards the
home yourself. To a real estate agent it’s
a payment you give them once you’ve
agreed to buy the home (this money
goes to the seller when your agreement
becomes unconditional – or it’s returned
to you if the sale doesn’t go through).
Depreciation
This means how much the value of
something goes down as it gets older
or more worn. It’s a term insurance
companies often use.
Discharge of mortgage
This is what happens when you’ve
paid everything back. The mortgage is
discharged so the bank’s name is taken
off the title to your property and the
Certificate of Title is returned to you.
Easement
If an easement is recorded on the title
for your property it means someone
else has a right to use your property in
a certain way – such as the right to run
pipes or cables under your land, or to
use a drive or path. Or you may have a
right over someone else’s property.
Enduring power of attorney
A legal document where you give
someone the power to act for you if you
need them to, for example if you’re in
a serious accident and can’t look after
things yourself. There are two types –
one that covers your care and welfare,
and one for property matters.
Equity
The money you yourself have in your
home. It’s what you’d end up with if you
sold your home and repaid any loans
you owe on it.
Excess
If you make a claim on your insurance
policy the excess is the amount that you
have to pay. The insurance company
pays the rest.
Fidelity fund
A fund set up by a professional
organisation to pay clients who lose
money due to fraud or misconduct by
one of the fund’s members. Lawyers,
real estate agents and many other
professionals belong to fidelity funds.
Fixtures and fittings
Items that are considered part of your
home because they are permanently
attached in some way – by nails or wires
for instance (such as the oven or built in
cupboards or shelves).
Fixed interest rate
This means the interest rate is set for a
certain period of time and will not go up
or down during that time.
Floating interest rate
Where the interest rate can go up
or down as the market changes.
Sometimes called a variable
interest rate.
Freehold
This is the most common type of
property ownership. It means you own
the land and house with virtually no
restrictions on your ownership rights.
The term freehold is also commonly
used to mean that you don’t owe any
money on the home.
Home loan
The loan you get to buy your home,
where the home is used as the
‘security’ for the loan – meaning the
lender can sell the home if you can’t
repay the money.
Indemnity insurance
Insurance for a ‘market value’, meaning
replacement less an amount for wear
and tear. It is not usually enough to
rebuild a badly damaged home.
Instalments
Regular fortnightly or monthly
payments off your loan. Usually some
money goes towards repaying the
money you owe and some towards the
interest on the loan.
Interest
The amount you pay for money you
borrow, or what you earn on money you
invest. This is a percentage worked out
on the daily balance of what you owe or
have invested.
KiwiSaver
KiwiSaver is a voluntary, long-term
savings plan with government
incentives to help people save for
retirement. Savers can choose the
scheme they want to save in.
Joint tenancy
This is the most common way to own
a home together. It means you both
(or all) own the home together and if
one dies the other (or others) gets full
ownership no matter what your Will
says. Most couples own their homes
together this way.
Land Information
Memorandum (LIM)
A report you can get from your local
authority which sets out everything they
know about the property – things like
consents, rates owing, drainage and
problems with flooding or erosion.
Leasehold
With this type of ownership you lease
the land and pay rent to the landowner.
You own the house but your use of
the land may be restricted and your
rent can go up. You can sell the lease
when you want to move but you will
need to tell the landowner first. You
can get a Certificate of Title for your
leasehold interest.
Lenders mortgage insurance
A one-off insurance payment many
lenders charge if they lend you more
than 80% of the value of the property
(the percentage may vary). It’s to cover
the extra risk to the lender when you
are putting little or no money towards
the home yourself.
Licence to occupy
A licence to occupy lets you live in the
home and use the land but you don’t
own them. Many retirement villages
operate this way.
Loan agreement or
facility agreement
This is the contract between you and
the bank for the money they lend you.
Lo-Doc margin
A margin that your lender may add to
your interest rate if you get a home
loan without supplying full proof of
your income. For example if you’re self
employed and don’t have a current
profit and loss statement you may
be able to apply for a home loan by
making an income declaration instead.
The margin can be reviewed once you
supply full documentation.
Low Equity margin
A margin added to your Westpac home
loan interest rate if you need to borrow
more than 85% of the value of your
home. This can be reviewed once your
loan falls under 85% of the home’s value
– this could be because you’ve paid
some of your loan off or if the value of
the home goes up.
Lump sum payment
This is when you pay an extra amount,
say $1000, off your loan on top of your
normal payments. It can also mean an
amount you pay into an investment on
top of other regular savings.
Market value
The value of an asset (such as a home)
according to what the market will
pay – in other words the price a willing
buyer will pay a willing seller. A valuer
works out a market valuation by taking
into account recent sales of similar
properties or assets.
Mortgage
The legal document that gives the
lender ‘security’ and the right to sell the
property you’ve mortgaged if you can’t
pay your loan. It means the lender can
hold your Certificate of Title until you
repay the loan.
Mortgage protection insurance
This insurance protects you if you can’t
pay your home loan. The insurance
repays the loan if you die, or makes
payments for a time if you are
redundant or can’t work due to serious
illness for instance.
Mortgagee
The organisation that lends the money
and holds the mortgage.
Mortgagee sale
This is when the lender has to sell your
home to get their money back because
you can’t repay your loan.
Mortgagor
You are the mortgagor if you have
borrowed money to buy a home.
MREINZ
This stands for Member Real Estate
institute of New Zealand. All real estate
agents should be a member. The
institute provides training for agents
and sets the rules and ethics they
should operate by.
Possession
When you have paid for the home
and have the right to move in. Early
possession is when it’s agreed you can
move in before settlement date – you
might have to pay rent until then.
Principal
The amount of money you borrow,
before interest is added.
Priority amount
This is a term in the mortgage
document that gives the bank first right
to a certain amount of money if your
home has to be sold.
Private sale
If the home is being sold by the owner
instead of through an agent.
Project Information
Memorandum (PIM)
If you’re building you can get a report
from your local authority that sets
out everything they know about the
land and things that could affect your
plans, such as consents you’ll need and
problems like flooding or erosion.
Rateable Valuation (RV)
The valuation done for your local
authority. They use it to set your rates.
It gives you a general idea of the value
of your property. It used to be called the
Government Valuation (GV).
Reducing loan
With a reducing loan you pay a set
amount off the loan each payment, plus
interest. It means your payments are
much higher at the beginning of the
loan but go down as time goes on.
Registration
When your name and the mortgage
are added to the title of the property.
This is done electronically with Land
Information New Zealand, using Land
Online. Your lawyer must hold a licence
from LINZ to do the work.
Replacement insurance
This type of insurance could replace
your home – or lost or damaged items
with new ones.
Retirement Villages Act 2003
A law to provide more certainty and
financial security for residents who
buy into a retirement village. It sets
standards for village operators and
requires them to disclose important
information about the management
and finances of the village, amongst
other things.
Reverse mortgage
A home loan for seniors generally used
to help fund retirement. The special
feature of these loans is that they don’t
require regular loan repayments. instead
the interest and fees are added to the
loan and repaid later, usually when the
home is sold or no longer needed.
Sale and purchase agreement
This is the contract between the buyer
and seller of a property.
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Security
Security has several meanings. When
you get a home loan your home is the
security for the loan – meaning the
lender can sell the home if you can’t
repay the money. The term is also used
to mean certain types of investment
such as bonds or shares.
Settlement
Settlement means payment. When you
buy a home it’s the final stage when
the property changes hands. It’s the
bit when the money is paid, the new
owner’s name and mortgage go on the
title for the property, and the Certificate
of Title and the keys are handed over.
The day this all happens is called
settlement day.
Sole, joint or general agency
A sole agency is when the property is
listed with just one real estate company.
A joint agency is when it’s listed with
two or more companies – or if it’s listed
with a lot of companies it’s called a
general agency.
Statutory supervisor
A type of trustee – when someone is
appointed to look after the financial
interests of others, such as investors or
residents of a retirement village.
Strata title
This is when you own part of a building,
or airspace, instead of the land it is built
on. This can relate to units, apartments
and town houses. There is no lease,
but each owner belongs to the body
corporate, which manages common
areas like stairways and lifts.
Table loan
With a table loan you have a set
payment each fortnight or month.
At first most of the money goes
towards the interest you owe – but as
your loan starts to go down more of
each payment goes towards repaying
the loan itself.
Tenancy in common
This type of ownership is useful if you
are buying your home with friends
or relatives. You each own part of the
property, and if you die your share goes
to whoever you leave it to in your Will.
Tender
A tender is when all interested buyers
put in their offers (or bids) in writing for
the seller to consider. A closed tender
means offers must be in by a certain
date, and open tender means there is no
time limit. A tender can have conditions
in it, unlike making a bid at an auction.
Term
Term has several meanings. When you
get a loan it means the time you take
your loan out for – many home loans
are for 20 or 30 years. It can also be
how long your lease is for if you have a
leasehold property. And it can mean the
length of time an investment is for.
Unconditional
This means that the sale and purchase
agreement has no conditions attached
to it, or all the conditions have been
met. An unconditional agreement is
legally binding on both the buyer and
the seller. It means the home must
change hands on the agreed date for the
agreed price.
Unit title
You own your flat or apartment but
common areas (like stairways, car parks
and garages) are managed by the body
corporate – a group all the owners
belong to.
Vacant possession
This means that when you get
ownership and possession of your
home there will be no tenants living
there, and no lease giving someone else
use of the property.
Valuation by registered valuer
An independent assessment by a
registered valuer of the market value of
a home. A buyer may get one to help
them decide what to offer (and they
usually have to get one to get a loan). A
seller may also decide to get one to help
them decide what price they should
accept for their home.
Vendor
The person selling the property.
Weathertight Homes Resolution
Services Act 2006
This act was introduced to help resolve
disputes about leaky homes. It is
administered by the Weathertightness
Service of the Department of Building
and Housing who provide information,
assessment, claims and mediation
services. The Weathertightness Tribunal
supported by the Ministry of Justice
provides adjudication services if needed.
Will
The legal document that sets out your
last wishes and what you’d like to
happen with your property. If you
die without one it can take ages to
get everything sorted, and cost a lot
of money.
Welcome
Your home is one of the largest financial
investments you have – and it’s a pretty big
emotional investment as well.
Deciding to buy, sell or build is an important step,
and whether it’s your first time or you’ve done it
many times, there’s a lot to know and do – often in
a very short time.
This guide sets out to give you practical
advice to help everything run smoothly,
so you get the home you want and
avoid the pitfalls.
It covers the main steps, from deciding
what you want through to organising
your moving day. It also includes
helpful checklists so you don’t miss
something important.
And of course, we explain how home
loans work and how to apply them
in straightforward terms – especially
helpful if you’re buying your first home
or haven’t done it for a while! It can all
seem a bit overwhelming, but we’re here
to help you achieve your dream. And if
you’d like to find out how much you can
borrow we’re happy to meet when and
where it suits you – at home or work,
including after hours or weekends.
If you’d like to know more just get
in touch. You can call into any of our
branches, visit us at www.westpac.co.nz
or call us on 0800 177 277 any day of
the week.
The information is as up-to-date
as we can make it. But obviously
things change, which could affect
some bits of information – especially
prices and phone numbers. The guide
is only intended to provide you with
general information, and everyone’s
situation is different. You should always
seek independent legal and financial
advice before signing any agreement
or contract.
Home Buyer’s
and Seller’s Guide
Home Buyer’s and Seller’s Guide
Westpac
The content of this guide is general in nature and is not intended to constitute financial or legal advice. All opinions,
statements and analyses expressed are based on information and laws current at the time of writing and from
sources which Westpac believes to be authentic and reliable. Westpac issues no invitation to anyone to rely on this
material and intends by this statement to exclude liability for any such opinions, statement and analysis.
All applications for finance are subject to Westpac’s applicable lending criteria. An establishment charge may apply.
The information in this guide and the terms, conditions and pricing for Choices home loans and the other services
described may vary from time to time. Other service prices may apply. For full details please refer to our price list
brochure which can be obtained at any Westpac branch in New Zealand free of charge.
Insurance covers described in this guide can be arranged by Westpac and are underwritten by other parties. Full
details of the terms, conditions and exclusions for these insurances can be found in their relevant policy documents.
You can get a copy of the current disclosure statement for Westpac New Zealand Limited and a copy of the investment
statement for any securities for which an investment statement is required from any Westpac branch in New Zealand,
free of charge. Disclosure statements for Westpac advisors are available on request and free of charge from any
Westpac advisor.
Neither Westpac New Zealand Limited, Westpac Banking Corporation nor any other member of the Westpac group
guarantee the obligations of any insurance underwriter – or the performance of any unit trust, or retirement portfolio
plan or the repayment of capital.
References within this guide to non-Westpac websites and material are provided for your convenience and Westpac
accepts no responsibility for their availability or content.
Westpac New Zealand Limited
12379WT-1 01-09
Some things you need to know to make buying
and selling easier, and to help you get a great result.