The Property Market Blog

Until you’re party to a property transaction, it’s unlikely you’ll ever have pondered how the settlement process works. If you’re buying or selling your house though, it’s an important concept to understand.

So what is settlement? Essentially, it’s the process of completing the transfer of a property from buyer to seller. Sounds simple, right? Not quite.

Luckily we have two of Martelli McKegg Lawyers’ highly talented property team – Tara Hurley and Louise MacCallaugh – on hand to provide some insights.

The Property Market (TPM): Can you give us a brief overview of what lawyers do as part of the settlement process?

Martelli McKegg Lawyers (MML): The process is anything but simple but, at a high level, your lawyer will do the following on your behalf:

-        Review the LIM report for the property you’re buying.

-        Complete the Sale & Purchase Agreement with your specific conditions.

-        Liaise with your bank to ensure all loan documentation is complete.

-        Liaise with the real estate agent and other party’s lawyer to see the transaction through.

-        Advise you on any issues relating to the property, as identified on the LIM, title or builder’s report, or in the other party’s conditions relating to the sale.

-        Take any action necessary to iron out issues with the property transaction.

TPM: Can you explain some of the terms that buyers and sellers are likely to encounter around settlement?

MML: No problem! Here are some common ones:

Conveyancing: This refers to the legal transfer of ownership of property from one person, business, or trust) to another, completed by your lawyer.

LIM: This stands for ‘Land Information Memorandum’ and is a document provided by the local council. It contains important information about a property’s rates, resource and building consents, drainage, protected trees or buildings and more.

Sale & Purchase Agreement: This is a single document that forms the contract between buyer and seller. It includes things like how much the property will be sold for and any conditions that need to be fulfilled before the sale becomes ‘unconditional’.

Unconditional: This term refers to the point at which all conditions to the Sale & Purchase Agreement have been met. Conditions might include things like buyer finance, review of the LIM and a builder’s report. For auctions, the sale is deemed to be unconditional as soon as there is a winning bid.

TPM: How long does the settlement process typically take?

MML: Generally, from signing the Sale & Purchase Agreement to settlement day, the process will take around four weeks. Of course, in many cases, the date is pushed out to suit the buyer and seller. Buyers (and banks!) are also much more cautious these days, so they will often want to spend a little more time checking the LIM and Builder’s Report before going unconditional.

We recommend that buyers and sellers allow a minimum of 10 working days from ‘going unconditional’ to settlement day – this allows enough time to process all documentation and deal with any bumps in the road along the way, with minimal stress to everyone involved in the transaction.

TPM: What traps should buyers and sellers be aware of in relation to the settlement process?

MML: The issue that typically throws a spanner in the works is timing – specifically, when the conditions are to be satisfied earlier than 10 working days from the date of the agreement, or when the buyer and seller want to settle in fewer than 10 working days. This can cause a number of issues, for example:

Before the Agreement becomes unconditional

-        Getting the LIM and building report, and having enough time to review and query these thoroughly.

-        Arranging finance – sometimes banks want to see builder’s reports or valuations before they will approve your finance

After the Agreement becomes unconditional

-        Getting loan documents signed. Many buyers think their signature on the loan application is sufficient but, in fact, there is a lot more paperwork to sign before the loan can be drawn down.

-        Likewise, if you’re planning to use Kiwi Saver as part of your contribution to the home loan, it usually takes at least 10 working days to get approval from your Kiwi Saver fund.

-        When buying through a company or a trust, if one signatory lives in another city it takes a little longer to get original documents signed.

-        When selling a property that’s part of a body corporate, under the Unit Titles Act 2010, the seller is obliged to provide a statement that clarifies body corporate levies and issues to the buyer within 5 working days before settlement.

Buying or selling your home is – for most of us – the biggest transaction we’ll ever make, so it makes sense to handle the process diligently, without rushing!

TPM: Is there anything else buyers and sellers should bear in mind?

MML: From a practical perspective, neither party should assume that settlement can take place early in the day (i.e. before 12pm). The reason for this is that it takes time to liaise with the bank and one another’s lawyers. If you allow plenty of time on settlement day for the transaction to complete, you (and your movers!) won’t be waiting around for the keys to be handed over.

Another practical consideration for buyers is a pre-settlement inspection. If there has been damage to the property since you first inspected it, you’re in a much better position to resolve any issues before the property settles.

The most important thing is to keep your lawyer informed every step of the way – that way they can ensure there’ll be no nasty surprises and make the whole experience much less stressful.

About The Property Market

The Property Market is a full service real estate agency built to deliver a better experience for buyers and sellers. Think real estate, only reinvented.

• Our real estate agents operate within a 20 minute radius of Freemans Bay.
• Our real estate agent commission rates are innovative and competitive.
• Our focus on customer service is second-to-none.

Check out our latest listings and, if you’re thinking of selling your house, give us a call.

About Martelli McKegg Lawyers

Martelli McKegg Lawyers provides legal advice to help you achieve your personal and business objectives.

Our approachable Auckland-based lawyers deliver prompt and practical advice, at competitive rates and in plain language. We provide tailored solutions to your legal problems.  We help clients throughout New Zealand ranging from private individuals and small business owners to some of Australasia’s largest commercial entities.  Learn more at www.martellimckegg.co.nz

If you’re selling your house, you – and your real estate agent – have more than likely put some careful thought to how it should be marketed. But have you considered the importance of mobile search?

One of the most exciting recent trends in real estate is the move to mobile property search. While the fact that around 90% of a buyer’s property search is done on the web is well-documented, it now seems that ‘at your desk’ research is fast being replaced by searches carried out ‘on the go’.

Neilson’s 2012 Real Estate Market Report shows that, in New Zealand, more than a quarter of those on the hunt for their next home had accessed a real estate website via their smartphone over the last year. Impressively, this figure was more than triple that for 2011.

This trend has already been picked up by the two largest real estate listing sites in New Zealand. TradeMe Property and Realestate.co.nz both have Android and iPhone apps that let prospective buyers search, save and compare more easily from their smartphone or tablet.

Internationally, CrumbTracks is another clever example of the way mobile technology is transforming property search. This free iPhone app lets you store information in a smartphone-based file for each property you visit. You can add photos, videos, notes and likes/dislikes about each property to its file, and then review and compare them over a glass of wine at the end of the day. Much more civilised than poring over a notebook full of scribbles, right?

For house hunters, the upshot is that it’s becoming even easier to pick and choose from the latest listings – meaning buyers are likely to become more and more dependent on mobile sites to search, save and compare in future.

But what if you’re selling your house?

For sellers, mobile search should be influencing the way you think about how your home is marketed.

In a blog post on Unconditional.co.nz, Paul Mackenzie – Marketing Manager for Realestate.co.nz – says “We are aware of several buyers who have found and purchased their home for sale solely through using the mobile app. People are turning up to open homes guided by the apps with a schedule fully planned of where they are going and what they want to check out.”

That being the case, it begs the question – does your real estate agent’s website translate easily onto a mobile device? Even more importantly, are their online listings easy to search, view and save via your smartphone? With nearly a third of buyers searching via mobile, you’d want to hope they are.

About The Property Market

The Property Market is a full service real estate agency built to deliver a better experience for buyers and sellers. Think real estate, only reinvented.

• Our real estate agents operate within a 20 minute radius of Freemans Bay.
• Our real estate agent commission rates are innovative and competitive.
• Our focus on customer service is second-to-none.
• We offer a range of clever online marketing solutions, including a mobile-friendly, personalised website for your property.

Check out our latest listings and, if you’re thinking of selling your house, give us a call.

A real estate agency’s job is to secure the absolute highest available price for a property and transact the deposit.

Say then, the purchaser can’t find the balance of funds to settle the purchase, why do you still have to pay the commission fee to your agent?

Thankfully these sorts of situation are few and far between and usually arise for unusual and unforeseen circumstances like the purchaser dies or goes bankrupt.

There is very little any agency can do to control or foresee these sorts of situation and in fairness, our job is done once the hammer falls or the agreement is dated and the deposit is paid.

That means the agent’s commission fee is still payable even if the purchaser can’t find the balance of funds and the sale doesn’t go through on settlement day.

However, the vendor gets to retain the purchaser’s deposit, minus the agent’s fee. They can then go on to sell the property again for an equally brilliant - if not better - price to another more deserving buyer.

The best an agent can do is make every effort to ensure that purchasers are genuine – by requesting a copy of their drivers licence as well as their personal contact details and their lawyer’s contact details. Plus, by the time auction day rolls around or purchasers are ready to put in an offer, a good salesperson has usually built up a relationship with buyers so they’ve got a good idea whether or not they’re the real deal.

About The Property Market

The Property Market is a full service real estate agency built to deliver a better experience for buyers and sellers. Think real estate, only reinvented.

• Our Freemans Bay real estate agents operate within a 20 minute radius of our office at 60 College Hill, Freemans Bay.
• Our real estate agent commission rates are innovative and competitive.
• Our focus on customer service is second-to-none.

So, if you’re thinking of selling your house, give us a call.

The decision to sell your house is a huge one. So it’s not surprising that, after committing to doing so and appointing a real estate agent, most vendors can’t wait to get cracking.

Many real estate agents will share your hunger for action – they’ll sign you up and get you listed in less time than it takes to say ‘Now, where’s that LIM report’?

While this kind of ‘seize the moment’ approach may seem like a grand idea at the time, here at The Property Market we think it’s worth taking a little longer to get things done properly.

We’ve found that by spending a couple of extra days to perfect the marketing and get a complete understanding of the property, we can actually sell your house faster and for a better return.

Our typical ‘getting to market’ process takes seven days. So, what extra value do we deliver in that time?

1. The opportunity to have our agreement reviewed independently.

Like all real estate agents, one of the first things we do is give you an agency agreement to sign. This sets out what you can expect when selling your house with us.

However, in a break with industry tradition, we encourage you to take the time to get our agreement checked out by an independent expert before you sign. We do this because we understand that selling your house is a big decision and we want you to feel confident about trusting us to get the result you want.

2. A better understanding of your property.

We order the LIM report as soon as you commit to listing with us. This gives us plenty of time to study the LIM and property title thoroughly and come back to you with any questions before we start talking to buyers and actively selling your house.

3. Top notch marketing.

We allow three working days to have your property photographed. This means we have an extra day up our sleeve if weather conditions aren’t ideal, and plenty of time to review all of the images and choose those that best represent your home’s strengths.

Vendors and buyers alike love the fact that we offer a personalised website for each property – the extra time we take to prepare the marketing allows us to set up the website address (using your property’s street address) and get the website live.

Unlike most real estate agents, we also give you the opportunity to review and approve all of the marketing material before it is produced. That means you can be 100% happy and confident about how your home is being presented to buyers.

By day six, we have a great relationship with you, a thorough understanding of your property and a marketing campaign that will knock the socks off potential buyers. We’re going to market in a position of strength which, in our experience, makes all the difference to the end result – and who doesn’t want that?

Want to know more about getting to market the right way? Give me a call on 09 965 3656 or drop me a line via antonia.baker@thepropertymarket.co.nz

About The Property Market

The Property Market is a full service real estate agency built to deliver a better experience for buyers and sellers. Think real estate, only reinvented.

• Our Freemans Bay real estate agents operate within a 20 minute radius of our office at 60 College Hill, Freemans Bay.
• Our real estate agent commission rates are innovative and competitive.
• Our focus on customer service is second-to-none.

So, if you’re thinking of selling your house, give us a call.

In recent years the trading landscape has changed dramatically for New Zealand’s real estate industry. Today’s market is moving towards a much more open and transparent model and, here at The Property Market, we’ve made no bones about the fact that we think the traditional role of real estate agents needs to change dramatically too.

Changes in the industry.

Key amongst the changes to the way we buy and sell houses in this country is the Real Estate Agents’ Code of Conduct, introduced three years ago.

This was re-released in April with a number of updates, including important clarifications around how real estate agents must engage with their clients – mainly by being proactive, fair and honest in all respects.

Of course it’s much easier to keep the industry honest when online services like Terranet, Council websites and even Google Earth mean buyers have access to more information than ever before. Today’s buyers are less reliant on agents to bring them up-to-speed on property information and, instead, expect them to add value in other ways.

Banks are also much more stringent about conditions on borrowing too, meaning there’s no room for incorrect, misleading or omitted information.

So, what does this mean for real estate agents?

More importantly, what does it mean for you when buying or selling your house?

Frankly, it depends how service-oriented the agent you’re dealing with is (or to what degree they’re just in it for the easiest real estate commission fee).

If they’re moving with the times, they’ve probably already recognised that their role is more than ever about listening and working proactively to create a successful agreement between buyer and seller, rather than simply providing information and haggling.

Unfortunately, in my opinion, that proactive mindset is sadly lacking in many of the mainstream players – and that little detail is at the heart of what makes The Property Market different to your garden variety agency.

We see our role less as traditional ‘sales people’ and more as account managers, consultants, sounding boards and coaxers. We’re there to add value by getting to the maximum possible sale price quickly, with the least amount of hassle for all parties to the transaction.

Getting that right takes a special ability and commitment to negotiating proactively and honestly with both buyer and seller, rather than simply driving expectations up on one side of the deal and down on the other.

You’ll see evidence of this approach on the very first page of our Agency Agreement, which gives a clear indication of what you can expect from our endeavours on your behalf. Unlike most real estate agents, we also invite you to get our Agency Agreement checked out by an independent third party before you sign… because that’s only fair, and (like true advocates of our industry’s Code of Conduct) fair is what we do.

Of course, it’s not just what we say about our approach that’s important – it’s what our customers reckon about it too. Here are some of their thoughts.

About The Property Market

The Property Market is a full service real estate agency built to deliver a better experience for buyers and sellers. Think real estate, only reinvented.

• Our Freemans Bay real estate agents operate within a 20 minute radius of our office at 60 College Hill, Freemans Bay.
• Our real estate agent commission rates are innovative and competitive.
• Our focus on customer service is second-to-none. So, if you’re thinking of selling your house, give us a call.

As the days get shorter, many home owners put thoughts of selling aside. After all, winter’s the time when real estate agents pine for summer conditions, buyers stay home and prices plunge until the sun begins to shine again… Right?

Actually, winter can be a great time to sell your home – providing, of course, that you have a quality property in a sought after location. Why? For a few good reasons:

Less Competition
Generally speaking, there are fewer houses on the market in winter. If you’re a seller that means less competition from other properties. Quite simply, if there aren’t as many houses for sale in your suburb, buyer demand will concentrate around the few properties that are available – including yours.

Stronger Prices
For quality properties, the concentrated demand that comes with a shortage of listings will often drive prices up. This is particularly true when it’s already a tight ‘seller’s market’, as is currently the case in many parts of Auckland.

Reduced Marketing Spend
With fewer properties on the market, there’s not just less competition on the ground, but also in the real estate listings. So, if you’re selling your house in winter, you may get away with spending less on advertising, while at the same time being found more easily.

The ‘Warm, Dry’ Edge
Showing a home that is well insulated and heated in winter is a huge competitive advantage – particularly with older houses. If buyers are currently living in a property that is cold and damp they will place a premium on a home that is warm and dry.

Only the Committed Venture Out
When it’s miserable out, only motivated buyers do the open home rounds. That means your real estate agent is less likely to have nosey neighbours taking a gander, and more likely to be dealing with qualified buyers. Now that’s got to be a benefit, right?

So, if you’ve been thinking of selling your house, don’t give up just because it’s winter. Talk to us about we can get a red hot price out of the chilly season. About The Property Market The Property Market is a full service real estate agency built to deliver a better experience for buyers and sellers. Think real estate, only reinvented. · Our Ponsonby real estate agents operate within a 20 minute radius of Freemans Bay. · Our real estate agent commission rates are innovative and competitive. · Our focus on customer service is second-to-none. So, if you’re thinking of selling your house, give us a call.

As we roll through October the housing market trends which were published this week have, for the most part remained unchanged. The market is still firmly leaning towards sellers as we mentioned last month.

Tony Alexander, chief economist at the Bank of New Zealand this week released the October BNZ REINZ Residential Market Survey. While he noted no major changes in trends over the past month, he did present an interesting finding: The numbers of investors looking at real estate is rising.

This finding also reflects what we here at The Property Market have been seeing when we show homes. That there are in fact, a rising number of investors active within the market looking to buy rental properties for investment.

What does this mean for you?

For buyers:

Unfortunately it’s not particularly good news for buyers. With greater numbers of investors appearing, there will be greater competition for the stock of residential property currently available. This will affect first home buyers, mainly because investors tend to have deeper pockets and may be prepared to pay more. Investors tend to have their finance established before making offers and they may also have greater equity, which pushes up the price they can afford to pay.

For sellers:

However the increasing number of investors is definitely good news for sellers. The main benefit to sellers is a much wider pool of enquiries for every house on the market. The result of this is greater competition for the available properties and quicker buying decisions.

We help you analyse the news for the real estate market by sending you summary of important updates that affect our business, and your property:

Tony Alexander, the Chief Economist at the Bank of New Zealand last week released the BNZ-REINZ Residential Market Survey for September. His message is that it is still, for the most part a seller’s market.

Hooray! If you’re selling your home, you should achieve a good price; buyers are queuing up and we’ve seen some sales significantly over-asking price recently.

What does this mean for buyers?

We know the property market and when you work with us, we do our best to give you the depth of our experience and tips of the trade to help you create the best outcome for your personal situation.

If you’re a buyer in the current market, here are a couple of key bits of information that you can use in your negotiation:

1. Always ask for the Sale and Purchase Agreement to be made up on the 9th Edition. This is the latest version of this document and it provides a greater level of protection and transparency for buyers, including a building inspection with a 10 working day timeframe as a standard clause.
2. If you find a property you’re interested in buying but you need an afternoon to think it over or some time to talk to your solicitor, ask the salesperson to prepare a draft of the Sale and Purchase Agreement. Why? By making this request, you are sending a very clear signal that you’re seriously considering the property and it obliges the salesperson to come back to you if anyone else makes an offer in the interim. This buys you time and with no risk or cost to you and because it’s only a draft version of the agreement, it cannot be signed by either party.

So, even though it’s a seller’s market (and this isn’t likely to change anytime soon), there are still things buyers can do to protect themselves.

If you need any guidance throughout your buying process, give us a buzz. We’re always happy to assist if we can.