Finding the right house to buy can be a daunting experience, especially if you’re a first home buyer or looking for an investment property in an unfamiliar region. Serial renovators and winners of The Block NZ 2013 - Alice and Caleb Pearson - share their secrets to a successful house hunt.
The first step is always the biggest and when you learn the most. When we bought our first home in Auckland back in 2010 we soon realised how much there is to know and what we might have done differently.
Eight years later and after multiple renovation projects in Auckland – we suddenly felt like newbies when we decided to buy outside of our hometown.
Without a specific location in mind, we researched new regions with different property dynamics and local economies – without any local knowledge or contacts. In fact, many of the towns we were looking at we’d never set foot in! We were starting from scratch. It was like we were first time home buyers all over again. So here are our top tips for anyone looking for a new home.
Make time for the property search
On the whole there’s no better pay back than investing time to get a better result. I’m sure we have all seen friends decide to buy a house, even get a loan pre-approved – then get frustrated at the time it takes to buy a house and in some cases, give up.
Start by being realistic and know this will take time.
The more time you have and the more patient you can be – the better you can research, identify opportunities and know when to snap up the right property.
Work with your bank
It’s important to know what you can afford to spend on a house. We worked closely with Kiwibank to get our home loan for our first regional property – finding out what we could afford to borrow and getting pre-approved. Once we got to this point, we knew we could take our search more seriously. We could now act by putting in serious offers when we found opportunities.
Talk to your bank early, take them on the journey with you and make sure you spend your time searching for properties you can afford.
Work with real estate agents
Without a doubt, when you’re doing this as a rookie you need help. If you know someone knowledgeable that you trust – absolutely get as much advice as you can from them. But you’ll quickly learn you need to deal with real estate agents a lot throughout this process. They’re the experts on buying and selling real estate – and when you know how to utilise their knowledge, they can be a great asset in your search.
But not all agents are equal. They have different approaches and treat prospective purchasers differently. You need to find agents who will be patient and helpful.
My advice here is to get in touch with a lot of agents from different agencies and build relationships. Agents you can trust and who will work with you.
They can understand your requirements, often will come to you with new listings and help you through the process.
Do the sums
If you’re purchasing a home as a project for profit – you’ll need to know what your financial position will be at the end of your renovation. That your money has been well spent and has added value.
Even if it’s not a project, we’d recommend taking time to know you’re not overpaying and that if you had to sell, you’d get your money back.
Primarily this is about researching sale prices of comparable homes to become familiar with values. No two properties are the same, so this isn’t an exact science. But the more time you spend doing this, the more familiar you’ll become with knowing if a house is overpriced or represents good value. For homes that we’re considering, we work out estimated costs and estimated end sale price, then work backwards to make sure that we offer the right purchase price.
Check back against your strategy
Have a strategy and guidelines for what you’re looking for and then measure properties against this.
Make sure that you’re looking at properties that suit your situation and you keep in mind the bigger picture.
When we decided to buy a regional property, we went into it knowing it would take time. We weren’t just looking at one town with fresh eyes, we were looking at several. We started to search, research and learn – even prior to having our loan pre-approved – as we couldn't tell how long the search would take. In fact, it took six months of investing time every week. We selected a handful of towns to focus on and get familiar with and talked with agents, trying to spot opportunities.
Then when we found homes we knew could work for us, we took the next step and put in offers. Even when you get to this step, it can still take a lot of time. We tried and missed the mark on lots of properties. It’s frustrating and disappointing – especially the cute homes you get too emotional over. But we see it as a genuine step when looking for a property.
Missing out makes you realise what is a good buy and takes you a step closer to your goal.
So, if you’re looking for your next investment or buying a home for the first time, before you rush in and fall in love with a house, make sure you take a step back. Start with a clear idea on the realities of house hunting and keep an open mind throughout.
At any stage of your home buying journey, Kiwibank’s home loan experts are available to give you obligation-free advice and guide you through the process right to the end. For more information on buying a house visit Kiwibank’s five steps to buying your first home – whether you’re ready right now or it’s a little while away.