Buying a New Zealand property from overseas can be difficult, but sometimes buyers have to purchase from a distance. That’s why it’s even more important to cover all your bases before signing the dotted line. Our team has created a checklist for buyers looking to purchase Christchurch property to help you follow New Zealand property purchasing best practice.
When looking for a property you love and really want to own, there are a few steps you should take before making an offer.
Buying a property – pre purchase checklist
- Investigate your finance options – Have a good conversation with a mortgage broker or bank about your finance options. This will help you determine your budget so you can look at properties in the right price bracket for you. Often you will be able to arrange for your loan to be pre-approved i.e. the financier agrees in principal to lend you a certain amount of money which will help you to go into sale negotiations fully prepared.
- Seek solicitor advice – Find yourself a good property solicitor to help advise you throughout the purchase process.
- Speak to your accountant about the tax implications of purchasing a property in New Zealand – this is particularly important if you’re intending to turn the property into a rental or have plans to resell in the future. As an overseas buyer the implications will be different than for a New Zealander.
- Know your Christchurch suburb – Each suburb has its own unique character and recreational facilities. Take a look at our suburbs guide to see which area of Christchurch suits you best.
- Find and inspect properties – browse our listings here. Once you find something you like, contact the relevant Sales Consultant to arrange a viewing or attend the Open Home. If you are unable to view the property yourself, you can arrange someone to view on your behalf, this could be a friend professional advisor.
- Request an information pack – our Sales Consultant can provide you with an information pack about the property which includes the proposed Sale and Purchase Agreement, LIM, Title, details of earthquake repairs and present insurance information. You can find more detailed information about the information pack on our Types of Real Estate Sales Methods page.
- Rateable Value (RV) – Every New Zealand property has what is known as a Rateable Value (RV), which is the value that annual rates (property taxes) are based on. These are going to vary from one Christchurch suburb to the next. The RV is not a reliable indication of real market value however there can be a general relationship between market value and the RV e.g. the average sale may be in the region of 10% more than the RV. You can search for specific property details here.
- Independent valuation – We recommend you commission an independent valuation for the property, to accurately determine the current market value. This valuation will include recent sales of similar properties in the area, to provide a benchmark for the valuation, as well as other criteria including “replacement cost” to build a home of similar quality and other key factors. Valuations must be conducted by a registered valuer.
- Title search – Land Information New Zealand looks after all land records for the Crown, including property titles, related land documents and survey records. These records show ownership history, and the exact measurements and perimeter of a property. Get your solicitor to check out the title before you make a property purchase so that you can ensure the seller has a legitimate right to sale. It is common for offers to be made conditionally, upon your solicitor’s approval of title.
- LIM report – LIM reports are available from the local city council. A LIM report is the council’s record of all information held against that property. This can be anything from building consents/permits to protected trees on the property. The LIM will be included in the information pack, if however a pack is not available a LIM can take up to 10 working days to obtain. Your solicitor would order this after a conditional agreement is accepted and it is common for offers to be made conditionally, upon the solicitor’s approval of it.
- Building inspection report– A building report is not always essential, but we highly recommend it to ensure you are aware of what you are buying. The report usually covers all aspects of the building structure and aims to identify any building defects that you should be aware of. It is common for an offer to be made subject to a satisfactory building inspection report. Building inspection companies can be found in the Yellow Pages.
- Building weathertightness – Since the mid 1990s and up to 2005 there were a considerable number of homes that were constructed in such a way that they leaked. Factors that caused this issue revolved around design, installation and materials. These houses are commonly referred to as “leaky homes” and it is essential you get a building inspection (as described above), including a moisture check, prior to purchasing. For more information on leaky homes, please check out the Ministry of Business, Innovation and Development’s Building website.
- Make an offer – Once your property checks have been completed and your professional advisors have approved the purchase, you can make an offer. Your offer will be handled by the Sales Consultant and must be in writing. Your offer can be “unconditional” meaning you agree to all terms set out in the Vendor’s Sale and Purchase Agreement and there are no additional conditions attached to the offer. Or it can be “conditional” in that your offer has some conditions e.g. it can be subject to a satisfactory building report or obtaining sufficient finance.
- Offer acceptance – If your offer is accepted, a contract will be signed by the Vendor and a deposit (usually 10%) is paid to the real estate agency, ideally on acceptance. If the contract is a conditional offer, all conditions must be satisfied by the agreed due date. Once these conditions are met, the offer is unconditional meaning that the sale is confirmed and the remaining money must be paid on the settlement date.
- Insurance – You will need to arrange building insurance and depending on your circumstances, contents insurance. You will need to clarify what items you require to be covered i.e. if you are going to rent the property out, you need to advise the insurer to ensure you have the correct policy.
- Request a pre-settlement inspection – Make sure you request a pre-settlement inspection, usually just before you make the final payment and take possession of the property. This is to ensure there is no unexpected damage and all the chattels mentioned in the contract are still there and in the same condition (with fair wear and tear excepted) as when you viewed the property prior to making your offer to purchase.
- Settlement day – Settlement is the day you would normally pay the remaining purchase price and you take possession of the property.
- Congratulations – you are the owner of your new home!
Consulting with land and property experts
When you’re assessing any investment opportunity, especially something as big as a property purchase, it’s important to gather all the relevant information to make an informed decision on whether to buy.
There are a wide range of agencies and professional consultants that can assist you with land information and property matters. Your first port of call should be your real estate agent. Cowdy & Co.’s Sales Consultants are experts in the Christchurch property market, and their local knowledge brings with it localised expertise and connections. We can ensure you’re in touch with the right people at the right stage of the purchase process to help with your decision making.
As well as your Cowdy & Co. Sales Consultant, you can also seek advice on land and property from:
- Registered valuers
- Property managers
- Resource management specialists
Many of these services are highly specialised and are only permitted to be carried out by authorised, registered professionals. For example, property valuations are only done by registered valuers.
Special considerations when buying property in Canterbury
All areas of Christchurch have been given a Technical Category (TC) classification following the Canterbury earthquakes. Each category generally predicts how the land will perform in an earthquake and also provide an indication of requirements for any new foundations in that area.