Buying in the Hot Housing Market in Wellington

Our experience is in line with what has been in the media recently.  Wellington’s housing market is hot!  What does this mean if you’re looking to buy…?

Shorter marketing timeframe

There is often a shorter marketing timeframe than there used to be.  This means that you need to decide very quickly if you want to make an offer on a property.  It also means that you have less time to do your homework about the property to make sure that you don’t have any unexpected surprises later. 

Pressure to be ‘unconditional’

The current high demand on properties means that a seller is often getting multiple offers on their property.  The better your offer is, the more likely you are to have your offer accepted.  It’s not all about price!

A seller will often accept an offer with a lower purchase price, if it is unconditional. 

What does unconditional mean?

An unconditional offer means that it is not subject to any conditions and you are legally obliged to proceed with the purchase. 

You need to be absolutely certain that this is the property you want to buy.  You cannot change your mind or raise any issues that you find out about the property later.  You need to make sure you have done your due diligence first.

Due Diligence

Before making an unconditional offer it is extremely important that you know all there is to know about the property first.  This will include:

• Having your legal advisor review the Agreement for Sale and Purchase documents;
• Having your legal advisor review the Title and explain this to you.  Often the title will restrict the way in which you can use the property.  It could even say that you can only paint your house purple;
• Obtaining a builder’s report.  Often a seller will provide you with a builder’s report.  If so, you should be very careful before you choose to rely on this report.  If you do intend to rely on a report provided by a seller, we suggest that you obtain legal advice about the risks in doing so first;
• Consider whether it is appropriate to obtain a methamphetamine ('P') or other drugs report to see if the property has been contaminated.
• Obtaining a LIM report.  Again, often a seller will provide you with a LIM report from the Council.  It is important that you ensure that the property (and any renovations like removal of walls, or a change of layout in a bathroom) have Council consent.  If not, this can cause problems with your insurance and your ability to obtain finance.
• Having your finance in place.  Your finance needs to be an unconditional offer of finance, not just a pre-approval.  This is because a pre-approval is still subject to the bank approving the house you are purchasing. 
• Having your insurance in place.  An insurance company will usually have additional requirements if the property you are looking to buy was built prior to 1920-1930.  No insurance = no finance from the bank.

Don’t get caught out

Buying a property can, for many, be one of the largest single transactions they will be involved in. Doing your due diligence will involve some cost.  But when you compare that initial cost of thoroughly checking things out with the overall investment and risks involved in buying a property, then the initial cost can clearly be put into context.

Doing your homework and getting the right advice will help you in making informed decisions.

This will go a long way to ensuring that you protect yourself in this hot market.