It’s time to spring into action if you want to buy a house

Saturday, 23 September 2023

A sluggish housing market often springs back to life with the warmer weather. As it does, the idea of house hunting might spring to mind. I hate to spring this on you, but if you are considering springing into house-buying action, it’s time to prepare.

OK, I’ll quit the spring fling now, but it’s true the market is starting to get going again after being in a kind of hibernation the past few months. If you want to buy at these lower prices, it pays to be ready to pounce if you can.

Here is our five-step guide to spring house hunting in 2023 to help you along. :

Spring-clean your finances

Have you been splurging on Uber Eats and streamers all winter? Indulged in a little too much online shopping, maybe? Now is the time to refresh your budget, and get back on track.

“The bank has no idea how you’re going to actually handle making your mortgage repayments – especially if you haven’t banked with them before. All they can really go by is what they see going on in those accounts,” says Mortgage Broker Ash Shergill. “Account conduct is one thing people don’t really focus on enough, and it’s the simplest thing to fix.”

A three-month spruce up of your bank accounts, paying down things like credit card debt, Laybuy and Afterpay debt, and frequent leisure spending might help. If you start now, you could be ready to go by summer.

Refresh your understanding of the process

House buying can be a complex process, with lots of steps, choke points, and pitfalls. If you’ve been out of the house buying and hunting mode for a few months, a little research and reading now could save you money and heartache down the track.

'I would recommend that you engage a broker,' says Wellington estate agent Shane Brockelbank, of the Professionals. 'If you go to the bank first and then go to a broker, the broker cannot look after you. So the first port of call would be to speak to a broker and get the ball rolling there.'

Brokers are paid for by the bank, so there's often no cost to you. Make sure to ask about any fees, or time frames the broker may have. If you're a good match, they will shop around to get you the best deal. They are also a great source of knowledge, and will often be happy to do some hand holding through the purchasing process.

Here are a list of resources that can help refresh your understanding of the house buying process:

• Settled.govt.nz – the Government’s no-nonsense guide to house buying in Aotearoa NZ, includes detailed information on ownership and title types.

• The First Home Buyers Club – this website is packed with information and guides on the process.

• From Renter To Owner, by Stuff Business Editor Susan Edmunds – a guide to getting on the ladder in the tricky Kiwi market.

• The First Rung podcast – Stuff Homed’s 6 episode podcast about how to buy a home.

Know what you need, not what just you want

'There's no perfect house out there,' says Brockelbank. 'A lot of people when they start looking, they're looking for a 10 out of 10. And reality is, most people probably settle somewhere around about a seven out of 10.'

You don’t need to compromise on the quality or solidity of a house, but you may need to compromise on things like having a garage and a big backyard, or the number of bedrooms. Being flexible will give you a lot more opportunity for choice.

'If you want three bedrooms, and it's a non-negotiable, it might mean you trade off on the garage.'

Do some research

It’s not the same market it was last autumn. It’s important to be clear-eyed about what the market is doing in any given month, in the areas you want to live – this can help guide you in your offers, or at auction. You can keep an eye on prices in those areas at a site like homes.co.nz, which shows asking prices, estimates, RVs and sale prices from whole neighbourhoods in its maps.

The QV House Price Index also gives an up-to-date sense of what the market is doing, and which way prices are trending.

Local estate agents may also be happy to give you a sense of what’s happening in a particular suburb. Once you’re on their radar, they may also contact you when appropriate houses come on the market for you to look at.

Be patient – but not too patient

Patience is good, buying the right house for you and your family can be hard, and your first offer might not be the one that hits. But as the market starts to rebound, there is such a thing as being too patient.

“What $100,000 can buy you today, could be a lot less in three or six months,” says Brockelbank. “Especially in Wellington and Lower Hutt at the moment, there's a scarcity of listings and with the market now trending upwards, my personal advice is the sooner you buy the better, because you're buying at a cheaper rate than what it will be a little later on.'

You want to make your offer stand out, and the best way to do that is to have as few conditions on your offers as possible.

'What we're seeing at the moment is people that are new to the market will be heavily conditioned with 4, 5, 6 conditions and they are continually missing out,' Brockelbank says. 'People who’ve been in the market for two or three months are now really clean with the conditions, they're the people that are buying properties.'

It’s not always easy to do, and will cost you a little more upfront to get builders’ and Lim reports, as well as your due diligence and finance sorted before you make an offer. But it is worth it and might even save you a few dollars on the house.

“Last week we had a house that had an unconditional offer, versus a house that had finance and builders and LIM conditions. The owner took $120,000 less because the offer was unconditional,' Brockelbank says. 'If you're an owner and you're looking at an offer of $1 million with conditions, or $950,000 cash unconditional, most people will take the 950 every day of the week.'

Happy house hunting! Don’t forget to take a copy of our Open Home checklist with you.