Halo Financial and their financial and property expert partners summarise how the property buying process works in New Zealand.
Step one: Find the right property
If you possibly can, we recommend spending some time in your chosen new corner of the world before you buy your property overseas. Of course this may well be difficult, given the often significant travel distance to New Zealand, but if possible it’s a good idea to spend some time in the country in person as well as looking for properties on the internet. There’s no substitute for the real thing!
Step two: Visit the property, the area, and any alternatives
There are so many benefits to visiting your chosen property (or shortlist of properties) before you make a full commitment – as this will ensure that you know exactly what you are paying for. You can assess every aspect of the property in advance, as well as speaking to your neighbours and checking out the local area.
Step three: Ensure everything is in place to make an offer on the property
It’s so important to make sure that you have all your financial considerations covered before you make that final offer on your New Zealand property – this includes making sure you can definitely get the mortgage you need to purchase the property, or have the cash ready, and ensuring you have the funds to cover all the other payments required on top of the actual purchase price.
Bear in mind that these payments are likely to be international transactions and will be subject to exchange rates, which can change significantly between the time of finding a property to the offer stage, and to again to the final purchase. Consult a currency specialist to find out how you can protect your payments from currency market uncertainty and make the most of every payment you need to make internationally. Find out more about the effects of exchange rates in Money Matters.
Step four: Get the experts on board and make an offer
Your property agent will usually be able to negotiate the best price for your New Zealand property for you to ensure that you get the best deal. They will also be on hand to discuss terms and make sure you have answers to any of your questions.
You will need to hire an independent solicitor to help ensure you are aware of the different legal aspects of the purchase and the nuances of the New Zealand property purchase process. They, alongside your estate agent, should help you receive the best possible deal. Once the vendor has accepted your offer, it’s important to make sure that you have everything in writing as well as verbally, and all the relevant documentation completed, copied, and collated.
Step five: Surveys and checks on the property
Working with an independent solicitor who is familiar with the New Zealand property market will ensure that you can get all surveys and inspections on your chosen property conducted accurately and appropriately. This will ensure that you can pull out of the deal if any specific issues arise – and you will usually have a certain amount of time to do so without losing your deposit. Once this has been completed you can move ahead to sign the Title Deeds – remember that once you have signed, you will not receive your deposit back if you pull out of the property purchase.
Step six: Completing on your New Zealand property
You will need to use the time before completion to ensure that you have obtained the necessary insurance and paid any necessary fees. It’s also a good idea to speak to a tax professional during this time to make sure you have everything covered for the New Zealand market in particular. Once you reach completion date, your funds will be transferred to the sellers and you will receive the keys to your new home.
Step Seven: Due diligence
Once you have made your offer, you will usually have between 30 and 60 days to ensure all is correct and in place before you move ahead with the purchase. It’s always important to make sure that you have your trusted solicitor arrange a survey and building inspections on your property. Should any issues then be found, you will be able to pull out without incurring any financial damages. Providing all that is found is satisfactory to you, at this point, you will be able to move ahead with your purchase and move ahead to sign the deeds for your property.
Step Eight: Deposit
Once all of the above has been completed and you are happy to move ahead, you will sign the contract. This will confirm the date you expect to complete on the property, and it is at this point that you will need to pay the deposit for your new home.
Step Nine: Completion
Before completion, we recommend you arrange property insurance and pay all necessary property taxes – it’s a good idea to speak to an expert tax professional in New Zealand.
At completion, you will usually sign both the title deeds and the mortgage deed (if you are using one for the purchase). If you are unable to be present in New Zealand for this signing, you can arrange for your solicitor to have power of attorney – but this must be organised in good time.
You must ensure that all your funds are in place, as it is at this point that they will be transferred to the vendor, and you will receive the keys to your new home! If these payments are being made from another country, talk the payments through carefully with a currency specialist, so you can ensure you are protecting the funds for your property purchase from exchange rate uncertainty and get the best currency rate available. The New Zealand Dollar can be a volatile currency, as it is tied closely to international trade and commodities, as well as the busy Asian markets. It’s better to be safe than sorry – stay on top of exchange rate changes and what they might mean for your New Zealand emigration.