New Zealand - The Good, The Bad and The Ugly.

[hayleyearth]

Any recommendations about solicitors?

[davetapson]

Any recommendations about solicitors?

 

We used Lucy Wright at Bay Law, recommended by the broker we were using.  She was pretty responsive and answered all my dumb questions happily.

 

lucy@baylawoffice.co.nz

 

We didn't get the property so don't know what the total cost would have been, but the review of the all the sale docs (including answering my questions) was $200, which is what she said it would be initially.

 

Have no idea if that is good value or not.

Edited November 2, 2020 by davetapson

[Saag]

Any recommendations about solicitors?

We are using Nicolene du Toit (she has been here for 20 years) at North Harbor Law in Orewa. Very happy so far. She gave the sellers all their days when we had to sign and go unconditional.

 

Two of my friends used her and both were very happy.

 

Fees are $2800 all in, which is about par for a house buy.

[patches]

Any recommendations about solicitors?

 

I used Stephanie Tait from Conveyancing Centre (based in Mt Eden).

 

She was very thorough, and is one of those people that takes their time to properly discuss during a consultation, in stead of trying to push numbers through the door. Extremely knowledgeable. 

 

I think her fee was about $1750, which including the review of 2 property files. I don't the she charges just for checking LIM reports, (provided it's like 3 or so), she only charges on settlement.

[patches]

*scratches Patch's name off the Xmas card list*

 hahaha!

 

I could say I was testing an ebike to completely confirm that I think they are ridiculous and I never in 100 years would purchase one 

 

In reality I looked at the demo bikes on offer and asked myself, what is the most different from the bike I have. Try something completely new, not just same-same-but-different.

 

Plus NotSoBigBen, the hills here are real... years of riding the Spruit didn't prepare me for them

[arabsandals]

Decided this post was actually a bit gloaty and unkind to intern so I've deleted it.

Edited November 3, 2020 by arabsandals

[davetapson]

He took a punt, sometimes you win, sometimes you lose.

 

There weren't many who wouldn't have agreed with him at the time.

 

That said, the fat lady is only getting warmed up at this stage.

 

I did see a graph though, that mapped deaths vs economic downturn and they were pretty directly related - indicating NZ might get away lightly. Given tourism, hard to see why.

[hayleyearth]

The house we want came back $100k more than what we expected. It's evil that my mind still sees that as not too much because of being so use to large figures due to Rand's.

 

It's so much money this house thing, but I'm sick of paying so much rent too

[Wayne Potgieter]

The house we want came back $100k more than what we expected. It's evil that my mind still sees that as not too much because of being so use to large figures due to Rand's.

 

It's so much money this house thing, but I'm sick of paying so much rent too

where are you looking ?

[patches]

The house we want came back $100k more than what we expected. It's evil that my mind still sees that as not too much because of being so use to large figures due to Rand's.

 

It's so much money this house thing, but I'm sick of paying so much rent too

 

Sorry to hear. Was this at an auction?

 

I remember when house hunting around 2yrs ago, it was highly annoying that agents won't even give hints of the expected price range. They act like they don't know, but there is no ways the vendors don't tell them what their target price (not reserve) is.

 

The agents try lead you on saying "what is your budget" and even if you tell them a figure a fair bit lower than what the vendor may be expecting, they'll reply with "oh, you're totally in the ball park", just to coax you into registering and building up that auction interest/frenzy.

 

They also purposely list them on TradeMe in price brackets lower than they expect, just so they show up in more people's searches. Intentionally misleading.

 

Damn market! Damn agents!

[Wayne Potgieter]

Sorry to hear. Was this at an auction?

 

I remember when house hunting around 2yrs ago, it was highly annoying that agents won't even give hints of the expected price range. They act like they don't know, but there is no ways the vendors don't tell them what their target price (not reserve) is.

 

The agents try lead you on saying "what is your budget" and even if you tell them a figure a fair bit lower than what the vendor may be expecting, they'll reply with "oh, you're totally in the ball park", just to coax you into registering and building up that auction interest/frenzy.

 

They also purposely list them on TradeMe in price brackets lower than they expect, just so they show up in more people's searches. Intentionally misleading.

 

Damn market! Damn agents!

remember points 1, 6 and Interns contribution at number 7...Estate Agents Suck

[davetapson]

The house we want came back $100k more than what we expected. It's evil that my mind still sees that as not too much because of being so use to large figures due to Rand's.

 

It's so much money this house thing, but I'm sick of paying so much rent too

 

We decided that you got to get used to the idea of paying more than we'd really like. 

 

The problem with us is that the bank will only lend up to 90% of the valuation, and currently the valuations are way less than what properties are going for. 

 

Last one we tried, the agent thought the house would go for 1M or so, top end 1.1M (which curiously enough was what the valuer valued it at - you got to wonder if they colluded) and it went for 1.16M.  Which was huge for what it was.

 

We're trying once again, but I suspect the same thing is going to happen.

 

Wayne's plan is really the most logical, just short on appetite for it for us given we like space.

 

Of course you could go that route, get some capital growth to put against a deposit, and move somewhere you like after a few years.

[Wayne Potgieter]

We decided that you got to get used to the idea of paying more than we'd really like. 

 

The problem with us is that the bank will only lend up to 90% of the valuation, and currently the valuations are way less than what properties are going for. 

 

Last one we tried, the agent thought the house would go for 1M or so, top end 1.1M (which curiously enough was what the valuer valued it at - you got to wonder if they colluded) and it went for 1.16M.  Which was huge for what it was.

 

We're trying once again, but I suspect the same thing is going to happen.

 

Wayne's plan is really the most logical, just short on appetite for it for us given we like space.

 

Of course you could go that route, get some capital growth to put against a deposit, and move somewhere you like after a few years.

I found out something interesting yesterday when talking with the bank.

 

When building, essentially you have two main options.

 

1. You buy a turnkey landand build, you put down 10% and the balance pays out to the developer when certificates of completion are done.

 

2. You buy land, and then appoint a builder to do the work - banks view this as a construction loan. You pay 10% on the land, then the bank settles when the deal goes unconditional, you begin to pay interest on the land mortgage. While that is going on, you pay 10% to the builder, and the bank pays the builder in staged payments through the build. Again, you only pay the interest on that mortgage.

 

Generally speaking, you get more bang for your buck with option 2. Reason being, is with option 1, the developer has to buy the land and front 100% of the costs of the build. He is only paid out 9 months later and he has probably borrowed that cash. So he will be seeking a higher profit margin for his work. Because the house has a certain value as dictated by the market, the highest probability way to increase margin is to build slightly smaller and for lower specifications to create that higher margin.

 

So, if you can afford the interest on the mortgage while renting, option 2 provides a better return. This means that in the time that it takes to build, your investment will grow a little more than a standard turnkey.

 

I found that rather interesting.

 

EDIT:

There are downsides, time to completion on option 2 is about 3 months longer as plans need to be drawn up and sent to council. Also, you are facing higher risk as the builder starts already getting paid, so partnering with the right builder is essential..  Turnkey has less of these risks.

Edited November 4, 2020 by Wayne Potgieter

[davetapson]

I found out something interesting yesterday when talking with the bank.

 

When building, essentially you have two main options.

 

1. You buy a turnkey landand build, you put down 10% and the balance pays out to the developer when certificates of completion are done.

 

2. You buy land, and then appoint a builder to do the work - banks view this as a construction loan. You pay 10% on the land, then the bank settles when the deal goes unconditional, you begin to pay interest on the land mortgage. While that is going on, you pay 10% to the builder, and the bank pays the builder in staged payments through the build. Again, you only pay the interest on that mortgage.

 

Generally speaking, you get more bang for your buck with option 2. Reason being, is with option 1, the developer has to buy the land and front 100% of the costs of the build. He is only paid out 9 months later and he has probably borrowed that cash. So he will be seeking a higher profit margin for his work. Because the house has a certain value as dictated by the market, the highest probability way to increase margin is to build slightly smaller and for lower specifications to create that higher margin.

 

So, if you can afford the interest on the mortgage while renting, option 2 provides a better return. This means that in the time that it takes to build, your investment will grow a little more than a standard turnkey.

 

I found that rather interesting.

 

EDIT:

There are downsides, time to completion on option 2 is about 3 months longer as plans need to be drawn up and sent to council. Also, you are facing higher risk as the builder starts already getting paid, so partnering with the right builder is essential..  Turnkey has less of these risks.

Our current plan is to (try) and buy the land, which has a (big) two bedroom house on it already.  That way we have somewhere to live while the main house is built.

 

If you play your cards right and manage to add more value than it costs, you can actually get the construction loan with no further deposit as the final value will be more than the cost to build.

 

But, if not, building up the deposit for a house build should be easier than for the land, which costs a bundle compared to the house.

 

Spoke to Signature homes for construction and they are quite happy to engage in trying to work out what will work out best.  They say construction costs are 2.4k to 4k m2.

[intern]

Decided this post was actually a bit gloaty and unkind to intern so I've deleted it.

Haha don't worry arab, I have thick skin and yep, looks like I called it wrong (I am surmising what you may have said from Dave's subsequent comment). Not the end of the world...

[patches]

I found out something interesting yesterday when talking with the bank.

 

When building, essentially you have two main options.

 

1. You buy a turnkey landand build, you put down 10% and the balance pays out to the developer when certificates of completion are done.

 

2. You buy land, and then appoint a builder to do the work - banks view this as a construction loan. You pay 10% on the land, then the bank settles when the deal goes unconditional, you begin to pay interest on the land mortgage. While that is going on, you pay 10% to the builder, and the bank pays the builder in staged payments through the build. Again, you only pay the interest on that mortgage.

 

Generally speaking, you get more bang for your buck with option 2. Reason being, is with option 1, the developer has to buy the land and front 100% of the costs of the build. He is only paid out 9 months later and he has probably borrowed that cash. So he will be seeking a higher profit margin for his work. Because the house has a certain value as dictated by the market, the highest probability way to increase margin is to build slightly smaller and for lower specifications to create that higher margin.

 

So, if you can afford the interest on the mortgage while renting, option 2 provides a better return. This means that in the time that it takes to build, your investment will grow a little more than a standard turnkey.

 

I found that rather interesting.

 

EDIT:

There are downsides, time to completion on option 2 is about 3 months longer as plans need to be drawn up and sent to council. Also, you are facing higher risk as the builder starts already getting paid, so partnering with the right builder is essential..  Turnkey has less of these risks.

 

A colleague has just finished building an amazing mansion of a house up in Kerikeri.

 

He bought the land, then hired a builder. He took out a building loan, carrying a slightly higher interest rate than a regular mortgage.

 

Due to covid and a number of other supply-chain issues, his programme blew out by 15 months. He said those 15 months of extra interest and delays cost him nearly $50k.

 

His advice was if you're going to build, use a builder that is established in that area. He used a master builder with loads of experience, but he has just started his own branch of a franchise in that town, and without the established relationships with subtrades, small delays turned into big ones.

 

Classic NZ though... it's all about who you know, hahaha!