First time buyer

Elise Brooks is AlexanderDorrington’s youngest Legal Executive, although she has worked in property law for over five years. After saving and researching the market, the time was right for Elise and her partner to jump on the property ladder. She felt pretty well prepared for buying her first home. However, her purchase was a brave choice for a newbie – a freehold house and land package. The couple signed their contract in August and settled in October last year, moving into the new house over a year later.

To help other first-time buyers, we asked Elise what she wished she had known before embarking on her purchase. Read on for some useful tips.

 

first time buyerQ: What are your goals for this property?

Elise: This house isn’t our forever home, it’s a home that suits us now. I think it’s important to remember this when buying your first home especially when it’s a new brand new home as you can easily get carried away with all the extras! The aim is to keep it and rent it out in the future slowly building our property portfolio as we move onto our next property. Whilst this is my first home it’s not my partner’s. We previously lived in his home which was a ‘doer-upper’. After three years of slowly doing that we decided we needed a break from the constant homework.

Q: What advice do you have about selecting the area?

Elise: Really it’s all about cost and the market for us! Whilst it’d be nice to have an ocean view and a big section that’s just not within our budget. Don’t overstretch yourself it’s not worth it! From my perspective, as we’re looking at making this a long term investment, we looked at areas near public transport, schools and areas which will be developed.

Q: Is it best to select a real estate agent to work with first or find a property you like and work with the agent selling it?

Elise: We actually did everything without an agent! We used TradeMe and found the vendor directly.

Q: When should you involve your lawyer?

Elise: I involved my colleagues instantly. It’s important to do it right from the get-go, especially with house and land packages. Generally speaking, when you sign up for a house and land package you will receive two contracts (one for the purchase of the land and one for the build). It’s important that you get these to your lawyer prior to signing if possible. Your lawyer will be able to give you peace of mind that you know what you’re getting yourself into.

Q: What checks would you recommend people do before buying?

Elise: Always get a LIM report and building reports.  Also, ask your lawyer or legal executive to assist you with a wide due diligence clause in your contract.

Check out your builders.  Who are you buying with? Have they got a good reputation in the market? What have other customers had to say about working with them?

Q: What extra costs were involved that you didn’t expect?

Elise: Nothing that I didn’t expect really. However, other buyers may not be aware how financing works with a house and land package. We have been paying a mortgage since October last year when we settled the land (even though it was a bare section). As the build progressed, we made progress payments and the mortgage went up which can get costly especially if you’re renting as well. It’s also important to budget for the required bank valuation on the land which cost us $900.

Other buyers may also not be aware that you may have to pay full rates from the time you purchase the section irrespective of whether there’s a home on it or not.

Buying a first homeQ: What challenges did you have along the way and how did you overcome them?

Elise: Where do I start? They painted the house the wrong colour, laid the wrong tiles in our bathroom and almost gave us the wrong kitchen.

And the list goes on. My advice is to keep records of absolutely everything. Communication is key. I knew my rights as a consumer and under the contract and was able to sort all of this out. Not without a bit of hassle but nothing is ever perfect!

Q: What do you wish you knew before you started looking?

Elise: How long the process is and how draining it can be. Whilst it’s all worth it now, it is a lot of work.

Q: Is there any other advice you would give others thinking of doing what you did?

Elise:

  • Never bank on getting ‘liquidated damages’. These are the amount of money that both parties in a contract agree upon if a breach of contract occurs or legal action arises as a result of the contract breach. If one of the parties breaches the contract, it agrees to pay the liquidated damages to the other party. To be enforceable the estimate must be a genuine pre-estimate of the loss suffered by the party claiming the damages.
  • Very rarely are builds finished when they’re supposed to be, be aware there are probably going to be delays.
  • If you sign a contract prior to getting a solicitor to review it, ensure you have a due diligence clause in there.

At AlexanderDorrington, we appreciate that buying property for the first time is a nerve-wracking experience for anyone. Buying a house and land package requires vision, preparation and research. We may be property law experts but many of us have been first-time buyers at some stage too. That’s why we anticipate the questions you might not think to ask. We take extra time to ensure you are confident all steps have been taken to mitigate risk and you can rely on our expertise throughout your purchasing journey. As Elise suggests, contact us from the get-go so we can be there for you.

 

By Rachael Stevenson