Buy a property - Home loans

It's important to choose the right location for you.

We have resources to help you choose the right place to live:

• Additional resources

Location is one of the most important things to look for in a property. It can have a huge impact on your life, so think about how close you want to be to friends and family, work, schools and other amenities.

And remember, your home is also an investment. Being in a good area can make it easier to rent or sell if your circumstances change, and your home will also be more likely to hold its value over time.

Before you start house hunting, make a "wish list" of the things you want – the features you need (e.g. the number of bedrooms) and the features you'd like (e.g. a pool or double garage). Think ahead to the kind of home you'll need over the next five to ten years. To make it easier, use our house hunting wish list to help you decide on the essential features of your new home.

Give your wish list to your real estate agent(s) to help them understand what's important to you. That way you'll minimise the time you spend looking at homes that don't meet your needs.

If you like a house but it doesn't have all the features you want, consider whether you could add them. For example, you could add off-street parking to a wide, flat section but not to a steep, narrow section.

Newspapers are often a good place to start. Look in the property section of your daily paper and in local real estate brochures for information on house prices in the areas that interest you. Check the papers regularly, as good homes sell quickly.

Also keep an eye out for "For Sale" signs, and ask friends and family to keep their ears to the ground for you.

The advantage of house hunting over the Internet is that you can narrow down your search and only look at houses in the suburbs and price ranges that suit you. You can also often search by the number of bedrooms and bathrooms you're after. Most of the major real estate agencies have websites, and a number of companies list the properties of several real estate agencies on their sites.

Open homes are a great way to look at properties without feeling pressured. You can see for yourself what you can get for your money and meet real estate agents who may have other properties that match your wish list. Check the open homes section in your local paper, or drive around the neighbourhoods that interest you on a Saturday or Sunday morning.

When you're buying a home through a real estate agent, you don't have to pay them or their agency. The agent works on behalf of the vendor and is paid a percentage of the sale price.

Not all houses are advertised. Get to know three or four real estate agents who specialise in properties in the areas that interest you, and let them know your price range and what's on your wish list. Be up front and honest with them and you'll avoid wasting time visiting unsuitable homes.

If an agent knows you're serious, they'll do their best to find you the home you want. If you see any you like, don't be shy about asking the agent questions about the house value and condition.

When you find a home you'd like to buy, the real estate agent will act as a go-between when you're negotiating the price with the vendor.

Revisit the property a couple of times, at different times of day, to find out where and when the house gets sun and to check noise levels, neighbourhood traffic, etc.

If you have any concerns about the state of the property, ask relevant tradespeople (builders, plumbers, electricians, roofers, etc) about indicative repair costs before you make your offer. If you're still interested in the property, tell the real estate agent that the repair costs will be taken into account when you make your offer.

A visit to your council's planning department can be very helpful for getting information on:

• the property's zone
• any building and height restrictions, especially if you plan to extend or renovate the property
• any changes planned for the area that could affect the property's value.

The property title (usually available from the real estate agent) will show if there are any restrictions on how you can use the property. Your lawyer will also be able to obtain a copy, and will explain any restrictions to you.

A land information memorandum (LIM) provides a lot of valuable information about a property, including whether any building consents have been issued, drainage plans, erosion, flooding or contamination hazards, protected trees and archaeological features.

LIMs are available from councils for between $100 and $400. However, some vendors also provide copies of LIMs to prospective buyers.

To organise a building inspection, contact your local Master Builders' Association.

• Registered Master Builders Federation website

You may be required to provide a registered valuation of the property when you apply for your finance. In this situation, and if you want to make your offer unconditional, you'll need to arrange to have the property valued before you make your offer. You may also want to get a valuation for your own comfort, as a guide to how much you should offer for the property.

The real estate agent may be able to recommend a valuer, or you can look in the Yellow Pages. Valuers' fees vary greatly, so it pays to shop around if you have time.

• You may be eligible to borrow up to 80% of a property's value. Note that the maximum amount you can borrow depends on the property's location, the property type, the home loan type and other ANZ lending criteria.
• In very exceptional circumstances, we may lend over 80% of the property's value, a low equity premium on a graduated scale will apply (the fee range is 0.20% to 1.25% of loan amount) and a registered valuer's report is required.
• Consider getting a guarantee from parents or other family members for the amount of the deposit.
• With joint borrowing, you can borrow money for your deposit jointly with your parents or other family members. The home loan will be assessed on your joint financial situation.
• Your parents or family members may also be able to give you the amount you need for your deposit as a gift.

• Depending on your loan type, you may be able to apply for an ANZ Loan Repayment Holiday (for up to three months) every two years to help you free up extra cash.

• Consider a home loan that you can draw on, as you need the funds to pay builders, plumbers, etc.

• Choose an ANZ Standard Variable Rate Home Loan that you can draw on as you need the funds.
• Consider ANZ FlexiPlus for access to money when you need it.

• A 30-year repayment term will help to keep your regular payments to a minimum.

• Consider an ANZ Standard Variable Rate Home Loan or ANZ FlexiPlus.
• Choose a short repayment term.

Sometimes I have extra money available that I'd like to put towards my home loan.

• Choose an ANZ Standard Variable Rate Home Loan, which enables you to make extra payments when you have extra cash.
• Consider ANZ FlexiPlus for when you need to make lump sum payments.

Consider an ANZ Standard Variable Rate Home Loan or a short-term ANZ Fixed Rate Home Loan.

We recommend you commit no more than 30% of your income (before tax) to your loan payments. Be sure to allow for any debt payments such as car loans, hire purchases and credit card payments. If the amount you have left over for a home loan doesn't seem like it's enough, contact an ANZ Mobile Mortgage Manager to talk over your personal situation.

The deposit you need to buy a home will depend on the value of the property you're looking at, the location and your personal financial situation. Deposits can either come from savings or from your equity in a home you already own.

Add your deposit to the amount you can borrow (from the calculator). This is the maximum purchase price you can afford to pay.

Buying a home includes extra costs for things like legal fees, moving house or doing repairs to your new home.

Where you can, get two or three quotes (preferably written). You may be surprised at how much prices can vary for the same job, but the cheapest price doesn't always mean the best deal.

And remember to insure your new house from the settlement date. If you haven't done it already, talk to us - we can arrange it for you.

Remember, when you're buying a property you generally don't have to pay for:

• the real estate agent's commission
• the vendor's share of the rates, levies or utilities' costs before the settlement date
• the vendor's legal costs.

Make an offer

When you've found the property you want, tell the real estate agent you want to make an offer. It doesn't have to be the price the vendor is asking.

The vendor may accept your offer straight away, or they may want to negotiate on the price or other aspects of the sale.

The real estate agent will act as the go-between until you and the vendor reach a price on which you both agree.

The deposit is usually 10% of the purchase price. The vendor may accept less but you'll need to arrange this with the real estate agent before you make your offer.

A personal cheque is the usual payment method. You pay your deposit directly to the real estate agent who puts it in a trust account until any conditions have been met. If the conditions aren't met, you'll get your deposit back as long as your offer is still conditional.

The vendor sets a reserve price that only they, the auctioneer and the real estate agent know. Once bidding reaches the reserve price, the vendor is obliged to sell the property to the highest bidder. They have the right to withdraw the property at any time before the reserve is met.

If the reserve price isn't met, the property is "passed in" and the highest bidder has the opportunity to negotiate with the vendor.

If the home you like is going to auction, let the real estate agent know you're interested. This is called "registering your interest" and means the agent must let you know if any pre-auction offers are made.

If you buy a home at auction your offer must be unconditional. That means you need to do all your pre-purchase research (such as getting a valuation, a LIM report and a builder's inspection) and get your lawyer to look over the auction contract before the auction date. You must be clear on your maximum price and be 100% sure you have enough finance available. We recommend you talk to us about getting a pre-approved home loan.

It's a good idea to go to a few auctions before you bid at one yourself, to see how they're run and how the bidding works.

Decide on your strategy before the auction, as it's easy to get caught up in the excitement on the day. Have three figures in mind:

1. A price you think is a bargain for the property
2. A price you think you might have to pay for the property
3. The maximum price you're willing to pay for the property.

Think about asking a friend or family member to go with you to stop you bidding over your maximum. If you're not comfortable about bidding, ask the real estate agent to bid on your behalf, making sure they know your maximum price.

It's often easy to find a bargain at an auction in a slow housing market. It's also easy to pay too much for a house at auction in a booming market.

If you're the successful bidder, you must sign a contract and pay a deposit at the end of the auction – usually 10% of the purchase price. Most auctioneers will accept personal cheques, but you should check with the real estate agent about this beforehand. Settlement is usually four to six weeks after the auction date, but you may be able to negotiate this through the agent before the auction.

Once the vendor has received all the tenders, they decide whether or not to accept any of them. If they're not happy with any of the offers, they may decide to negotiate with the person who's made the highest offer.

If you've made an unconditional offer and it's accepted, you're committed to the purchase. If you've made a conditional offer and it's accepted, the conditions must all be satisfactorily met before the contract becomes binding.

Your tender is valid for a number of days after the tender date (this will be set out in the tender document). You shouldn't make any offers on other properties until after that date.

If the property you like is going to tender, let the real estate agent know you're interested. This is called "registering your interest" and means the agent must let you know if any pre-tender offers are made.

The agent will provide you with a tender document that outlines how, where and when the tender should be made, the settlement date, the deposit required and how long your tender remains valid, along with any conditions that must be met.

Make your tender your best offer or what you think the property is worth, as the vendor will look at all the offers together and often won't negotiate.

You can make your tender conditional or unconditional. If your offer is unconditional you'll need to do all your pre-purchase research (such as getting a valuation, a LIM report and a builder's inspection) before you submit your tender. You should also get your lawyer to look over the tender document before you submit it.

An unconditional offer for a lesser amount may be more attractive to the vendor than a conditional offer for a higher amount, as there's no risk of you pulling out. It pays to go the extra mile and do your homework before you submit your offer, so you can make your tender unconditional.

The deposit is usually 10% of the purchase price, paid directly to the real estate agent. You may be asked to pay a 5% deposit when you submit your tender and a further 5% if it's successful. A personal cheque is the usual payment method.

If your tender is accepted, the deposit is paid into a trust account until any conditions have been met. If the conditions aren't met, you'll get your deposit back as long as your offer is still conditional.

There are two kinds of offers – unconditional and conditional.

Unconditional offer

This is an outright offer to buy the property. You need to be 100% sure that you want this property and that you have access to the money to buy it. Once the vendor has accepted your offer, you're legally obliged to go through with the sale.

Conditional offer

A conditional offer is also a binding contract, as long as all your conditions are satisfied. You can only back out if one or more of your conditions are not met.

Common conditions include:

• subject to valuation: the sale will only go ahead if the valuation is acceptable to you and to us
• subject to finance: the sale will only go ahead if your bank approves your finance
• subject to title search: the sale will only go ahead if there are no ownership, access or other claims recorded on the property title (your lawyer will do this for you)
• subject to a Land Information Memorandum (LIM) report: the sale will only go ahead if the property (including any alterations) complies with all building regulations (your lawyer can do this as well)
• subject to a builder's or engineer's report: the sale will only go ahead if you're satisfied that the house or the land it's on are sound.

You may wish to set other conditions – for example, that the sale is subject to certain repairs being done. Talk to your lawyer about anything you're unhappy or unsure about. Don't sign the sale and purchase agreement until you're happy with the conditions.

The vendor may accept your offer straight away or negotiate on the price or other aspects of the sale. The real estate agent will act as the "go-between" until you and the vendor reach a happy medium. If you can't agree on a price, you can withdraw your offer.

Either the agent will prepare a "sale and purchase agreement" or you can have your lawyer prepare it for you. It's a written document that outlines the offer amount, the settlement date and any conditions that must be met before the sale goes ahead (now is the time to put any additional conditions in).

The agent will have standard clauses or you can ask your lawyer to draft clauses specific to your requirements. You can make your offer conditional or unconditional. It's a good idea to discuss the sale and purchase agreement, and any subsequent changes to it, with your lawyer before you sign it.

Once both you and the vendor have signed the agreement it's legally binding (subject to any conditions listed on the agreement being met).

The sale and purchase agreement will state how long you have to settle the conditions. When all conditions are met, the offer becomes unconditional, the sale goes ahead and the property will be yours.

• Utilities: Organise to transfer your phone, electricity and gas accounts to your new address and set up any new automatic payments.
• Mail: Arrange with New Zealand Post to have your mail sent to your new address. Send change of address cards to family and friends.
• Movers: Arrange for furniture removal well in advance – either book a moving company (get a couple of quotes) or sweet-talk friends and family. Some removal companies also supply boxes.
• Cleaning: Moving can be a messy business and the vendor doesn't have to clean the home before you move in, so you may like to book cleaners for when you've taken possession. It's a good idea to allow time for cleaning before your furniture arrives.
• Loan documents: Your lawyer will let you know when your loan documents are ready for you to sign. If you're buying with someone else, you'll both need to sign.

If you're moving within the same city or town, you can expect to pay between $1,000 and $3,000 for a professional removal company. Try to get two or three quotes, as prices can vary.

The cost of moving will also depend on whether you do the packing yourself or get the moving company to pack for you. If you choose to do it yourself, most movers have boxes you can buy to make it easier.

Some movers include insurance for the move in their quote, or you can talk to your current house and contents insurer. Some only provide cover if a professional mover packs for you.

• Payment: On settlement day, all the money is transferred to the vendor or their lawyer. This includes the money you've borrowed and your initial deposit from the real estate agent's trust fund. If you're contributing any money apart from the initial 10% deposit, you'll need to pay this to your lawyer.
• Keys: Collect the keys to your new home from your lawyer or real estate agent.
• Cleaning: If you haven't arranged professional cleaners, allow time on moving day to clean your new home before the movers turn up.
• Celebrate: Allow time to relax and enjoy your new home at the end of the day. Thank friends and family who've helped with the move by inviting them around for a glass of bubbly!