RNZ's money correspondent answers your questions about buying a house. Photo: RNZ
We're trying to buy a first home and lots of places we look at are "price by negotiation" or deadline sales. How do we know what to offer?
I think there are a few things you can do to help give you a guide to what sort of offer might be appropriate.
It can help to look at other recent sales in the area, and work out how they compare. You can find these on sites like Homes.co.nz - if you see a place that looks a similar size and condition and in the same sort of area, it might give you a guide as to what might be reasonable.
This is where going to a few open homes before you start looking seriously can really help, because you'll get a sense of what represents good value.
Sometimes you see data going around about a certain suburb selling at a percentage above or below CV - this can give you a general guide but won't account for the specific features of the particular house you're looking at.
But Steve Goodey, who does a lot of this in his work as a property investor and investment coach said those sorts of data sites would not help for some of the factors that can make all the difference when you're buying a house to live in.
He said while an offer for a rental property was usually about making the numbers work, when it was an owner-occupied deal other facts were more important, like the vendor's motivation, how badly the buyer wanted a particular property, how soon they needed a house and how "special" a place was.
The price that a vendor might be willing to accept will also be influenced to a degree by their circumstances - someone who is just testing the market to see if they can sell will be less likely to take a lower offer than someone who needs to move.
If someone bought recently, they might also have less room to accept a lower price than someone who bought a long time ago.
Real estate salespeople should give you a guide as to what sort of price range the property might be in, but remember they are acting for the vendor.
You'll need to do your own research and offer a price that feels right for you. It's then up to the salesperson to present that offer to the vendor, and you can negotiate from there if it's appropriate.
I'm thinking about buying an investment property but how does it work to use the equity from my existing house?
It's quite common for property investors to get started by using the equity in their own homes. It works like this.
If you bought your house a while ago, and you've paid down your home loan, you might have built up extra equity in your property.
Say for example you bought your house 10 years ago for $500,000 and it's now worth $1 million.
If you had a home loan initially for $400,000, and you've paid off a bit of the loan over time, so you now owe $350,000, you've gone from having $100,000 equity to having $650,000.
The bank may let you increase your loan to $800,000, giving you $450,000 that can be used to purchase an investment property.
You can use that equity as a deposit and then get a loan for up to 70 percent of the investment property's value to complete the deal.
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