Blog - Real Property Kerikeri

Market Update

Aug 20, 2016

By the Numbers

REINZ reported a 37% increase in sales volume for Kerikeri in April compared to April 2015. This compares with an increase in Northland of 18%. Sales volumes in April were down slightly from March in Northland but up 16% in Kerikeri. Median prices rose 29% in Kerikeri compared to April 2015; again, the highest levels in Northland. Median section prices have been rising with greater numbers of people choosing to build. The median price for 2016 is underestimated as there are many unreported sales over $200,000 still awaiting title issue. Our figures continue to show that about 2/3 of sales are going to new residents to the area, with increasing interest from non-Kerikeri resident investors. First time home buyers are struggling to get a foot on the ladder in Kerikeri with fewer and fewer properties available under $500,000. This newsletter gives you some important points to consider. We are always happy to meet with potential clients or members of the public seeking information. Winter is almost upon us. We wish you well with your heating and your building’s weatherproof qualities. We are fortunate to be in such a temperate part of our country!

Aug 5, 2016

Vendor Responsibilities and Possible Liabilities

Before entering into an agreement to sell a property you must read and understand the warranties you are giving at general term 6 (or 8 in an auction agreement) of the Auckland District Law Society (“ADLS”) Agreement. In an ideal world you will seek advice from your lawyer prior to signing any Agreement because unravelling issues after the Agreement is executed by both parties is far more difficult (and costly) than sorting them prior to the Agreement being executed. The standard ADLS Agreement contains warranties, or promises, by you, the seller, to the purchaser as follows: You have not received, nor have any knowledge of any outstanding requirements from any local or government authority which you have not disclosed to the purchaser in writing – for example a notice to fence a swimming pool, or that a building does not comply with the building code, or that the septic tank needs repairing/cleaning. If you cannot give this warranty it needs to be varied or excluded in writing in the further terms of the agreement. This is even if the purchaser has indicated on the front of the agreement that they are obtaining a LIM which should disclose any such issues. You have not given any consent or waiver to any application under the Resource Management Act directly or indirectly affecting the property which has not been disclosed in writing to the purchaser. An example of this would be consent given to a future housing development at a neighbouring property. All chattels you have agreed to sell to the buyer will be in the same state of repair on settlement as they were when the contract was signed and that they are not subject to any charge. The purchaser has a right to a pre-purchase inspection prior to settlement but, nevertheless, if after they settle they find issues they can sue the vendor for breach of warranty. If you owe money on any chattels which are subject to a charge in favour of the lender (e.g. a hire purchase agreement) then the money will have to be paid and the charge cleared before settlement. Please call your lawyer to discuss if you think this is relevant (creditors rarely advise the consumer that a charge will be registered over the property). Your lawyer can conduct a PPSR search and, if the chattels are subject to a charge, they will arrange for it to be paid out of the proceeds of sale and discharged at settlement. Where you have done any work to the property which required a building consent: You have obtained the consent; The work was carried out in accordance with the consent; Where appropriate (and it is nearly always appropriate), you obtained a Code Compliance Certificate. You have complied with all obligations imposed on you under the Building Act. In addition the ADLS agreement provides that if the property is a bare residential lot that all boundary markers are present and will be in their correct position as at the possession date. This can be an expensive omission and better to sort early on in the sale process. If you breach your warranties the purchaser can’t back out of the Agreement (unless the breach is really fundamental to the whole deal) but you can be sued for that breach. Litigation is expensive so it is better to know what you are warranting or promising before you sign the Agreement and if you know you can’t honour any of those promises deal with that in the way the Agreement is worded.

Jul 26, 2016

Builders' Warranty

All designers, consultants, builders and tradespeople involved in residential construction, whether it’s a new home or an addition to an existing home, need to be Licensed Building Practitioners (LBP). The LBP undertakes restricted building work. That is, work related to weather tightness or structure of a residential building. Arecord of works also needs to be provided to the Council before a Code Compliance Certificate (CCC) is issued for any completed building work. In addition, Council often requires producer statements from consulting engineers for items such as water proofing applicators for the design, installation or construction supervision undertaken. Please understand the Council’s requirements and prepare your own checklist from these so you are planning for full approval. As part of the licensing system, all licensed tradespeople such as carpenters, roofers, block layers, external plasters must complete ongoing training to maintain their license. There are extensive fines for undertaking restricted building work without a license. So, make sure your tradespeople are licensed! You can do this by visiting https://lbp.ewr.govt.nz/publicregister/search.aspx Having completed a new home, all parties including Council, provide an implied warranty. Should a major failure occur within 10 years of CCC being issued, civil action can be undertaken against relevant parties involved in the construction of the home. If any issues arise within 12 months of CCC being issued, the builder is required to undertake corrective actions without question - assuming that this does not involve damage caused by the home owner since the property hand over. Building material manufacturers produce their products to meet the durability expectation of the Building Code, which is a minimum of 15 years for cladding or roofing and 50 years for structure. The LBP is also required to install these materials to the manufacturer’s requirements. Some owners may wish to obtain additional insurance, either privately or via organisations such as Certified Builders Association of New Zealand (CBANZ) or Registered Master Builders (RMB). CBANZ make it compulsory for their members to supply this warranty to new home owners, and it is hoped that RMB will soon follow suit. These warranties ensure that CBANZ/RMB will complete the project if the builder fails to do so correctly. It appears likely that new legislative changes will limit the Councils’ liability to 25% of any proven liability. Therefore, additional insurance is worth consideration, especially if your builder does not belong to an organisation that can provide a suitable insurance or if your builder does not have appropriate professional indemnity insurance. New home owners can usually have confidence in the home building industry, thanks to strict Government licensing and building standards. In addition to this, reputable accreditations, audits, consent processing and inspection processes have resulted in a high standard being met in the building industry.

Market Update

Jun 26, 2016

Keeping you Informed

It’s important to us to provide honest information and opinions regarding buying and selling property. This month’s heading for our newsletter reflects this commitment to you. With the shortage of homes and high buyer demand, multiple offers have become commonplace and many of our current sales are now multi offer situations. Multi offer situations can be confusing and frustrating for potential buyers. Confusion can arise if potential buyers do not fully understand the process which, unfortunately can result in a feeling of unfair treatment. Therefore, it is important that real estate Sales Representatives provide clear information about the process and ensure that it is well understood. A common misconception to be cleared, is that it is the Vendor and not the Licensee who has chosen a multi-offer sale process. Timeframes in a multi offer process is another area of confusion, especially if the potential buyer is under the impression that they are the sole interested party. Understandably, suspicions may arise if there is a ‘last minute’ competing interest. This again shows the critical importance of all parties being comfortable and aware of timeframes and the next steps to secure the property, through the careful attention and guidance of the Sales Representative. Confusion often strikes once again if an earlier offer has been declined by the Vendor, and more than one buyer becomes interested in the property thereafter. In this instance, the multi offer process renews and the potential buyer has the opportunity to submit a new offer. As always, this must be their ‘best’ offer if they are serious about securing the property. At REAL, we have clearly documented policies and procedures for this process. This assists us to have a consistent practice and enables us to provide clear information to all parties. All in all, we aim to govern a fair process and do our utmost to assist everyone involved to the best of our ability.

Market Update

Apr 20, 2016

Supply and Demand Affect Our Prices

We continue to see values going up, especially close to town. Two bedroom units have been selling like hot cakes (as long as they are within walking distance to town). The attraction for inner town living is predominantly the convenience for retirees, having Kerikeri’s cafés and restaurants and all the services at your doorstep and being able to enjoy the vibrancy of the town. From our own experience, we could add to that list the savings of time and money in commuting from rural areas, being able to enjoy the full programme of sporting, cultural and entertainment events in Kerikeri and not forgetting the beautiful and interesting walk around the bypass to the Stone Store basin and Rainbow Falls which is a regular event for both locals and visitors alike. In the short term, “supply and demand” is the factor in price change. The short supply and high demand continue. In the past, an Auckland buyer would displace a Kerikeri resident who would usually move out of Kerikeri to Auckland, Tauranga or wherever. Today the option for many of us to move to ‘other’ larger centres is not an option because of higher costs, so as a result more of us (vendors) are choosing to stay in Kerikeri. The effect of this is a population gain that we estimate to be around 6 -800 people in the last year! To stabilize the market we need to add to the existing stock and keep up with demand. First of all, Kerikeri needs more residential land within walking distance of town with the infrastructure to support it. Secondly, we have reached the point of not having enough tradespeople to build the homes on order now. Will values continue to increase? Yes we believe so… * Source REINZ Statistics

Apr 5, 2016

Purchasing Land

With the current strong real estate market in Kerikeri one of the outcomes is that there is less stock and a limited choice when it comes to buying houses. Consequently, many home buyers are opting for buying a section and building their own home. The process and issues to be aware of: It would seem, from the outside, that buying land and building a home would be a simple straight forward business, Not so! Below is listed some of the decisions and obstacles involved. Power: is there power supplied to the section, either by way of an existing power plinth or is it on the road reserve and would require a transformer, trenching and a cable to get supply? This can be a very expensive exercise. Phone: is the phone to the boundary copper or fibre optic? Can it be connected for broadband? Does it have ADSL or VDSL? These are issues which you need to sort before you buy. Boundaries: Are all the boundaries clearly marked and defined? If not, you have the right to ask the vendor to have all the boundary pegs identified. (This is for residential sections only and not the case if there is an existing dwelling on the property or larger blocks.) Soil type: Is the soil clay or volcanic? If you are living in Kerikeri it makes sense to try and have volcanic type soil as it is free draining, great for establishing a garden and even workable in the winter, whereas a lot of the local clay soils are a lot more challenging. Water: In Kerikeri we are fortunate to have not only treated town water but also, in some areas, an available Kerikeri irrigation supply. When buying, it is certainly an advantage if either or both of these options are available. HAIL: The Hazardous Activities and Industries List known as HAIL is a new one and can’t be avoided! It applies any time a change of use is applied for through the council. So be aware and do your homework because there can be significant costs associated to remedial work if there are any signs of contamination. The tricky part is that a change of use (such as building a house) is most often not applied for until after the sale has been transacted, so the purchaser could end up with an unusable chunk of land. Titles: Certificates of Title prove the ownership of land and the rights and restrictions that apply to the land. They contain interests such as easements and covenants, mortgages and caveats etc. So it is really important that you get either your real estate agent or your lawyer to explain in detail the information contained in the title document. This is really important; for example, the covenants may not allow cats or dogs to be kept on the property, they will also specify, most likely, the size and type of home you can build so this is essential to your decision making process. The idea of this article was not to put people off buying a section and building because we all know Kerikeri needs more new homes, it was more to make people aware of the possible problems that can catch out those who are uninformed. We would suggest that using experienced, knowledgeable real estate agents will make this process easier and there is less likelihood of any issues which invariably cost money and time, and cause a huge amount of emotional stress during a process which should be exciting, rewarding and fun.

Mar 28, 2016

Who is the REAA?

The Real Estate Agency Authority (REAA) is an independent government agency that regulates the New Zealand Industry formed under the Real Estate Agents Act 2008. The REAA’s role is to promote a high standard of service and professionalism in the real estate Industry and help protect buyers and sellers of property from undesirable behaviour of less ethical salespeople. The Real Team believes strongly in best practice and providing a high level of service to our customers. We consider the code of conduct set by the REAA as a minimum standard for our business practice. Our established practices and policies and regular training ensure that all of our salespeople hold best practice as their priority. This, in turn, gives absolute reassurance to our clients. Additionally, our unique business practice of working together collaboratively as a co-operative enhances our communication with each other, ensuring knowledge of best practices is constantly shared. Co-op members feel accountable to each other for conducting ourselves with honesty, integrity, and making sure there is full disclosure. These policies work well for us and our customers and have been the catalyst for a steady increase in Real’s Market Share over the years. In simple terms, we believe in treating people how we would like to be treated ourselves. We would like to help you and invite you to contact us when buying or selling. Come and see us and experience the REAL way of doing business. We look forward to meeting you.

Mar 27, 2016

REINZ

The Real Estate Institute of New Zealand (REINZ) is a membership organisation representing more than 14,000 real estate professionals nationwide. REINZ represents all facets of real estate including residential sales, rural, auctioneers, business brokers, commercial and industrial sales persons and leasing and residential property managers. District Forum Leaders (DFLs) have been established to ensure there is ongoing communication between the REINZ Board and their members at the “coal face.” DFLs are an important part of the REINZ structure – they are the local face of the Institute for their members on a day-to-day basis, and are charged with the responsibility of ensuring real estate companies in our area are aware of matters that need attention, and of the general support of REINZ members. Sharon Roberts from REAL has been chosen by the Real Estate Institute as their Northland representative and we are proud of her ongoing involvement within the REINZ organisation.