Buying a property in 2020 is a very different kettle of fish to buying a home even ten short years ago. Gone is that classic Kiwi ‘she’ll be right’ approach to real estate. Today’s buyers are knowledgeable and well researched. They can access a wide range of information and services quickly which means they know everything about your property before offering.
So, as a seller, you need to as well! Because failing to prepare for the market could be one of the costliest decisions you ever make. Here are some of the issues which could crop up during the campaign and some tips to help you during the process.
Title issues
Properties on a cross lease title cause the most issues. Cross lease titles in themselves are not the problem. But if structures have been built without updating the flats plan, this is where you run into trouble.
Cross-lease interpretation is a grey area and lawyers can have different opinions on the same matter depending on which side they’re representing. Previously, in most cases both parties would meet at a mid-point or simply overlook the inclusion as no big deal. That was until the banks started deeming these a “defective title”. In my opinion the term defective is a bit harsh. The flats plan forms part of the lease agreement and is an extension of the title vs. the actual title itself. Where a defective title has come about as a result of a consented extension, some of the fault should lie with the council who do not refer to the flats plan when they issue building consents.
The good news is that these can be rectified but it is vital to do this before going to market. Having a curve ball like this thrown at you during a marketing campaign will cost time, energy and money. This could have a significant impact on your end result, if you can in fact still achieve one.
Council issues
We recommend ordering a LIM report to anyone looking to sell. Doing this in advance of launching your property eliminates landmines cropping up once you are on the market.
One of the biggest concerns for prospective purchasers is work that hasn’t been consented or hasn’t been signed off. This information is contained in the LIM. On many occasions, we have had to find a path forward for vendors who are suddenly faced with a property that has unconsented works. Depending on whom did this work (the current or a previous owner), it can come as a complete shock. The problem compounds when the council won’t always provide a straight answer for the best course of action. If all this is uncovered when already on the market, there is a loss of time and momentum. This in turn causes a lack of confidence in the product and buyers flee in their droves. Ultimately this will more than likely have an effect on your bottom line.
If you purchased your property ten plus years ago you are unlikely to have given any thought to it being in a potential flood zone. But recent modelling by the council may have placed your property firmly in the middle of a danger zone. This modelling has been throwing up curve balls for our unknowing vendors. But what is even more frustrating is to be told by the council on further investigation that “it’s only a model and it doesn’t really look like it affects the property”– Unfortunately that’s not how today’s buyer views it! Forewarned is forearmed in the game of real estate.
Building issues
Houses are a bit like people. They might appear fit and healthy until you investigate and uncover what lies beneath. You may think your home is perfect. But if left unchecked, structural concerns (like totara piles and water ingress) can crop up. And in an unregulated industry where building inspectors often state opinion as fact, these issues can derail your campaign.
As an owner it is best to know everything about your property upfront because it gives you control in the sales process. Order a LIM, commission your own building inspection and make sure your title reflects your property. At the end of the day your property goals are our goals too. So take the time to prepare for the market and give yourself the best chance of achieving a life changing result for your sale.
The Wellington Market
The market continues to hum along with eye watering results being achieved on a weekly basis. Just this week we sold a property in Newlands for $1,249,500. The same property was marketed for sale in 2019 and achieved a top offer of $940,000! What a difference a year makes. Insane!
Conditions are starting to creep in again with long finance clauses and valuations required by the banks. I was a valuer practicing in the lead-up to the GFC and was told by a manager at Westpac there would be no work for us in the future. This all changed after the GFC because banks became more concerned about the value of the asset as opposed to the serviceability. It would appear to me something similar is happening here.
Wellington Market Quick Stats:
What’s on this October in Wellington?
Wellington on a plate 2020, October 1st – 31st
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Raw Meat Monday – Stand Up Comedy, The Fringe Bar, 26 Allen Street, Wellington
Wellington’s longest-running open mic comedy night is back!
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If you, or anyone you know, could benefit from a considered market assessment by Wellington’s only licensed agent and registered property valuer, please do not hesitate to call. We are always happy to help.
