Tips for first home buyers
Buying a home may be one of the biggest purchases you’ll ever make. We’ve put together a few tips to help you navigate this process with confidence, from visiting open homes to making an offer.
Going to open homes
Visiting a few open homes can be a good place to start your property search. It’s generally advisable to look beyond location and aesthetics. Consider using your first visit to decide whether you like the property and can see yourself living there. On any subsequent visits, you can take the opportunity to assess the condition of the property, identify anything that might need to by a professional and any remedial work you may need to budget for.
Open home checklist: Inside the home
Existing water damage: Look for signs of damp, mould, and tell-tale signs like musty smells or bubbling paint as these could indicate moisture. If you have any doubts, you can request these be inspected and included in your pre-purchase inspection.
Windows and doors: consider checking they open and close properly and look for signs of decay in the window frames.
Water pressure: turn on the taps and shower to check the water pressure and drainage.
Open home checklist: Outside the home
Exterior cladding: what is it made of? Are there any cracks, uneven textures or signs of damage?
Fences: check the conditions of the fences, particularly boundary fences as these may be jointly owned by neighbouring properties.
Retaining walls: inspect retaining walls for wear, sagging or cracking, as they can be costly to repair.
Trees: if there are mature trees in the garden, check if they’re listed on the LIM report as this may limit your ability to alter or remove them.
Ways to buy a property
Before you start, it can be useful to understand that there are many ways to buy a property in New Zealand. Common methods of sale are:
by auction
deadline sale
advertised price
by negotiation
The method of sale may impact the timeframes within which you can undertake your due diligence and check the insurability of the home. With a sale by auction, you may need to conduct your due diligence prior to the auction, whereas, with a deadline sale, advertised price and negotiation, you can add these as conditions with your offer and complete them within a set period after your offer is accepted.
Pick your experts
Buying a home is a considerable undertaking. Consider engaging experts who can assist with the process:
a mortgage broker or provider who can help you with the finances.
a property lawyer who can guide you through the paperwork.
a qualified expert who can conduct a thorough pre-purchase inspection, like a builder’s report. AA Home offers a range of services for home buyers, including pre-purchase inspections, on which AA Members and AA Insurance policy holders receive a discount of up to 10%.
a trusted insurer who can help to protect your new home and its contents.
Doing your due diligence
It’s important to be well informed before making an offer on a home – regardless of the condition of the property. Generally, undertaking thorough due diligence is a good idea. Here are a few resources that can help you understand what you’re buying:
A pre-purchase inspection such as a builder’s report
The record of title is a legal document that’s specific to the address that tells you what type of land you’re buying and if there are any restrictions against the property
A Land Information Memorandum (LIM) report provides a summary of information the local council holds about the land, such as natural hazard risks, issued consents, water services and drainage.
To assess the property for impacts of natural hazards, including severe weather events, is the Natural Hazards portal. See also council hazard information.
Find out more about natural hazard risk on our blog.
Insuring your home
Insurance is often a condition of finance so it’s usually a good idea to get it sorted before your settlement date.
Get a quote: typical information to get a home insurance quote includes, the age of the property, its condition, size and construction materials. You’ll also need to set a sum insured, which is generally the maximum amount your insurer will pay to rebuild your home after an event, including demolition costs. One way to calculate this is to use the online Cordell Sum Sure Calculator which estimates typical building costs for standard residential homes.
Confirmation of insurability: your chosen insurer can give you documentation to confirm the house is insurable, such as a letter of intent if your settlement date is more than 45 days out, or a Certificate of Currency if it’s within 45 days.
Your premium: there are many factors that can impact the amount of premium insurers charge. The year the property was built, its location, the materials used for external cladding and roofing, the sum insured, and government levies and taxes can all influence the amount of premium you’re charged. If a property is in an area that is more prone to natural hazards, this may impact your insurance now and in the future. Read more about insurance premiums.
Helpful tools for home buyers and owners
Home Buyer's Guide
Things to consider from an insurance perspective. Our comprehensive guide provides things to consider at each stage of your home buying journey.
Insurance calculators
It can be hard to work out how much your home and contents are worth. By setting an accurate sum insured, this can help make sure you have enough cover at claim time. Our handy insurance calculators can help.
We're here for you
At AA Insurance, we put our customers’ needs first and pride ourselves on being there to protect what matters most to you, so you can rest easy knowing that we’ve got you covered.
One event, one excess - If you ever have to claim on more than one AA Insurance policy for the same event, you only have to pay one excess - the highest applicable one.
Replacement cover so in any event other than a natural hazard, we'll fully repair or rebuild your home even if it costs more than you insured it for.
New for old replacement for most of your items that are stolen or damaged beyond repair. So if someone did take off with your definitely-seen-better-days-couch, we'd replace it with a new one.