North Wellington Real Estate

What does the future look like for real estate agents?

Someone recently asked me at a wedding I was attending, “how will you be doing real estate in ten years time?” The easy answer for me was to explain how the job has changed since I joined the industry and then times continue the line into the future.

So how did the job used to be?

I’ve been selling real estate with a focus on the North Wellington real estate market for approximately 15 years. That’s one hellava long time in real estate by modern standards.

When I first started the job,

*Agents held the information. There were no online property information services.

*Advertising was print media based and space was always at a premium. Adverts were largely limited to one small photo and about 26 words of script ( Try telling the story about your own house when you’re limited like that!).  There were no property websites.

*People picked up the phone or walked in the door of the office when they wanted to find out about property in an area. Saturday morning was one of our busiest days with home buyers streaming in the door to talk to an agent. You sat them down in a little room and asked them questions to gauge motivation to buy(you made this call before you took them out in your car cos you learned very quickly to dodge timewasters) and you also compiled a  list of their needs and wants and put in a little time updating them on the current market conditions.

* Agents were taxi drivers. Open homes were just starting to become popular but were a fringe activity that was only partially successful. As an agent, I would cultivate a relationship with Serious Buyers and book in time to drive them around on a circuit of properties that I believed fitted their profile.

* Homeowners hired agents based on signage, mail drops, referral of friends, or previous successful business dealings.

* Real Estate was an office based activity. Cellphones were a cool thing to have on your hip but texting didn’t exist and the phones were too expensive to use unless it was an emergency. You were given a desk to sit at in a little cubicle, often in an open plan office. You were given a landline and told to make cold calls, knock on doors, fill mailboxes with leaflets, chase your friends up for leads, and follow-up buyers you had on your books.

* It was a paper war. Pieces of paper everywhere – contracts, property details, flyers, advertising.

* The agents who were longest in the office got the first dibs on car parks, buyers (walk ins), and potential seller enquiries. Beginners were gophers – doing open homes in the worst houses on the companies books, dealing with the no hoper D grade buyers who were only out looking for a bit of company or wanting ideas for their own home kitchen renovation.

* The real estate industry was largely self governed which did allow for some abuse by roguish individuals. The reputation of real estate agents was at a low ebb. There was little government involvement.

* House deals fell over mainly because buyers couldn’t secure finance.

What’s changed?

* Buyers hold as much information as agents. Online resources give buyers an overview of individual properties, markets, or locales.

* We are in the transition from print media to online. Many dinosaurs hold on to the old skool ways of doing real estate and gullible homeowners still believe them when they push them to pay the exorbitant costs of print media adverts in property mags or regional newspapers.

*People email or text first when enquiring about property. The phone still goes but not with the frequency that it used to. Almost no one walks in the door of our real estate agency to purchase or sell a home. Interestingly, potential renters still do a lot of legwork.

*Agents are open home hosts, marketeers, and hand holders rather than information providers. There is still a very valid role for agents in my view. Home selling is more than just banging a property up on trademe and waiting for buyers to hand over an offer. There is a lot of reassurance needed in today’s post leaky building environment. Buyers are on info overload and often this stops them from reaching their property ownership goals. Good agents help the buyers commit to a purchase emotionally and work with them over days or weeks to reach the point where they unconditionally purchase the property and pay a deposit. Though this is where the job of agent officially finishes, there is a certain amount of handholding and information relaying needed right up until after they’ve moved in.

* Agents are still largely sticking to the old ways of prospecting for new homes to sell but there are changes in the air. Tech savvy agents are coming into the market place and using social media, property apps, blogs and other online focused methods to stay in touch with old clients and gain new clients.

*Real Estate is no longer an office job. Smart phones were the final nail in the coffin for the corner real estate office. Interestingly, many agency owners still want an office to provide t he agency with profile, but the salespeople themselves are frequenting the office less and less. The cubicle style spaces that most real estate agencies provide is not helpful for promoting productivity in their staff. Owners are struggling to maintain contact with their salespeople as the car or home office becomes the main place for doing real estate marketing.

* Real estate has been forced to clean up its act and the government has got involved in the governance of the real estate industry and it’s players. Contracts, agency agreements, rules and regulations have become progressively complex. Agents have had to put systems in place to safeguard themselves in case of  litigation. The agent is often a soft target in leaky building disputes and for vexatious claims by disgruntled buyers and sellers.

* Conditional house deals fall over mainly based on the builders report. Increasingly exhaustive builders reports have become the biggest hurdle to getting buyers to unconditionally commit to a property purchase. Within my own company, there are some inspection companies who crash more than 70% of the deals they are called to inspect. This is a scary trend and the real estate industry will have to come up with constructive ways of helping home owners achieve a successful sale.

The future??

*Online!

*Info overload

* Mobile location-based property companies without offices and with fully integrated computer systems covering every aspect of  a real estate salesperson’s business.

*Further increased regulation and government intervention

*Social media prospecting – Facebook advertising by agents, online advertising by agents on property websites, online referral websites (eg.linked in) for clients to be able to provide feedback on agents,  huge use of email databases to get new business and for personal promotion.

* Increasing use of mobile apps for property marketing – instagram, Facebook, foursquare, google places, and many apps we haven’t seen yet to target specific buyer profiles rather than the currently blind blanket marketing approach.

* Vendor builder reports and compulsory providing of property information like title searches and LIM reports. More time spent by agents helping homeowners prepare for sale so that the marketing programme runs smoothly.

* Video for property advertising – not just a digital slideshow slapped together by the brother of the sales agent, professionally drafted and created web adverts for properties and for personal promotion. Use of models and props and storylines in online images and videos of properties to sell the benefits of the property not just list the features.

* Live video and webinars, online forums and chatrooms to talk directly in real-time with buyers, sellers, and to aid negotiations of property deals. The rise of the virtual agent – selling and negotiating property deals solely online with no direct contact on the buyer side.

I’d love to hear from you. How do you think the process real estate marketing will change in the next ten years? Is there still a place for a real estate go between? Thanks for reading. If you have any property related questions or a cool topic you’d like to hear my opinion on, don’t hesitate to drop me a note. Check out my North Wellington Property Blog. It’s full of juicy local goodness.

Dave Garratt – Guardian First National  

October 26 2012 | General Real Estate | 2 Comments »

Searching for a home on the go – how well are the new property apps doing?

When you upgrade your mobile phone technology as most people have done in the last couple of years, you take your web based property searching on the road with GPS real time mapping opening up a treasure trove of location based information to you. Apps are being developed and software available to enable you to look in greater depth at the physical location you are in at any point in time and have information including homes for sale filtered based on where you are. Google Places, Facebook check ins, Foursquare, instagram and a host of other available services allow you not only to recieve information but also to give information or feedback about where you are or what you are doing. These services are housed in the cyber ether or virtual cloud and can be collated to form a deep multifaceted impression or a person, place, or business. This technology is beginning to be harnessed by tech savy real estate agencies, salespeople, and real estate service providers such as realestate.co.nz and trademe.

Here is what realestate.co.nz says about their new property app:

The mobile revolution is in so many ways redefining the way we go about so many aspects of our lives. For the property market it is literally turning the process of finding your next home on its head.

I was sent an example of a property over the weekend where the level of viewing on the mobile app was significantly higher than for most properties, as can be seen from the chart below.

On most days in the past month over 1 in 4 of all views were from the mobile app (green colour at the top of each daily bar), as compared to maybe 1 in 10 of all views from a mobile for most properties on the market. This certainly reinforced to me the power of the mobile device as a discovery tool for property around you.

The drive to make this assertion is based on the fact that this property was listed over 6 weeks ago and on the web the property appears around the middle of page 2 of the search results – it is actually the 31st listings in sequence of properties in Frankton, Hamilton. This position in the search results usually leads to lower daily traffic as searching tends to be to the first page of search results and to recent listings, however as can be seen there was more viewing in the last 7 days on the mobile than on the web – why?

Very simply, the app is all about discovering property for sale around you and this property was obviously viewed by people in the neighbourhood looking for property to buy. That is why I say that the mobile app is turning property searching on its head. Whereas the web (much like the old newspaper classifieds) was all about top of page results, the mobile environment is all about context – what’s relevant to where I am right now.

As a point of note and to further validate this assertion I had a look at a couple of other similar properties on the market in the same suburb, the stats for their viewings are shown below:

Certainly looks like there are some very active users of the app seeking property to buy in the Frankton area of Hamilton at the moment – they can be easily seen walking the streets, smartphone in hand highly attentive to NZ’s favourite property app!

What Trademe is saying about their new app

The new Trade Me Property app will help you find your perfect home with minimum effort and maximum enjoyment using your iPad or iPhone. From the comfort of your couch or while you’re out and about, use this handy app to browse New Zealand’s largest collection of properties for sale and to rent – Trade Me Property.

Check property locations on the nifty map and save your favourite property searches so you can always see the latest properties that match your criteria. Use the watchlist to narrow down your picks, create open home appointments in your calendar so you don’t miss them, and share special properties with friends and family.

It’s all so easy and lots of fun! Best of all, there are more exciting features to come…

Trademe is partially blaming the rise of their success fees on the cost of developing these mobile apps. But as someone who has designed my own apps, there is no justification for a blanket rise in success fees based on mobile app development. They are raising fees because they can. Read article here

More reading:

http://www.voxy.co.nz/business/real-estate-app-hits-100000-downloads/5/132329

http://www.nziphone.com/news/site/apps-for-property-hunters-realestate-vs-trade-me.html

http://www.nbr.co.nz/opinion/trade-me-details-iphone-vs-android-app-uptake-soft-launches-video-sellers

Download the Realestate.co.nz App here:

Android     iphone/ipad

Download the Trademe Property app here:

Android     iphone/ipad 

I would love your comments. Do you have the iphone/android app of either company on your phone? How well does it fulfill it’s intended purpose of helping you find location specific properties for sale? Are there any other features they should be adding to the apps?

October 25 2012 | General Real Estate and Home Buyers | No Comments »

Using Kiwi Saver to help buy a home

If you’ve been struggling to get a deposit together for your first home or the bank is requiring you to have more equity before they will grant you a mortgage, it may be worth exploring the Kiwisaver angle. There are two options – a deposit subsidy or savings withdrawal.

Option One – Deposit Subsidy

After 3 years of contributing to KiwiSaver, you may be entitled to a first home deposit subsidy. The subsidy is administered by Housing New Zealand. This subsidy will be paid to your solicitor on the day the purchase of the property is settled.

If you are using your Kiwisaver as part of your deposit it may be a good idea to add an extra clause into the Sale and Purchase agreement that is drawn up when you make an offer on a house that reflects this along with your standard finance clause. The clause would look something like this:

“This agreement is conditional upon the purchaser receiving a full approval of the subsidy from Housing New Zealand in accordance with the KiwiSaver scheme and advising the vendor or the vendor’s solicitor on or before 4 pm on by [              ] that this condition has been satisfied.”

How long does the process take?

It can take a reasonable amount of time to have your application approved so it is best to get the process started and gain preapproval before making offers on a house. I gave Housing New Zealand a call before writing this post to find out more about the process. The person I talked to suggested that it would take around 10 working days (2 weeks) to find out if you are eliglble. Once an offer is in place and is unconditional (you as a buyer have completed your due diligence on  the house eg builders report, valuation, title check, lim report etc and committed to purchasing the house by paying a deposit), it takes another 4 weeks for the money to be released by Kiwi Saver to your solicitor for use in the house purchase. This means that your settlement date  (the date at which you become the owner of the house and start paying a mortgage on it ) should be at least 4 weeks after the unconditional date.

What the deposit subsidy is worth
The first home deposit subsidy is $1,000 for each year you’ve been contributing to KiwiSaver, up to a maximum of $5,000 for five years. If you’re a couple buying a house together and you both qualify for a subsidy, you could receive a combined subsidy of up to $10,000.

Getting a deposit subsidy
To be eligible for the first home deposit subsidy, you must:

# have contributed at least 2% of your income to a KiwiSaver scheme, or a complying superannuation scheme, for at least 3 years
# be buying your first home*
# be planning to live in the house for at least 6 months.
Income and house price caps will apply.

* If you’ve owned a home before, in some circumstances you may still be eligible for the first home deposit subsidy. Housing New Zealand will need to determine that you are in the same financial position as a first home buyer. To find out more, visit the Housing New Zealand website or call them on 0508 935 266. There is an intro booklet available here which takes you through the steps involved in purchasing a home.

Option two – Savings withdrawal to buy your first home

Another option if you aren’t eligible for the deposit subsidy is to try and some or all of your KiwiSaver savings (except for the $1,000 kick-start and member tax credit) to put towards buying your first home.

Some complying funds don’t allow you to withdraw your savings for your first home.  If you’re a member of a complying fund and want to use your savings for your first home withdrawal you’ll need to check with your provider to see if they offer this.

Making a first-home withdrawal

You must have been a KiwiSaver member or member of a complying fund for three or more years. You can only withdraw money to buy your first home – not an investment property.

If you have owned a home before, in some circumstances you may still be eligible to withdraw your savings. Your scheme provider may require you to contact Housing New Zealand to determine if you’re in the same financial position as a first home buyer.

How to apply for a first-home withdrawal

You’ll need to apply to your KiwiSaver provider if you want to make a first home withdrawal.

Find out more information on Housing New Zealand’s website.

There is a website that is a great resource set up for First Home buyers who want to learn more about the purchase process. It offers a FREE home ownership education course outlining everything you need to know about buying your first home in some detail. Visit Welcome Home First Steps to find out more.

The obvious alternative if you have questions would be to talk to your friendly local real estate salesperson. Feel free to send me an email or give me a call if you have any specific questions regarding purchasing a home that isn’t covered in the resources above. David Garratt – ph/text 0274374351 or 9382654  or email me. 

February 28 2012 | General Real Estate and Home Buyers | No Comments »

How to list your home for sale with an agent

The vast majority of properties in New Zealand sell through an agent under an exclusive agency agreement. Though selling your home yourself has always been an option, most home owners opt to employ someone who has had previous experience in doing this to market their home on their behalf.

You may be living in your first home and have only had experience in the market place as a buyer, or it may have been many years since you were last actively buying or selling. If so, you may not be sure of the process to go from wanna-move to SOLD.

Lets break it down into steps to make it easy…..

Contact an agent

Coming into contact with a licensed salesperson or agent (these are not necessarily the same thing) can either be an impromptu thing or part of a well thought out plan.

Just how do you decide on which agent to work with?

Visit some open homes in your area or have a look on the web by googling “real estate agent” followed by the area you are living in, check the local real estate publications, ask friends and neighbours for their opinions if they have recently been involved in a purchase or sale. Start by choosing someone who relate to you well, is positive and friendly, is knowledgeable in your market place, and is proactive in following you up or making contact.

The Current Market Appraisal 

More often than not, the first visit from a licensed salesperson (agent) involves a viewing of your property and its features and a brief “getting to know you” chat. This is known as an appraisal. After visiting, the licensee (as they are now known under the Real Estate Agents Act 2008) will go back to their office and come to an informed opinion of market value for your home based on recent comparable sales of other homes in your area and the homes that are currently on the market. You may also receive general marketing information and a summary of the current market conditions. Discussions about presentation and maintenance  can be had at this time if you are needing any pointers or tips from the agent to maximise the potential of your property.

In order to encourage your call, real estate salesperson in most cases, offer this consultation for free even though there is at least a couple of hours of work involved in meeting with you and tabulating the appraisal.

Listing your house with an agency

Here comes the scary bit! Signing on the dotted line. Real Estate agencies in NZ are required to have a signed agreement to sell your property before marketing can take place. There is no standardized agency agreement unlike the Agreement for sale and purchase. Each agency will have their own forms with variations around the same theme. It is important to be aware of this when comparing agency offerings.

To help give you a feel for what an agency agreement looks like, I have uploaded a PDF of my company’s agreement template here for you to read through. I have highlighted some of the important bits to consider when faced with such an agreement.

Though all agency agreements differ, they will cover many of the same bases. Some of details are private and will never be shared with buyers, some of the info is public and will be actively shared with buyers or interested parties. In general, the agency agreement is a private agreement between two parties and will never be shared knowingly with any outside parties especially on the agency side. These documents are guarded by the agency with their lives as they make up the foundation for the business arrangement with each individual home owner they are employed by.

There will be a part of the agreement that outlines the basic property information including legal description, property features such as age, section size, floor area, and chattels etc; contact details for owners and any tenants; and any further information that is important to be shared with salespeople in the agency for the day to day marketing of the property to buyers.

The second part of the agreement contains the legalease (is that a word?). The fine print covers the commission agreed on, appointment of agency, terms and conditions , any disclosures that either parties need to make, and also covers any vendor payments for marketing (if applicable).

Can agency agreement details be changed or negotiated on? 

Yes. Most vendors are happy to sign 95% of the fine print but items like commission rate, length of agency, style of marketing, vendor paid contributions, and complimentary advertising included in the commission can be discussed and negotiated on. These items are usually decided upon before the agency agreement is signed by both parties.

Beginning the buildup

Most buyers are first made aware of a new property for sale by seeing it in real estate publications, on  the web, noticing a sign, or being rung by proactive agents. Prior to this, there is a reasonable amount of preparation and coordination required by both the salesperson and the home owner. Photos need to be taken and uploaded, scripts need to be written and lodged with publishing firms, signs need to be made, flyers designed, and the home prepared for presentation to the marketplace. In an ideal scenario, all of the marketing is coordinated to hit the market at the same time. Print media  has the longest lead in time (some times up to seven days in advance is needed).

M for market day

M day begins your home’s exposure to the marketplace. Expect strangers driving by or stopping to look. Expect a group visit by all of the salespeople in the agency you have hired. Expect phones calls to bring buyers through during the week. Expect to leave the house for an hour on  Sundays so that your licensee can run open homes.

For more information on agency agreements and your rights and responsibilities, visit the Real Estate Agents Act website and view their official guide here 

February 28 2012 | Free House Appraisal and General Real Estate and Home Sellers | No Comments »

Pricing your home to sell – the 2-2-7 rule

How do you know what to advertise your home at when you come to sell and if it doesn’t sell, when should you re-look at your advertised price?

Trial and error and plenty of market experience has helped me formulate what I call the 2-2-7 pricing rule. Here’s how it goes….
If you are going to price your property in advertising and since it is the aim to achieve the highest possible price for your property, set the asking price for the initial marketing a little higher than we expect the market to bear (no more than 10% higher ideally). When a property first enters the market, momentum is generated, because all the qualified buyers (those in the price range who have been looking around for some time and are ready to buy) will discover the property for the first time. Competition peaks in the first 5 days to 10 days of marketing and buyers are most likely to make the highest offers for fear of losing out to someone else at this time.
If the initial marketing does not attract the desired offers, it may be necessary to consider varying the asking price. If the price remains the same for too long, the momentum of the marketing programme is likely to fall away, affecting the property’s profile and competitiveness.
It is important not to vary the asking price too early because it sends a signal to prospective buyers that the price is not genuine or that the vendor is perhaps too keen to negotiate.
Varying the asking price too late sends a signal that the seller is not aware of, or prepared to listen to, market forces – in other words, not genuine or realistic. Qualified buyers lose interest and the opportunities for receiving high offers diminish, along with the potential of achieving the best price at the end of the day.
Research with past satisfied sellers and a lot of trial and error over many years tells us that there is a simple two-point rule indicating the appropriate time to vary (reduce) the asking price.

This is known as the 2-2-7 Rule.
There are two conditions which must be met before this rule can be applied:
1. The property must be well-presented and free of any major legal or physical defects that would hinder the sale, and
2. The property must be professionally marketed to attract the attention of all current prospective buyers in the price range.

Provided these two conditions have been met, research indicates that the house will most likely sell in the first couple weeks. If it hasn’t sold and no offers have been received then a good time to alter an asking price is when there have been twoadvertisements and no response, or two open homes and no shows, or seven inspections and no offers. Which ever comes first.

It is usual for the first handful of buyers to come through your home to be some of the most motivated buyers in the market. Having been looking for a while, these buyers are also in the best position to have a feel for fair market value. Yes, the motivated buyers know the market value of your house much better than you do!

It is a common occurrence for a price change to happen too late and well after the listing has already become stale in the market place. This usually coincides with a change of agency also (owners usually blame the fact that there house hasn’t sold on the real estate agent and poor marketing but in most cases it is their own misconception of value that is hindering the sale).

If you are going to put a price on your home, then make sure you get accurate information in the first place so that you have a rational feel for what your home is worth in the market place.

The best start would be to get a list of recent comparable sales in your area. There are some great online resources available now including zoodle.co.nz (you can buy a report including recent sales online) and realestate.co.nz (having an awareness of the competition homes in your area that are on the market and what price expectations they have is good to give you a feel for where your home sits – remembering that buyers buy by comparing like with like to determine good value). A good real estate agent will be able to provide you with comparable sales info with his/her appraisal and talk about the value of your home in terms of these recent sales.

# Talk to a small sample of real estate sales people who are busy in your area, but do take what they say with a grain of salt. Salespeople may feel the need to overstate value to you if they know they are in competition for your house to sell with other agencies. There is a common strategy in real estate called buying the listing. In other words, a salesperson tells gives you an over inflated value for your home in order to secure the listing. This strategy usually includes signing you up for an exclusive agency for an extended period of time (more than a couple months). In this time they can bring your price expectations down as time passes with no sale.

The best way to get an accurate value indication from an agent is to let them know that if you decide to actively market your home, you will decide on the agent based on experience, personality, marketing plan, and the success and reputation of the salesperson and company, NOT on the salespersons opinion of the market value of your home. Don’t be swayed by mentions of optimistic values. The best price will be achieved not by the agent who thinks your house is worth M (market value) plus $20k, but by the agent who positively and professionally markets your home to the proper target market of buyers.

# Pay for a registered valuation.Another option is to pay for a registered valuation from an independent registered valuer. The important thing to note with registered valuations is that valuers are not infallible, and that it is an informed opinion of value only. There is no way of deciding on an exact dollar value of a house because there are emotional factors involved in a house that cannot be quantified easily like the dollar value of a view, or the last of the summer sun onto the deck, or the loss in value from having a power pylon in the back yard. Valuers usually get around this by making an allowance of 10% in the fine print of their valuations as a margin of error but that can mean a variance of $40k on a $400k house!

My general rule is that salespeople value optimistically and registered valuers value conservatively

The best definition of market value that I have found is this:

Market Value is the figure that a willing and informed purchaser will pay for a house and the willing and informed vendor will sell at. This definition assumes that both parties are rational, reasonable, and not under stress or duress in the sale process.

The real estate agent is there as a facilitator in this process and is doing his/her job well if you are getting good inquiry to advertising, regular viewings through your house, and is giving you honest feedback to help guide you in terms of value and presentation. Take note of what your agent says and try not to get defensive when negatives are mentioned about your home, this is the feedback from purchasers, don’t shoot the messenger. Your agent prefers to please you so any negatives mentioned by him/her have been carefully thought through and are worthy of taking note of to see if you can work around them or eliminate them. Remember that most feedback will naturally be negative because the buyers, when asked for their opinion, will be telling your agent why they have not bought your house. The positive feedback comes in the form of an offer!

This article was written by David Garratt – a salesperson with 14 years expereince selling residential properties in Wellington. Visit his website www.northernsuburbs.co.nz for news, views, and up to date stats from the coalface.

September 21 2011 | General Real Estate | 1 Comment »

The Psychology of Home Buying – An Idiots Guide

With more than 140 blog posts under my belt, sometimes the desire to write articles that are interesting, relevant, and fresh is hindered by a touch of writers block. I am constantly mulling over subjects and in my mind, piecing together drafts which I file away for future use when the need to push into new territory is apparent. For me, now is one of those times. I have called this post An idiots Guide simply because I don’t have any training in psychology (apart from first year lab work at Varsity). I have, however, formulated my own opinions and theories through experience at the property coal face over the last fourteen years. And this is what I am going to try and expound.

Some Background

Buying a house is scary

Home buying is the largest purchase that most people will ever undertake. As such, there are many factors tied up in the process. What prompts people to purchase a home and how do they go from desire to reality? Why is that the residential house market goes through cycles of high activity and slumber when the majority choose to move or stay put, invest or sell up? Lets try and break the process down.

Fear encourages Inertia

Just listen to the news, or your neighbour, and you’ll soon know about the state of the economy and hear it echoed by the general population. High gas prices — a declining national housing market — higher food costs — soaring insurance costs, and on and on. All of these economic conditions can make people (home buyers, especially) fearful for their financial future and strengthens inertia. When the future looks cloudy, the status quo appears safer than pushing out into the unknown. Staying put in the property you are living in seems safer than moving.

Hope encourages Activity

Beyond the effects of feeling fearful about the future, I would also suggest that home buyers need to hear positive messages and feel hopeful about the future in order to break the Status Quo and be excited about buying a new home. Sometimes this can be a self-contained hope — hope for how a home will make life better for their family or it can be a general feeling of positivity in the market as a whole.

Starting at the beginning – the need for shelter

The need for shelter is one of the most basic human needs. A gentleman by the last name of Maslow came up with a cool pyramid that he called the Hierarchy of Needs. His theory is that the lower levels of the pyramids have to be met before you can move up  the needs ladder. Property comes in on the second level after things like food, water, and oxygen have been met. You could even argue that basic shelter comes at this level under the “homeostasis” label (the need for a regulated environment in order to thrive).

Houses provide shelter from the elements and security at the most basic level, but as each level of needs is met, property begins also to meet other needs. The need for self esteem, confidence, achievement, respect by others and near the top of the pyramid, property can also express creativity, problem solving, and provide an environment for spirituality and self actualization (temples and churches are classic examples).

With all these layers of needs built into human beings, it is no wonder that many factors come into play when we focus on a person in a home buying quest. No two home hunting humans are alike in their desire, motivation, and needs. Getting to the bottom of this is the job of the agent when he is dealing with people at the coal face.

Pulling the Trigger

All house hunting begins with an event or events that act as a trigger to break the inertia and propel people forward and into the dark and murky house buying abyss. These triggers are as varied as the persons involved and may be positive or negative, incremental or short and sharp, large and live changing or simply a growing awareness that where you are living is no longer fitting the bill. Until something triggers the person/s involved, it is simply dreaming or dinner table conversation to that point. The birth of a baby, a marriage, a death or divorce, a loss of money or job, the kids having nowhere else to play when dad wants to watch the Rugby World Cup that makes him lose his rag and decide that a rumpus room is no longer desirable, it is necessary, an earthquake…..

Women First?

This initial motivation to act and not just talk about moving house more often than not, starts with the female side of the family or couple. I’m not sure why this is but from my experience, women appear to be the ones making the initial enquiries and are often the ones to make the final decision on the house they want if there is more than one choice that would fit the bill. It may be that they care more about the details or maybe they have more endurance to see the process out when often the male has given up and will settle for any number of homes as long as they tick the few boxes that he considers important.

The Search Begins

Self Assesment

For many people, the search begins in earnest with some introspection. What are my/our needs? What do I/want? What can we afford? Why am I/are we feeling the need to move? This self assessment can happen overnight or can be a laboured exchange over many months especially if one party is more motivated than another. Opinions can be strong, emotions can be high because house buying is not only a pragmatic journey but is also an emotional one and often involves a need for a basic level of self awareness and for compromise that can be painful if two or more headstrong people are involved. Who am I and what do I desire in life? How do I want others to see me? And how do answers to these types questions relate to the vision of house I want to buy?

This self assessment may not be a conscious process.

Information gathering

September 19 2011 | General Real Estate and Home Buyers and Home Sellers | 2 Comments »

The Property Checklist – things to look for when buying a house organised by decade

There are plenty of buyer checklists around, but I thought I’d take a moment and compose a basic list of the good and bad bits of housing in each of the building decades in NZ that I have experienced while working in the Real Estate industry in Wellington. This is definitely not an exhaustive list and I would love your input if there are things left off the list. I’m not a builder and this is not intended to replace a builders report. I’m also trying not to “bag” certain building eras and want to point out the strengths as well as the weaknesses. Something else to remember is that a house that has been added to or renovated may have good and bad examples of a number of construction styles and products.

Pre 1940′s

- check the piles (produced from native timber in this era). Look for signs of subsidance, piles not being strapped to bearers, rot, or missing piles and “spongy” or uneven floor boards.

- wooden flooring – may not be tongue and groove (drafty and squeaky). Made from moisture resistant native timber.

- check wiring  - any original wiring needs to be replaced as soon as it is found as there is a high risk of fires and shorts.

- plumbing – check hot water cylinder for age, original waste pipes (sewer and storm water) are porous and may become blocked with roots from trees and bushes growing in close proximity to the pipes.

Check the roof – may need maintenance if it hasn’t been replaced

- Insulation – no insulation in original homes of this period.

- Walls and ceilings maybe be scrim or fibre board rather than gib. Will need  to be replaced if you want a good paintable surface.

- Made from high quality native timber with a great resistance to rot and weather. Will need alot of effort in painting over time.

- check for borer

- lead in painted weatherboards? – be careful when removing

- impurities in window glass may spoil the views – cosmetic only. Check condition of any leadlight windows.

- check condition of light switches and electrical outlets, light fittings, door handles, door and window hinges, window catches – the cost of replacing period bits and pieces can add up!

1950′s

- Concrete began to be used in residential building on a large scale. Look for poorly mixed concrete in foundation structures concrete (crumbly seams in solid concrete walls and foundations).

- concrete piles began to replace wooden piles.

- experimentation with non wood exterior cladding systems – becomes brittle over time – check for cracking, asbestos, joints coming  apart.

- check for asbestos in any sheet products used on walls or as skirting for subfloor. Asbestos roof tiles or corrugate?

- check the wiring – replace if original, old meter box – big and bulky,  is it still inside?

- plumbing – hot water cylinder original? – low pressure cylinder – good pressure on hot feed at showerhead?

- good pressure on col feed? (Galve water pipes can block over time if water is hard)

- check for borer

- lead paint?

1960′s

- Generally a great building era in NZ. Solid well built homes predominantly weatherboard with iron or concrete tile roof.

- Wiring should be okay – older style wiring gave way to insulated (TPS) wiring. Meter box will be inside if it hasn’t been moved.

- plumbing – hot water cylinder need replacing? Original will be low pressure with a header tank in ceiling. Replace with mains pressure if hot water pressure is too low. Copper plumbing.

- concrete piles and concrete ring foundations – good!

- weak points – original corrugated roofs will be on their last legs but may still have a few years in them if they’ve been looked after.

- look for rot in weatherboards especially around corners, window frames and barge boards.

- no insulation in original homes of this era

- tongue and groove flooring – usually tighter, thinner boards – native wood rimu, matai, and some beech wood featured (may have small areas of borer – usually not a structural problem, more a cosmetic one.

- lead in paint on exterior? Oil based paints on interior ceilings?

- asbestos in any old lino that was put down in kitchens and wet areas?

- laundry – original concrete tub?

- original kitchen?

- Fireplace? woodburner in original chimney? – Has it been updated in the last ten years or is it past its useby? Check chimney for signs of cracking and gaps. Check flue and cowling. Any signs of leaking around flue?

1970′s

- move from wooden floors towards chip board – very sensitive to moisture and will swell and turn to mush with prolonged water contact. Composite products often used on window sills which may have swelled – replace with tanalised timber.

- early aluminium joinery – less painting needed than earlier styles of windows and doors. Check seals and latches on windows and runner wheels on sliding doors.

- asbestos! Have any sprayed ceiling checked for asbestos, sheet products, roof tiles?

- hot water cylinder? – if original, check for leaking.

- check for cheap and leaking plumbing fittings and taps (especially in the laundry)

- Homes into the mid 1970′s were usually insulated in the walls and roof – check roof space and replenish insulation. Insulate subfloor space.

- texture coated cladding? Check for cracking and moisture

- woodburner – in good order? If it is an original woodburner it will be well past it’s useful life. Plan to replace it. Any signs of leaking around flue?

- ventilation? Is a DVS style system retrofitted?

- wallpaper on walls or paint finish? Has a big effect on the time and energy needed to renovate or modernize.

1980′s

- early plastic plumbing – check for leaks or signs or moisture. Dux Quest?

- hardiplank cladding – generally a cladding system with few major problems. May get brittle over time – check for cracking and make sure joints are well sealed.

- homes of this era are generally insulated to a reasonable level.

- decramastic roof? – make sure it is free of moss/lichen. – May need rechipping and painting if it is original.

- chipboard floors – make sure wet areas are well sealed

- stippled or textured ceilings? Not usually asbestos but makes the house look very dated and can be a real pain to remove.

- homes of this era are generally of lighter construction than previous eras.

- tanalised wood framing – may have been treated with arsenic or chromium – don’t use in a woodburner and make sure you wear a mask when cutting or sanding. The health risks aren’t generally publicised but there was a move away from some processes used to make tanalised wood in the late 1990′s and early 2000′s. Retaining walls and raised garden areas probably made from  tanalised wood – be wary about planting gardens especially with nutrient hungry plants like fruit trees and tomatos near tanalised wood.

- better quality aluminium joinery – check seals and runners

- mains pressure hot water? Better pressure for showers

- unflued gas heaters?

- woodburner? – still in good repair? Was it permitted originally?

- ventilation? DVS style system installed? Are bathroom fans and rangehoods vented externally or into ceiling space?

1990′s

- Texture coated monolithic cladding – check for signs of moisture, cracking, movement

- Be wary of homes with unusual design elements – lack of eves, lots of angles, internal gutters, decks over living spaces

- Good insulation. Double glazing?

- Kiln dried timber framing? Rots very quickly if exposed to high moisture.

-  Gas central heating? Unflued gas heaters? Heatpump – need servicing?

- Plumbing – check for signs of leaks at joints and along lengths that are bent especially on hot feed.

- Ventilation? DVS style system installed?

- chipboard floors creaky or squeaky? They may not have been glued and screwed. Plan to do this when the carpet is replaced or get a builder with a nail gun to fire pins into the joints on an angle to stop the creaks.

- tiled wet areas well sealed? Check for signs of moisture and for cracks in tiles and grout.

2000′s

- Excellent insulation including some double glazing and central heating.

- monolithic cladding?  - check for signs of moisture, cracking, movement on exterior

- plumbing – check for leaks at joints and along lengths that have been bent or curved especially on the hot feed.

- Concrete pad – no subfloor area? Can make it harder to upgrade plumbing, telephone/broadband  and electrical

- Walk in wet areas? Check for signs leaking in adjoining rooms or in spaces below the bathroom.

- Ventilation? HRV or DVS style systems

- Heatpumps – have they been serviced?

2010+

- Double glazed – great insulation

- Home Ventilation system installed?

- Heating options? Gas central heating or heatpumps? Underfloor?

- Builders guarantee? Able to be transferred to new owner?

- Has house been built and plumbing installed to manufacturers specifications? Have plumbing run through ceiling or in under floor space (if there is any) so that it is easy to fix or add to down the track. Any sign of stress to plumbing joints?

- Broadband wiring? Surround sound wiring in living spaces?

- Cavity systems used for cladding – more protection against leaks in cladding.

Hopefully this list has been of use to you.

If you have any further things to add to any of the decades, feel free to leave a comment and I’ll add your suggestion.

List compiled by David Garratt – Guardian First National – North Wellington. www.northernsuburbs.co.nz

Print a PDF version of this checklist from my website here

September 01 2011 | General Real Estate | 4 Comments »

Problems with your pipes? The poly pipes plumbing issue

Every era of housing has their strengths and weak points in terms of building materials and construction. For homes built in the late 1970′s and into the 1980′s, it is important to check the plumbing system. During this period, the first polybutylene plumbing was introduced. One of the brands that has been highlighted to be of major concern is Dux Qest (it is usually black (the black scourge one old builder called it when talking to me) and often has Dux Qest (or Quest) written in white along some of the pipe lengths). Some of this plumbing is now 25 years old and past the manufacturers expected lifetime as well as being well out of any warranty period. With Qest installed in more than 20,000 homes in NZ and millions worldwide, this will become an even bigger issue as time goes by.

After talking with a number of local plumbers, it  is obvious that this pipework has been an issue for years and teamed up with the move from tongue and groove flooring towards the cheaper chipboard flooring products which swell and turn to mush when exposed to high moisture, can cause a bit of a headache for leak victims.

The tradesmen I talked to said that the leaks are caused either by the pipes splitting down the length or at the joints.

It may be more of a problem in homes with very high water pressure and leaks can exhibit after an old low pressure hot water cylinder has been replaced with a newer mains pressure cylinder lifting the water pressure dramatically in the hot water feed.

I’m told that the stress on the pipes can also be greater if the piping has been bent or curved around corners rather than using joints.

Another plumber said that the joints themselves are often the points that go first especially if they are under stress. The joints are secured to the piping lengths by crimped aluminium or copper rings. These rings can sometimes be over or under crimped and they expand and contract with heat and cold and may eventually split allowing the joints to come apart.

Something that I have seen personally, is a leak caused to poly piping by being gnawed by a rat! The rodent was obviously thirsty and bit a hole in the piping causing a small leak. A good reason to have a bait station in the underfloor and in the ceiling space of your home!

Some articles on the web have suggested that if the piping is exposed to lots of sunlight it can fail with the ideal being less than 30 days of sunlight exposure. But what if a coil of piping or a bucket of t-joints and elbows has been carted around on the back of a truck or been sitting in a plumbing van for months?

Other “experts” blame water with high clorination as the culprit which may explain higher failures in some areas of the country than other areas. Whatever the cause, the fact remains that this style of pipe work isn’t as good as old school copper plumbing.

Plumbing has come a long way even in the last twenty years, but most of the residential water piping I have seen being installed in new housing developments even this week is grey poly piping and after reading posts online from the United States I asked my plumbing contacts if these water pipes will also have issues down the track and they have said potentially yes, with some problems already showing up where the piping hasn’t been correctly installed to manufacturers specifications or short cuts have been taken or not enough care taken. Many plumbers have moved to brass joints with copper rings to hopefully avoid future issues. One brand of plumbing that was mentioned to me and thought to be worth consideration is Secura ( This isn’t an endorsement as I have very little experience with plumbing pipes and fittings, check it out for yourselves).

What does the Council or Government think about the issue?

I found the following press release relating to this plumbing (and I quote)

Tuesday, 19 April 2011, 8:59 am
Press Release: New Zealand Government
Dux Quest plumbing withdrawn 24 years ago

“Dux Quest was withdrawn from the market about 24 years ago. It pre-dates the current Building Code and the Building Act,” Building and Construction Minister Maurice Williamson said.

“I am advised it was one of the first Polybutylene plumbing systems introduced into New Zealand in the early 1980s. When the piping was found to be problematic Dux Industries widely publicised the situation. They offered to replace the product for homeowners or pay for replacement material.”

In that era building consents were in the hands of borough councils, not the Government.

The Building Code; which includes plumbing and drainage; became fully effective on 1 January 1993. The Department of Building and Housing has powers to take action over products which result in buildings failing to comply with the New Zealand Building Code. The New Zealand Building Code is not retrospective.

“Issues with Dux Quest plumbing have never been raised with me in my two and a half years as Building and Construction Minister,” Mr Williamson said.

Mr Williamson said people concerned their home or business may contain Dux Quest plumbing should contact a certified plumber for an inspection. “

Your plumbing can affect your sale price

Obviously, the powers that be haven’t yet come to the full realisation that this is a serious issue for 1980′s homeowners and may become an issue in the future for the owners of modern day homes.

At the house buying and selling coalface, however, the Quest issue comes up regularly in 1970′s and 1980′s homes when purchasers have building inspections conducted on their behalf. Any Quest plumbing will normally be highlighted in the building report as substandard and more often than not, the buyers, if they are not scared off purchasing the property at that point, will come back to the owners to renegotiate the price to reflect the remedial replacement work that will have to take place to make sure the plumbing doesn’t have problems.

Insurance Issues

What many homeowners don’t realise is that many insurance companies won’t payout if this problematic plumbing leaks and causes damage.  If you are lucky, you may get paid out once for damage but after this point, you are considered to have been made aware of the problem and no further payouts will happen if you don’t get the plumbing attended to and further damage takes place.

What can you do if you own a house with Dux Qest (Quest) plumbing?

• Have your plumbing checked by a qualified tradesman asap. There may be small leaks or areas of stress that are easy and cheap to fix which could cost thousands of dollars of damage if left.
• If you have a mains pressure hot water cylinder, have pressure limiting valves installed on the hot to keep the pressure from being too great and stressing the pipework.
• Turn off your water at the toby when you go away on holiday. An easy safeguard that could save you a rather stressful post holiday problem. I heard of one house where the pipes burst in the wall of an upstairs bathroom and water was pouring through the upper story of the house for three days. You can only imagine the amount of damage that took place.
• Look at replacing your hot water piping at the very least, if not all of the plumbing. This can be done when you upgrade bathrooms, kitchens and laundries. It may not be as expensive as you think.
• Have plumbing installed under the floor or in roof cavities that are easy to access rather than in walls if possible.
• Check your insurance policy – look for sentences like “ongoing  or gradual water damage” which usually applies to leaky building type issues but may be used as an opt out by the insurance companies if your pipes spring a slow leak.
• If building a new home, pay the money and have copper piping installed especially on the hot feed.
• Make sure the plumbing is installed by an experienced and  qualified company to the manufacturers specifications.

If you are buying a 1980′s home

• Make sure you get a builders report by someone who knows what they are doing and who is comprehensive in their approach. Moisture meter testing can pick up potential leaks behind walls that may not yet be obvious to the eye.
• Ask the agent or get them to ask the owner if there has been any problems to date with the plumbing.
• Be aware that this is a potential issue with homes built in the 1980′s. It shouldn’t necessarily stop you from purchasing a home of this era, but forwarned is forarmed. Be aware that you may need to spend some money down the track maintaining or replacing this pipework and reflect this in the price you offer to the buy the house for but be realistic, don’t play silly buggars and try to have $20k wiped off the price, most owners would tell you to get on your bike and you’ll miss out on buying your dream home. Get a realistic quote from a plumber and use this as evidence in renegotiations if you are going to follow this route.
• Make sure the building inspector checks  the plumbing in more than one place in the house, often homes will have a mixture of old and new plumbing reflecting either fixes to past problems or renovations to amenity rooms.

My website www.northernsuburbs.co.nz

August 22 2011 | General Real Estate | 2 Comments »

The time it snowed in Wellington

Check out my website for images I took last week of the snow in North Wellington

August 22 2011 | General Real Estate | 1 Comment »

Are the stats always right? Depends who you listen to!

I had a little chuckle while comparing two media articles who used the same house stats released from Quotable Value. Both media commentators took a different view from the sales data. Have a read for yourself. House prices are either plummeting or the market is stable. What do you want to believe?

House prices plummet – stuff.co.nz

“House prices fell by nearly $12,000 in the three months to March as market volatility continued, according to the latest figures from valuation firm QV.”

House values stable – The National Business Review

“New QV figures show national residential property values remained relatively stable in March, while signs of increasing activity were noted in Auckland and Wellington.”

Reading through both articles, I know which source I would choose.

April 16 2011 | General Real Estate | No Comments »