Many New Zealanders who are in the process of buying and selling a house will be affected by the Covid-19 Alert Level 3 guidelines.
Under Level 4 restrictions, many settlements could not be completed because the vendor could not move out and the purchaser couldn’t move in.
What will level three look like?
If you had signed up to an agreement pre-lockdown, and settlement has been deferred, you may now be able to settle earlier than you thought. Under Alert Level 3, purchasers and vendors are permitted to move homes including moves that require inter-regional travel.
Physical distancing of 2 metres is still a requirement and, where possible, all physical interations must be as contactless as possible. Real Estate Agencies will be re-opening under alert level 3 and an agent can enter people’s homes, meaning private viewings and pre-settlement inspections can be arranged by appointment. Removal companies are also permitted to operate, however they are only permitted to enter homes that have no one at home. If you are intending on using a removal company, then you should look at when they will be available.
I’m looking at buying a house, what should I do?
Great news! Since Real Estate Agencies will be operating (even restrictively), the thousands of people around the country who have been in limbo over the past few weeks can now move forward with their property transactions. Therefore, if you have been holding off looking at a new rental or a property, you will now be able to do so in a very limited manner.
Under alert level 3, open-homes and auctions are not permitted as gatherings are limited to less than 10 people. If you were interested in a property listed as an auction, some vendors have elected to re-start the auction marketing of their home as soon as viewings are permitted. An offer can still be made before an auction because the vendor may be comfortable withdrawing from the auction process and selling by another method.
There are things you can be doing as a purchaser which put you in a unique position. Alert Level 3 can be used to get your ducks in a row. Banks are still operating therefore financal approval is still possible. Most mortgage brokers are also active, working from home and in a position to remotely prepare applications.
Additionally, the Reserve Bank has announced that it plans to remove loan-to-value ratio restrictions on residential mortgage lending for at least a year i.e. the amount of your loan compared to the value of your property. This could mean a decrease in the deposit amount required for home buyers.
Properties will be accessible to builders during Level 3, therefore you will be able to organise a builders report. But due to social distancing restrictions, you will be unable to be onsite with the builder. You can also order a LIM report from the local authority.
Should I withdraw my property from the market?
During the isolation period millions of New Zealanders are spending more time than ever online. This can be used to your advantage by getting creative with your marketing. Most agencies will continue to market properties with open homes and auctions being deferred until movement restrictions have been lifted and your bubble has been extended. However, private viewings and pre-settlement property inspections can be arranged with an agent during alert level 3.