Downsizing your home without drama

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IF your home is starting to feel a little too roomy, or the prospect of spending all weekend slaving in the garden no longer appeals, it may be time to think about moving on.

You don’t have to sell up and head to a tiny house, but downsizing can bring many benefits – especially if shifting to a smaller home frees you up financially.

It can be daunting to consider moving, but you may find looking for a property to buy is much easier than the last time you did it. Gone are the days when you had to wait for the agent to show you a list of houses, or make an appointment to view them. You can now examine a property inside and out, check current valuations and do a host of other related tasks by using your smartphone.

However, technology hasn’t changed the fact that buying a home is still a big deal even if you’ve done it many times before. Once you factor in the emotional elements and logistical challenges of leaving the family home, it can be enough to make you want to stay put.

“Unfortunately, buying a smaller property doesn’t make the process any less complicated,” Real Estate Agents Authority (REAA) chief executive Kevin Lampen-Smith said.

“If you are downsizing the family home and moving to a smaller property, or a retirement village, you need to carefully work through the process. You may think you’ve done it all before, but it’s still important to do your homework to minimise any risks.”

Not sure where to start? Here are the REAA’s top tasks for home buyers and sellers:

BUYING

1. Research the property

Remember that the real estate agent selling the property is acting on behalf of the seller. They are also required to tell you everything they know about the property; they must respond professionally to all your inquiries and not withhold any details. However, you still need to do your own due diligence. That means getting a title search so you can find out all the facts about the property’s ownership, boundary and access, as held by Land Information New Zealand (LINZ). It’s a good idea to get a Land Information Memorandum (LIM), which shows information held by the local council about the property and land. For valuable feedback on the property’s condition, get a report done by an inspector who has professional indemnity insurance and carries out their work in accordance with the New Zealand Property Inspection Standard. Although this all costs money, it will save you more in the long term. Sellers may occasionally provide some of this information for you. If this happens, check that it is up-to-date.

2. Get legal advice

It’s absolutely crucial to get legal advice before you sign anything. Buying a property is a huge financial commitment, but it can cost even more if something goes wrong. A lawyer will handle all the paperwork involved in the process, including the title search, and offer impartial advice. Without legal advice, you might miss or misunderstand the implications of things like easements, rights of way, apartment maintenance responsibilities, correct boundaries or use limitations from town planning. If you don’t have a lawyer, the New Zealand Law Society can help you find one at propertylawyers.org.nz

3. Understand the sale process

There are several methods of buying and selling property, for example, tender or auction. It’s important to understand the process for the property you are buying. Practices can vary between agencies, so make sure you confirm details with them. The Home Buyers Guide at buyingahome.reaa.govt.nz has more helpful advice.

4. Read the sale and purchase agreement and understand what it means

The sale and purchase agreement is your contract with the seller. It is crucial to read it very carefully and get legal advice before you sign. You can negotiate the terms and conditions of an agreement, but once you sign it, there’s no going back.

SELLING

1. Get legal advice

Choose a lawyer before you set out to sell – selling can be a fast-moving process. Get legal advice before you sign anything, including any agreements with the real estate agency you have chosen to market and sell your property. These agency agreements, and sale and purchase agreements, are legally binding documents. You should consult your lawyer before you sign them.

2. Choose a real estate agent

The real estate salesperson works on your behalf, so it’s important to choose someone you feel comfortable with. You sign an agency agreement together and you pay them a commission when the sale is complete.

Even if you know your salesperson personally, or a friend recommends them, use the public register at reaa.govt.nz to check their details and that they’re licensed.

3. Understand the sale process and method of sale

It’s important to choose the sale process that best suits your circumstances. Talk to your salesperson to find out what they recommend. Make sure you understand the process you’re using to sell your property. Practices can vary between agencies, so make sure you confirm details with them. The Home Sellers Guide at sellingahome.reaa.govt.nz has more information about the different sales methods.

4. Read the sale and purchase agreement and understand what it means

The sale and purchase agreement is legally binding, so it’s important to read it carefully and get legal advice. The REAA publishes a sale and purchase agreement guide, which the real estate agent must give you before you sign a sale and purchase agreement. We recommend you read the guide early in the selling process.

Need more advice on buying or selling a home? Go to reaa.govt.nz

– Supplied by the REAA

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