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Transcript

Offer Smarter In The NZ Property Market · That Home Loan Hub

• 0:10
  SPEAKER_00: So in the previous episode, we've covered if you know the statistics and whether you should be making an offer based on statistics.
• 0:17
  SPEAKER_00: Now, listen up to this episode as we dive a little bit further on how you really should be making an offer if you were to make one.
• 0:25
  SPEAKER_00: Awesome.
• 0:26
  SPEAKER_00: Hello, Megan.
• 0:26
  SPEAKER_01: Hello.
• 0:27
  SPEAKER_00: Good to have you back.
• 0:28
  SPEAKER_01: Thank you.
• 0:29
  SPEAKER_00: So we talked about the statistics.
• 0:32
  SPEAKER_00: We talked about how sometimes the statistics can be outdated and if people are relying on them, especially out of region, you know, it's really, really hard.
• 0:39
  SPEAKER_00: And one thing that we didn't really mention is, for instance, certain areas may not have as many sales.
• 0:44
  SPEAKER_00: And if those sales were below average or below RV, rateable value, then that will really mess up the offers on the future houses.
• 0:55
  SPEAKER_01: Yes.
• 0:55
  SPEAKER_01: If people are relying on the council valuations, which we talked about, are three years out of date.
• 1:00
  SPEAKER_01: And if they're relying on, like, for example, we're in June now, if we're relying on April's sales data, which is also out of date, what do they do to figure out what an offer should be?
• 1:13
  SPEAKER_01: And we talked offline about like the data itself can be a little bit dodgy because if there's only two sales, maybe in Foxton Beach, for example, and one of them is very low because the house needed lots of work, then even the data is not that accurate because a sale above RV is what you would expect for Carpeti.
• 1:36
  SPEAKER_01: But then if a house isn't the greatest house and needs lots of work, it might sell for less than RV.
• 1:42
  SPEAKER_01: And then when the data gets published, they're like, oh, it's well under RV, but there might have only been two sales.
• 1:48
  SPEAKER_01: So the average is like a bit skewed.
• 1:51
  SPEAKER_01: You kind of want a lot of sales points of data to get an average that's accurate and reliable on that you can rely on.
• 1:58
  SPEAKER_00: So how can they do that?
• 1:59
  SPEAKER_00: How can they?
• 2:00
  SPEAKER_01: What we do is we when we appraise a house with a homeowner, we give them some comparable sales, and we only usually go back three months.
• 2:08
  SPEAKER_01: And even three months can sometimes be, you know, dramatically different.
• 2:12
  SPEAKER_00: Like if especially in the hot market or in a market where things started to drop off quite quickly.
• 2:18
  SPEAKER_01: Yeah, well, if you think about the last few months in New Zealand, like we've been impacted by some things overseas, like, you know, fuel crisis.
• 2:26
  SPEAKER_01: Dubai, fuel price crisis.
• 2:29
  SPEAKER_01: Um, the guy with the orange hair, like anytime he opens his mouth, you know, people panic.
• 2:34
  SPEAKER_01: We've just had a whole bunch of redundancies announced as well, like in Wellington.
• 2:39
  SPEAKER_01: So there's there's a whole lot of things that can impact, you know, the property market.
• 2:43
  SPEAKER_01: So going back more than three months is really inaccurate unless it's a suburb that doesn't have very many sales ever.
• 2:50
  SPEAKER_01: But like a place like Paparam or Waikanae or something like that is pretty pretty standard.
• 2:55
  SPEAKER_01: So three months is more than enough.
• 2:57
  SPEAKER_01: And then we look at houses, so we might say, okay, your house is three bedroom, 100 square meters.
• 3:02
  SPEAKER_01: So we try and look at other houses that are also three bedrooms and a hundred square meters.
• 3:08
  SPEAKER_01: But you might get the odd two-bedroom house that is a hundred square meters.
• 3:12
  SPEAKER_01: You might have a house that's on a cross lease versus freehold.
• 3:15
  SPEAKER_01: So that's what real estate agents do when we appraise houses.
• 3:19
  SPEAKER_01: We try to find comparable houses.
• 3:21
  SPEAKER_01: And if they're slightly different, we write in the notes, you know, this one had a cladding issue, or this one had subsidence, or this one has just been fully renovated.
• 3:32
  SPEAKER_01: I know there's double glazing in that house because we might have been through it.
• 3:35
  SPEAKER_01: So that's how we kind of say, well, the house that you're looking to make an offer on is either better or worse.
• 3:43
  SPEAKER_00: I remember the word was inferior.
• 3:45
  SPEAKER_01: Inferior.
• 3:46
  SPEAKER_01: It's so mean, isn't it?
• 3:48
  SPEAKER_01: But you know, it sits in a in a niche in the market somewhere.
• 3:52
  SPEAKER_01: There'll be some houses that will be more valuable and some less valuable.
• 3:55
  SPEAKER_00: Yeah.
• 3:56
  SPEAKER_01: Inferior is so mean.
• 3:58
  SPEAKER_00: And I guess this just points out that why people shouldn't really try to sell their own houses either.
• 4:03
  SPEAKER_00: Because you just don't know how what value, what price tag you should be placing on your house.
• 4:08
  SPEAKER_00: Yeah.
• 4:09
  SPEAKER_00: And a lot of the time people do sell their house below the value what the agent could have actually sold it for them.
• 4:16
  SPEAKER_00: Because the agent is data-driven.
• 4:18
  SPEAKER_00: You guys not just looking pretty and turning up and flash cars, you actually do do a lot of work behind the seas, I would imagine.
• 4:26
  SPEAKER_01: So um just that amount of market knowledge.
• 4:29
  SPEAKER_01: Like we caravan every single property that Harcourts has on the Carpentri coast.
• 4:33
  SPEAKER_01: Like every Monday, we go through every single property.
• 4:36
  SPEAKER_01: So if you wanted to know like about our market here, we've got a pretty good insight.
• 4:42
  SPEAKER_01: You know, we've probably been through a lot of the houses in Carperty over the years, like within our team.
• 4:48
  SPEAKER_01: Yeah.
• 4:49
  SPEAKER_01: Yeah.
• 4:49
  SPEAKER_01: And we can do this for buyers as well.
• 4:51
  SPEAKER_01: So we were saying just before, you know, this is what we do when we appraise a house for a homeowner.
• 4:56
  SPEAKER_01: But we've got, like, we've just had a house down on Manley Beach, and one of the buyers came through and said, Could you send me all the house price, like the house sales for Manley Street in the last three years?
• 5:11
  SPEAKER_01: So I just went on to our system and I downloaded that for her.
• 5:15
  SPEAKER_01: Obviously, we don't provide names and I, you know, personal information, but we can provide house sales of houses on that street, or we can provide comparable sales within the area of like two or three kilometers within that that house price, the house's location.
• 5:32
  SPEAKER_00: What made me think of was homes.codit and z.
• 5:35
  SPEAKER_00: Often they have if you search an address, it pops up with like a whole street, and the street might have red dots, blue dots, green dots, whatever dots.
• 5:44
  SPEAKER_00: Yeah.
• 5:44
  SPEAKER_00: So uh how reliable is that, do you know?
• 5:47
  SPEAKER_01: Yeah, buyers rely on it.
• 5:48
  SPEAKER_01: It does worry me a little because again, like the council valuation sees a site unseen often.
• 5:54
  SPEAKER_01: I believe homes is owned by TradeMe, so they do have access to a lot of price data because when the house sells, we update the sale price in there and that feeds through.
• 6:05
  SPEAKER_01: So there is a bit of it can be hit and miss depending on like the algorithm thinks that it's roughly that.
• 6:13
  SPEAKER_01: But there's nothing like actually having somebody go through who's experienced and say, oh well, it has got double glazing, but like homes wouldn't know that.
• 6:22
  SPEAKER_01: Yeah.
• 6:22
  SPEAKER_01: Or it might be a defective title if it was a cross less because they've built something without permission, or like all these little things can really impact value in a good way or in a bad way that we could just tell people if they wanted to ask us.
• 6:37
  SPEAKER_00: Yeah.
• 6:38
  SPEAKER_01: Yeah.
• 6:38
  SPEAKER_00: But also what I find sometimes is that if buyers can work with the agent and actually go, hey, I'm looking to offer 800k.
• 6:46
  SPEAKER_00: Do you think they will accept it?
• 6:48
  SPEAKER_00: Yeah.
• 6:48
  SPEAKER_00: And you know you've appraised it between 850 to 900.
• 6:51
  SPEAKER_00: So you know they're 50k offered.
• 6:53
  SPEAKER_00: Yeah.
• 6:53
  SPEAKER_00: Would you still present their offer?
• 6:55
  SPEAKER_01: Yeah, I would.
• 6:56
  SPEAKER_01: Yeah.
• 6:57
  SPEAKER_01: And I mean, I would probably give them some guidance.
• 7:00
  SPEAKER_01: I don't like misleading people.
• 7:01
  SPEAKER_01: So I might say, Oh, well, I know that they're hoping for more.
• 7:05
  SPEAKER_01: Because like your first offer is your dream price, right?
• 7:08
  SPEAKER_01: What you'd like to buy for.
• 7:10
  SPEAKER_01: I always think it's worth trying.
• 7:12
  SPEAKER_01: So we'll put it on paper.
• 7:14
  SPEAKER_01: I don't do verbal negotiations.
• 7:16
  SPEAKER_01: It's like, it's not worth anything unless it's in writing.
• 7:19
  SPEAKER_01: So we'll write it up.
• 7:20
  SPEAKER_01: We'll put on your dream purchase price.
• 7:22
  SPEAKER_01: If we can get it for you, wonderful.
• 7:24
  SPEAKER_01: But I'll probably say, hey, look, I think they'll want more, but let's give it a go.
• 7:28
  SPEAKER_01: And then we'll go to the homeowner and we'll be like, this is the offer.
• 7:31
  SPEAKER_01: What do you think?
• 7:33
  SPEAKER_01: And they'll usually come back saying, We'd like a little bit more.
• 7:37
  SPEAKER_01: And then I'll go back to the buyer and say, hey, you know, as expected, they want a little bit more.
• 7:42
  SPEAKER_01: Do you want to increase your offer?
• 7:43
  SPEAKER_01: Or do you like to maybe they have a settlement date that's really important to them?
• 7:47
  SPEAKER_01: Can you change your settlement date?
• 7:48
  SPEAKER_01: Or are there any conditions that you could like kind of do some work in advance so that you've got less conditions on it?
• 7:55
  SPEAKER_01: Or, you know, and we work with the mortgage advisors as well to try and make sure that it's all kosher.
• 8:01
  SPEAKER_00: Yeah, no, that's awesome.
• 8:02
  SPEAKER_00: Because yeah, a lot of the time when my clients come to me and I usually indicate to them their maximum purchase price as well.
• 8:08
  SPEAKER_00: And I always encourage them not to go above and beyond that.
• 8:11
  SPEAKER_00: So always stay below the maximum because at the end of the day, it's them that needs to pay the mortgage back.
• 8:18
  SPEAKER_00: Yes.
• 8:18
  SPEAKER_00: And we don't want to put anyone in a position where they've borrowed way too much.
• 8:23
  SPEAKER_00: You know, you see far too many horror stories on Facebook recently where they go, Oh, you know, bought this house, now we can't afford it.
• 8:29
  SPEAKER_00: And you know, it only takes someone to lose a job.
• 8:31
  SPEAKER_00: It only takes someone to get really unwell, and then suddenly they lose their whole income.
• 8:36
  SPEAKER_00: Yeah.
• 8:36
  SPEAKER_00: And if they haven't had insurances in place or whatever, then it really affects.
• 8:42
  SPEAKER_00: And then if they have to sell the house.
• 8:44
  SPEAKER_01: Oh, I know it's a tragedy.
• 8:46
  SPEAKER_01: Yeah.
• 8:46
  SPEAKER_00: It's gonna cost them again to sell the house, the agent fees.
• 8:50
  SPEAKER_00: So they actually may lose the money.
• 8:52
  SPEAKER_00: So you I always encourage my buyers to do a thorough research before they commit to a certain price because a lot of the buyers, if they're they're buying the first home or even the second home, they get emotionally attached and then they get silly and then they try to overbid in their own head of how much they can afford.
• 9:09
  SPEAKER_01: Well, we we we're the same.
• 9:11
  SPEAKER_01: Although we're employed by the homeowner to sell the house, all we are is the messenger.
• 9:17
  SPEAKER_01: So if the homeowner doesn't want to pay to accept an offer that is an acceptable amount to the buyer, then maybe we can find them another house.
• 9:27
  SPEAKER_01: You know, so while we try and negotiate and everything with that buyer, if the buyer says to us, Hey, that's my maximum, that will be respected.
• 9:36
  SPEAKER_01: Like we say, okay, yep, that's your maximum.
• 9:39
  SPEAKER_01: They've said no.
• 9:40
  SPEAKER_01: What else can we show you?
• 9:42
  SPEAKER_01: You know, because we don't want to put people in that position either.
• 9:45
  SPEAKER_01: Yeah.
• 9:46
  SPEAKER_00: No, beautiful.
• 9:47
  SPEAKER_00: So just to summarize, for those that are looking to make an offer and you're relying on data, don't rely on it too much.
• 9:54
  SPEAKER_00: You know, have it as a bit of a guidance, but don't rely on it too much.
• 9:57
  SPEAKER_00: Talk to the real estate agents, they should be able to guide you a lot more because they are the ones working with the vendors, they're the ones that know the region, the prices, etc.
• 10:07
  SPEAKER_00: And if you are looking to put an offer, just always double check whether your finances are up to scratch and you can get insurance.
• 10:14
  SPEAKER_01: And your Kiwi Saver, if you're using KiwiSaver, make sure you leave enough time to withdraw from it.
• 10:21
  SPEAKER_00: Oof, that's a whole episode on its own.
• 10:23
  SPEAKER_00: And we did actually record one of those.
• 10:25
  SPEAKER_00: So if you go onto my podcast, if you search Kiwi Sabers, there will be several episodes that will pop up with that subject in mind.
• 10:31
  SPEAKER_00: Awesome.
• 10:32
  SPEAKER_00: Thank you so much, Megan.
• 10:33
  SPEAKER_00: Lovely to have you here.
• 10:34
  SPEAKER_01: Thank you.