Home Buying Advice

Things we discovered in the process:

• There is no such thing as a ‘deal’ - anything that is objectively a good house usually be snapped up by someone - another buyer or an investor.

• We initially hoped to get a cheaper house by finding a unique house, something a bit weird we'd like but others wouldn't like…this didn't seem to exist. Most of the factors making something a decent house we found were pretty universal (perhaps we’re not that unique). When we figured out what we really wanted - it seemed to be what others wanted to! People tend to appreciate objectively good things about houses like sun, modern features, extra features like garages/decks/landscaping etc. 

• People don't seem to see the 'hidden costs' as much as they should. We found expensive things which save money later on - new roof, fences, carpets, electricals and plumbing to not be as widely valued by the market as 'luxury' features of houses - e.g spa's, outdoor areas etc. 

• What you can hope for is to get a good house in for a ‘fair’ solid price, with no or minimal major problems to deal with - the main goal is to avoid a regretful outcome. It seemed that getting great outcome is fairly unlikely and is just more unlikely the further towards the affordable end of the market you are unfortunately. 

• There's always another house - be ready to walk away. You'll get a sense over time how often a house suitable for you comes up - for us was every few weeks. But for a great house meeting all our criteria that was about every 2 months (you can tell from this guide - out criteria was picky!)

• The houses we really liked tended to sell quickly, sometimes they'd be under offer within a week or two (if not an auction). So good homes do sell fast even in this market. But some sit on the market for months.

• We were quite selective when getting more serious as we knew what we wanted, and to avoid open home fatigue.

• We got emotional each time we missed out or ruled out a house, but a new house would always come up again. It’s important not to get pulled in by FOMO (fear of missing out) for a 30 year commitment.

It can be stressful

• Unfortunately buying a house is a huge decision (for most of us, the biggest purchase you will ever make). It is inherently stressful, there’s no getting around it. You can take steps to manage your stress to avoid making overly emotional or anxiety driven decisions.

• The other side is - sometimes we see some ‘it’ll be right’ attitudes towards buying a house. This makes you feel less anxious, but then often leads to NZers being negligent in researching things they should.

• The process itself is done in a way that drums up emotions, from the setup of auctions and deadline sales to create urgency and scarcity, to the high energy music played during auctions and the speed at which auctioneers speak.

Try to stay objective

• It's impossible to not be affected by influencing factors, it's simply human. Being aware that you’re being influenced is useful however.

• Come back again and again to the objective things – the document you fill out with what’s important to you in a house, the budget you make, the price you set as your maximum for a house.

• When you're talking to real estate agents, it's good to keep these things in mind - it's good to seem interested in a home, but be very clear that you want to be thorough and do your due diligence, and you don't want to seem overly emotional and like someone who could be talked into letting things slide.

People will have opinions

• Housing can be a heated topic in NZ and many people will have opinions what you should do e.g. “just pay 30k more because housing always goes up”.

• Keep in mind that you know yourself the best and what you want. Take others’ opinions into account, but the reality is no one knows the definite best decision. A decision that worked out for someone else may not work out for you.

• As well, keep in mind people often have a bias to justify their own decisions e.g. if they bought a house in an area, they’re more likely to reflect that it was a good decision because this makes them feel more secure about the decision they made (to avoid feeling any regret).

• Because of this as well, you don’t tend to hear about people’s real estate ‘failures’.

• Adjust your opinions about the market based off what you see - keeping track of sold home prices and our other tips in this guide.

Keeping a level head when the process can take months

• Play the long game, it’s a marathon not a sprint. See this as a process of waiting for the right house to come up and being lucky enough to get it. It’s a side project, not your whole life. There’s a maximum amount of effort you can put in before more effort doesn’t equal more results. Put in the effort where it counts but don’t spend more than is effective.

• Many people go hard on open homes doing 8+ a weekend – we were more selective as I knew I’m someone who’d get burned out looking at too many.

• If you get worn down, just take a break – even one weekend off from thinking about homes/going to open homes. It can feel like you might miss out, but often not that much happens in one week. Don’t make any hurried decisions just because you’re worn out and thinking “I just want this to be over with”. You do have to live with this house, and while you can sell, it has associated costs and stress with that whole process as well.

• You can restrict what times you look at houses if it’s taking over your life - e.g. avoid looking at new homes Mon-Thu and look at them all Friday night before you start your weekend of open homes.

• Remind yourself what else there is in your life – it’s easy to get caught up on “what if I don’t get this home”. What do you normally enjoy about your life? - family, friends, partner, hobbies, etc.

It feels unfair/hopeless

• The housing market can bring up lots of feelings of resentment – history of housing is inequitable, house prices have risen dramatically, and it can be depressing looking at how much the same house would have sold for in the past. This is important to acknowledge – it does feel unfair. As we discovered, there is no ‘deal’ where you could somehow get a house 'cheap'. There's little point dwelling on this when you're trying to buy, but you can always make political choices favouring housing affordability in the future if you care about this point.

What if prices shoot up?

• Some people will always tell you it’s a good time to buy - either interest rates are high and so it’s a buyer’s market, or interest rates are low and house prices are shooting up. No one knows what will happen.

• It is good to remember most of the time prices don’t shoot up so dramatically as they did during COVID. It has tended to go in less dramatic cycles up and down, with a gradual upward trend. It's good to remember that prices can go down or stagnate when everyone around is hyping it up.

Staying calm in an auction

• There are basic things which always help for calming down - long deep breaths, drinking cold water (preferably ice cold, you could even bring a thermos) or splashing cold water on your face in the bathroom. If you're feeling pressured in the negotiation room, ask to go out for a cup of water, toilet break or breath of air (I would imagine it would be unreasonable for them to refuse this).

• We tried spending as little possible time in the auction room as possible - the high energy music playing, the bidding and auctioneer talking, it all drums up your anxiety. We signed in, livestreamed the auction outside until it was our turn, then went in. If you have to wait in the room, you could bring noise cancelling headphones and try not to engage with the high atmosphere.

• In "Making an offer", there is a section about auctions and practical tips of how to navigate them.

Being assertive

• The process of negotiating throughout buying can be stressful, if you're someone who's normally quite people pleasing, and likes to be kind to others.

• As your house is likely to be the most important purchase of your life, more than any other time in your life, you deserve to put your needs first and foremost. Whatever importance the house has to the real estate agent, the vendor, or anyone in your personal life, is hardly anything compared to how much this house will affect you.

• This website (link) has some free assertiveness handouts. I particularly suggest Module 6: How to Say “No” Assertively. Particularly the ‘direct no’ and the ‘broken record no’ – especially situations like during an auction negotiation which can last a long time. They talk about the difference between being assertive - asserting your needs without being unnecessarily aggressive, but not passively giving in just to be nice.