How I sold my house - and bought my second home with my husband
Exciting news: I sold my house, and have bought a new house with my husband!
It comes as a huge relief as the housing market in New Zealand is currently tough - even more so for sellers. It is currently a buyers’ market, with new builds rapidly entering the market, creating plenty of supply; at the same time, home loan interest rates are high, with BNZ’s and ANZ lowest rate at 6.45% and Kiwibank’s lowest at 6.49% as of today (5th February 2023). With house prices consistently falling over the past few months, people are constantly worrying about whether or not it’s a good time to buy or to wait until house prices fall even further to avoid negative equity.
Even though it wasn’t the ideal time for us to sell and buy, it was time for us to move to a bigger home for the arrival of our new family member. It was a nerve-wracking experience at times, but we did it! Today I’ll be sharing my personal experience of buying and selling a home at the same time, for those who might be about to go through the process.
Making an offer on our new house
In December 2022, my husband and I went house-hunting for a new home for when our baby arrives in May 2023. We fell in love with a gorgeous 3 bedroom, 2.5 bathroom townhouse that was freehold, freestanding, and only 6 months old. It was also on Auckland’s North Shore, only 10 minutes drive from our current home - score!
We contacted the agent to make an offer, and together we signed the sale & purchase agreement. After negotiating with the vendor back and forth (via our agent) and coming to an agreement on the price, we decided on our conditions.
Our conditions, to be fulfilled within 10 working days, were:
A building inspection
The property’s LIM report
Securing finance
And to be fulfilled within 8 weeks:
Sale of the purchaser’s property (i.e. going unconditional upon selling my house!)
We also discussed how the deposit would be paid. Normally, buyers pay 10% on the day their purchase goes unconditional, and 10% was what I paid for the deposit on my first home. However, we were able to pay $30,000 on the unconditional date, the rest of the 10% of the purchase price 10 working days after, and the remainder upon settlement. If you need a little flexibility, this is a good option to ask about when signing your purchase & agreement!
Choosing our agent
At one of the open homes we attended, we met a real estate agent who we liked and thought would do a great job of selling my house. She was friendly, enthusiastic, professional, and persuasive in emphasizing the positives of a property while downplaying the negatives.
What do I mean by this? We met her at a house that looked completely different from the photos - everything was darker, older, and smaller; not what we had envisioned from looking at the Trade Me ad. She pointed out that it would be as easy as getting some paint to brighten up the place, as the walls were dark blue. The house also had a separate, downstairs studio with a kitchenette and bathroom, and there were no internal stairs to this studio - you had to leave your main upstairs dwelling, walk down the driveway a bit, then enter the studio. Although this would strike a lot of people as inconvenient, she quickly told us that it looks favourable to the bank as the self-contained studio can be used as a form of rental income.
My house had many positives, such as its amazing location, 2 double bedrooms, open floor plan, and bright, airy kitchen & bathroom - but it had a few negatives, like old carpet, old doors, and one unpainted, cream-coloured bedroom (we’d decided to stop painting when I got pregnant). It’s a 1960’s home which we’ve modernised in the last 6 years with fresh white paint on the interior, timeless grey paint on the exterior, new white blinds, modern grey blackout curtains, and new white kitchen cabinetry with sleek silver handles. However, parts of it still look old-fashioned, so we thought it would be helpful to have an agent who can remind people that these parts are only minor cosmetic issues. After all, the house is perfect structurally. In fact, we were lucky not to have suffered any damage at all from the 1-in-200-year flooding in Auckland that happened just over a week ago!
Selling my house
Our agent first came over for an appraisal, before we met up again to discuss the auction process and sign the agency agreement. Our agency agreement basically stated that the agency would represent me for 90 days, that I would have to pay for the marketing, and what the commission would be if the house sells. I chose a marketing package that included:
Online listings on Trade Me, Real Estate, and OneRoof
Obtaining legal documents such as title & lease documents, LIM report, and council files
A 1600 x 900cm signboard and 50 A4 brochures
Hiring a professional photographer for a day shoot and dusk shoot, plus aerial shots, a floorplan, and a video
Copywriting
Auction costs, such as the auctioneer and live stream
A few weeks later, the photographer came and we spent 1-2 hours moving things around and ensuring the photos and video were perfect. Yep, when you’re at the stage of taking photos, you can still have messy cupboards & drawers and move items around so that the area being photographed is neat and tidy. Not when it comes to open homes though!
The next weekend, our 3 weeks of open homes started. After each weekend, we would receive a campaign report with the number of viewers who came and their feedback, such as comments about the property, their level of interest and likelihood of bidding at the auction, and how they would price the property if they had to guess.
The feedback was quite discouraging as my house’s CV is $920,000, and given the current housing market with most houses selling below CV, I still expected my house to be worth at least $800,000 in people’s eyes. This was based on looking at both asking prices and recently sold prices of similar 2 bedroom properties in my suburb, which were all approximately $800,000.
Some of the feedback was downright ridiculous, with one buyer saying they’ll look for a 3 bedroom house for $700,000 instead. If you’re not familiar with the current housing market in Auckland, $700,000 is what you can expect to pay for either a small property such as a unit or apartment in the same location (North Shore, generally viewed as a great area to live and is close to CBD) or a small to medium property in a much further away area (such as Manurewa or Te Atatu South). To give you an idea, 2 bedroom apartments in Northcote, the suburb right next to us, are currently asking for $775,000.
Over the next 3 weeks, the feedback was up and down; there were a few potential interested buyers who moved on for various reasons. One of them liked my house and had the right budget, but the bank was willing to lend them more if they chose a new build. They’d gone on to look at new build terraced townhouses (my house is freestanding), even if it meant sharing walls with neighbours.
Luckily, we had one buyer who liked the house from the get go, but who never gave us any indication of their intentions or budget. According to my agents, she was a real estate agent herself buying on behalf of a couple. The three of them had come to see my house twice, speaking Chinese the entire time, and kept to themselves. Fair enough, I thought. Having viewed properties with my Chinese mother before, she also prefers to be very secretive. To her, the worst thing you can do is tell the agent everything - what you’re looking for, what your budget is, etc - or to get excited about a property while viewing it, as you might get taken advantage of!
So, on auction day, I only had this one buyer. I had hoped for more, obviously; even two would’ve created some competition. Knowing absolutely nothing about their budget also made me nervous and uncertain. But as it turned out, this one buyer was enough. After negotiating from a very low starting bid, we landed at just $5k below my reserve price, which I accepted because I’d already set my reserve price at $10k above the minimum I was willing to accept…
…And so my house was SOLD! *happy dance*
The house is sold… What happens next?
Because my house was now unconditional, the house my husband and I were buying was now unconditional, too!
The next day, my buyer paid their deposit to me, and we paid our deposit to our vendor. We also got our solicitor to confirm with our vendor’s solicitor that 1) we had fulfilled our last condition and were now unconditional 2) the deposit had been paid.
I emailed our mortgage broker, who confirmed the amount we will be able to borrow for the new house and asked for the relevant documents to be sent and completed, including proof of deposit (e.g. confirmation of my husband’s KiwiSaver withdrawal or a settlement statement from our solicitor) and a form from the bank to confirm that we will be owner-occupiers of the new property.
Over the next few weeks, we will:
Pay the commission to the agency that sold my house, which consists of a $500 administration fee + 4% of purchase price up to $300,000 + 2.5% of purchase price above $300,000. Based on my sale price, the commission I’ll pay works out to be effectively 3.12%. Commission fees are different for all agencies, so be sure to shop around.
Agree on settlement dates. Yes, these are already written in our sale & purchase agreements, but our new house has just been vacated. The tenants moved out early, meaning that we can re-negotiate and move in extra early, possibly from April to February - hooray!
Complete pre-settlement inspections for both properties - my buyers will inspect my house 3 days before settlement, and likewise we will inspect our new house 3 days before settlement there as well.
Pack, hire movers or a moving truck, and say hello to our beautiful new home!
The facts & numbers
Price I bought my house for: $678,500
My reserve price at auction: $800,000
Price I sold my house for: $795,000
Price we bought our new house for: $1,110,000
Our deposit: $30,000 upon unconditional date, $81,000 10 working days after
Amount spent on marketing my house: $4985
Commission paid on the sale of my house: $28,606.25 ($24,875 + GST)
Amount we spent on decorating for open homes instead of paying thousands for staging (new artwork, cushions, artificial plants, etc): $135
How we are funding it all: using the proceeds from the sale of my house, my husband’s KiwiSaver first home withdrawal, cash from our savings, and a new home loan (we scored an incredible 4.99% special interest rate through Tella!)
I hope this has been helpful if you are thinking of buying a house, selling a house, or like us, doing both some time soon!
During the process, I found the following resources to be very helpful: Settled, OneRoof, and REA (Real Estate Authority) guides.
Best of luck!
Sophia
