Fact finding mission

FACT FINDING MISSION – A pre-purchase check list

Completing a successful property purchase relies on doing your homework.

Arriving at this point need not be costly and confusing. Background data is available from real estate agents, while much of the follow up you would expect to pay a lawyer for, you can do yourself.

On-site handouts provide a fair portion of this information. Along with viewing details, flyers give agent’s contact particulars, information on type of sale i.e. auction, negotiation or tender. They give physical address details, a brief property description, legal description (lot number and DP - deposit plan number), type of title – fee simple or freehold (most common residential title/no co-ownership or other relationship issues) or limited as to parcels, also freehold (but an old less exact form of property measurement), cross lease (common title in city areas, where more than one dwelling is on a single freehold title) unit title (usually for apartment blocks with a body corporate) or leasehold (where you own the building, not the land).

A rent appraisal may be available, helpful if you are looking for an investment, though often this is higher than the current rental, possibly to support a higher asking price. Satisfy yourself by comparing rental ads for properties of similar size and location.

There may also be a LIM report (Land Information Memorandum – provides information about the property held on local council records e.g. building work/consents and permits, proposed public works, previous requisitions, zoning and limitations as per the District Plan, drainage, flooding and wind ratings).

A good agent will also have a property information sheet giving current CV (Capital value) – Council assessment of probable sale price excluding chattels based on comparable properties in the area), rates and body corporate charges if applicable.

Members of the Real Estate Institute, have access to a printout of recent comparable sale statistics for the area, an invaluable tool, giving date listed, date sold, CV and sale prices. Ask for a copy if this is not on hand.

Where information is lacking there are steps you can follow to complete the picture. The Real Estate official website www.realenz.co.nz. allows property searches according to location, style, min/max price ranges, numbers of bathrooms and bedrooms, floor area and land use, as well as offering general advice and useful links.

One of these is Quotable Value New Zealand. Click here or log on to www.quotable.co.nz to access: - ‘e-valuer reports’ - $29.95 give current market value estimate for residential properties with a value range based on comparable sales within the area; ‘adjacent sales reports’ - $14.95 for sales over a given period and/or price range for surrounding properties, including individual sale dates, prices and CV’s; ‘rating valuations’ or CV’s - $2.95; ‘sales history’ - $3.95 provides a record of previous buyers and sellers, plus agreement and settlement dates and gross price at sale time; ‘demographic profiles/national and neighbourhood’ - free for national reports and $4.95 for neighbourhood reports; ‘property history’ - $5.35 lists re-valuations etc; ‘Certificate of Title details’ - $4.95 gives CT (Certificate of Title) and legal information.

Local council sites offer answers too.

For example the Auckland City website, www.akcity.govt.nz/council/property provides an online facility to check property details. Insert address details to bring up property and rates information - an Auckland city assessment number, certificate of title number, land area and legal description, plus current annual rates, valuation number and land value, value of improvements, description of improvements adding up to the capital value.
Check here on zoning implications too. Zone numbers appear on the LIM report or site file and are linked to the type of activities you can carry out in a particular area. Each zone has a list of what is allowed from special character zoning that regulates building character to preserve its heritage or character to high-density development zones.
Site files of most properties, apart from some very old ones, are held at the local council. In Auckland City the fee is $12 to view a file, with a small charge for photocopies. Files are kept on microfilm and/or computer or in physical folders. Those on microfilm file can be viewed on slide equipment available. For site files on computer, staff will log you on and bring up the relevant folder/sub folders. In each case items have an identity number, so note the ones you want copied.

If you need to get hold of a LIM report, you’ll find an application form online on some council sites. This must be posted or delivered to the council (except for account holders who can lodge online) or it can be ordered by phone or in person at the council office. You need to provide a current copy of the CT and for cross-leased properties, a copy of the flat’s plan, indicating the actual unit. You also need to provide the name of the current owner and payment. Legislation requires all LIM reports to be available within 10 working days.

Costs vary depending on individual councils. For example Auckland urgent, within 4 working hours, costs $270 and non-urgent, 6 to 8 working days, costs $210. In Wellington, residential cost $340 and commercial $600, plus an additional $56 per hour for each hour over 13 hours). In Christchurch it’s $150 for residential or commercial properties.

If a remark or something in the press alerts you to possible public plans proposed for the area, make an appointment with a town planner to check it out.

One other thing to look out for is an encumbrance, covenant or caveat noted on the title for a variety of reasons, including requisition for road widening, drainage easements or fencing restrictions, all best checked out by your lawyer.

Finally, while your lawyer is always a point of reference for resolution of legal issues, a couple of other possible expenses include an independent valuation by a registered valuer for mortgage purposes or to satisfy yourself about the price you want to pay (approx. $225 to $300) or a building inspection to appraise soundness of building structure (around $250).

©2004 Linda Donald
All rights reserved
Appeared in The New Zealand Property Magazine
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