How do I know what to offer for a house
RNZ's money correspondent answers your questions about buying a house.
Photo:
RNZ
We're trying to buy a first home and lots of places we look at are "price by negotiation" or deadline sales. How do we know what to offer?
I think there are a few things you can do to help give you a guide to what sort of offer might be appropriate.
It can help to look at other recent sales in the area, and work out how they compare. You can find these on sites like Homes.co.nz - if you see a place that looks a similar size and condition and in the same sort of area, it might give you a guide as to what might be reasonable.
This is where going to a few open homes before you start looking seriously can really help, because you'll get a sense of what represents good value.
Sometimes you see data going around about a certain suburb selling at a percentage above or below CV - this can give you a general guide but won't account for the specific features of the particular house you're looking at.
But Steve Goodey, who does a lot of this in his work as a property investor and investment coach said those sorts of data sites would not help for some of the factors that can make all the difference when you're buying a house to live in.
He said while an offer for a rental property was usually about making the numbers work, when it was an owner-occupied deal other facts were more important, like the vendor's motivation, how badly the buyer wanted a particular property, how soon they needed a house and how "special" a place was.
The price that a vendor might be willing to accept will also be influenced to a degree by their circumstances - someone who is just testing the market to see if they can sell will be less likely to take a lower offer than someone who needs to move.
If someone bought recently, they might also have less room to accept a lower price than someone who bought a long time ago.
Real estate salespeople should give you a guide as to what sort of price range the property might be in, but remember they are acting for the vendor.
You'll need to do your own research and offer a price that feels right for you. It's then up to the salesperson to present that offer to the vendor, and you can negotiate from there if it's appropriate.
I'm thinking about buying an investment property but how does it work to use the equity from my existing house?
It's quite common for property investors to get started by using the equity in their own homes. It works like this.
If you bought your house a while ago, and you've paid down your home loan, you might have built up extra equity in your property.
Say for example you bought your house 10 years ago for $500,000 and it's now worth $1 million.
If you had a home loan initially for $400,000, and you've paid off a bit of the loan over time, so you now owe $350,000, you've gone from having $100,000 equity to having $650,000.
The bank may let you increase your loan to $800,000, giving you $450,000 that can be used to purchase an investment property.
You can use that equity as a deposit and then get a loan for up to 70 percent of the investment property's value to complete the deal.
Sign up for Ngā Pitopito Kōrero
,
a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
RNZ News
23 minutes ago
- RNZ News
KiwiSaver providers hope public support for contribution increases will see default rates move higher
Financial Services Council chief executive Kirk Hope. Photo: RNZ/ Dan Cook KiwiSaver providers are hoping public support for increased contribution rates could provide the incentive to push them still higher. The latest RNZ-Reid Research poll included questions about the changes to the KiwiSaver scheme announced in the Budget. From 1 April next year, the default contribution rate for employers and employees will rise to 3.5 percent. The following April, it will be 4 percent. But the government will halve the credit it offers to people who contribute at least $1042 a year to their KiwiSaver, to a maximum $260.72. It will not be available to people earning more than $180,000. The poll showed a total of 61.2 percent of respondents supported the contribution change, 21.4 percent opposed it and 17.4 percent were not sure. Among National voters, almost 80 percent supported the change. But only 23.7 percent of total voters supported the move to halve the contribution rate, and fewer than half of National supporters. Fisher Funds chief investment officer Ashley Gardyne said he was not surprised by the findings. He said we should not stop at 4 percent plus 4 percent, and should push towards higher contribution rates. "I think it's really positive we've seen the contribution rates increase, and ultimately if we want people to get to the right amount of savings in retirement those rates do need to move up through time." He said the Australian model, where contribution rates slowly lifted over a number of years, could be one to follow. "They took a really long-term, 10-year approach of increasing contributions by a little bit every year. The reality is it's tough to find extra money in your pay cheque to put into KiwiSaver but it is really important long-term as well to make sure you end up in the right position for retirement. "Having a long-term vision like that is really important." Read more: Australia soon to be second in world for retirement savings as superannuation pool soars Kirk Hope, chief executive of the Financial Services Council, which represents KiwiSaver providers, agreed the results were expected. "We've known for some time that in terms of contributions those will be relatively well received. Obviously it's a bit tougher if the government contribution is being halved or in some cases removed that's not going to be particularly popular, the key thing is the government continues to contribute something." He said there should be a bipartisan agreement about a long-term strategy for retirement income. He said it was also worth discussing other steps the government could take, such as adjusting the tax settings. "Other changes the government might be able to make to the tax system in the future to continue to incentivise particularly savings and even up the playing field between savings and investment and housing. That's some fundamental shifts in the tax system." Ana-Marie Lockyer, chief executive at Pie Funds, said it was good to see that most people supported the contribution increase. "In terms of the halving of the government contributions we need to acknowledge the government faced some hard choices as a result of the tight fiscal environment. But I believe we should be offering more incentives for Kiwis to save for their retirement, not fewer. "Reducing the government contribution is more likely to impact the retirement balances of lower income earners - a group who deserve the same opportunities as everyone else." She said even a reduced contribution of $261 a year could grow to more than $40,000 over a person's working life. "I think what's more important than the dollar amount of the government contribution is the number of Kiwis who don't receive it, either because they're not eligible or they're not contributing enough. "While it's a good thing that the government contributions are now available for 16- and 17-year-olds, I think the government missed a trick by not extending it to the increasing number of over-65s who are still working, whether by choice or necessity. "What's probably more concerning is the thousands of KiwiSavers missing out on the MTC government contribution each year because they're not contributing enough to qualify, leaving millions of dollars on the table. "So the poll is actually a timely reminder for people to ensure they've contributed at least $1043 by 30 June in order to receive the full government contribution of $521 - before it reduces to $261 next year." Finance Minister Nicola Willis says the changes will help Kiwis save more. Photo: RNZ / Mark Papalii A spokesperson for Finance Minister Nicola Willis said the changes to KiwiSaver were designed to help Kiwis to save more and make the scheme more fiscally sustainable. "For example, an 18-year-old earning the minimum wage of just under $49,000 a year who invests in a balanced fund can expect to have almost $910,000 in KiwiSaver at age 65. Under the old settings it would have been about $732,000. "The results are similar for most other people. The Retirement Commissioner estimates the changes will increase retirement savings for about 80 percent of KiwiSaver members." Sign up for Ngā Pitopito Kōrero , a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
RNZ News
an hour ago
- RNZ News
Science sector sounds alarm over funding shake-up
Photo: 123RF New Zealand's science sector, once hailed for its agility and ingenuity during the pandemic and natural disasters, is now grappling with what researchers say is a crisis of confidence, fuelled by shrinking budgets , unstable funding pathways and policy decisions that increasingly favour commercial returns over long-term public good. Last month, a total of $212 million was cut from the science sector in this Budget, which reprioritises existing research funding towards commercially focused science and innovation. A sizeable portion goes to Invest NZ and a new gene tech regulator. The government says it backs the sector and is prioritising industry partnerships, private-sector investment, and "innovation outcomes with measurable economic impact". While officials insist the move reflects "fiscal discipline and real-world alignment", many in the sector say it amounts to a dismantling of the research base. Newsroom political journalist Fox Meyer tells The Detail that "the scale of the cuts is not great for the sector, but it's also more about the lack of investment". "It's one thing to have cuts and reprioritisation, but people have been calling for more of just anything for some time now. Now, there is a lot of frustration. "Science funding has been stagnant or declining for years now, and a decision to reprioritise stuff is not necessarily going to put money in the government's pocket like they think." With a focus on the bottom line, is this the government pulling off a Sir John Key "show me the money" moment, with a scientific bent? "That actually goes both ways," says Meyer. "Scientists are looking at the government saying, 'show me the money if you want me to produce more money', and the government is looking back at the scientists and saying, 'well, you show me the money, what are you bringing in, how are you lifting your weight?'. "That is going to be a hard one to reconcile unless the government is willing to pony up and make the investment." He worries the fall-out will include a "brain drain" with our country's brightest and best scientists and researchers opting to take up positions overseas. "My connections in the science world - plenty of them - have moved. "The chief science advisor for the Department of Conservation has moved to Australia ... that's an expert in a cutting-edge field that we have lost to a company in Australia. "And it's not the only example of this sort of thing. We invest so much in training up these scientists, and they are very skilled scientists, and then to not give them what they are asking for and what they need, I feel it falls short of our own investment." In fairness, it is not all doom and gloom. "So, the positives, there is a new funding pool for Māori-related science, that's a good thing. There's the sector-wide report that has come out, which has given us a good look at the sector. We know more now, that's a good thing. And the chief science advisor has been appointed , and the panel around him has been appointed, that's a good thing there." Meyer says the sector is crucial to all parts of New Zealand. "The science sector is about answering questions. If you have questions, science is a method, and it is used to answer a lot of those questions ... the more money that we put into this sector, the more questions we can answer. And the more questions we can answer, the more answers we can sell. "If the government is worried about economic growth, and they want to champion this sector, then you've got to put your money where your mouth is. "I am going to be curious to see how they can steer the ship of science, when maybe what they are most suited for is selling the fruits of science." Check out how to listen to and fol low The Detail here . You can also stay up-to-date by liking us on Facebook or following us on Twitter .
RNZ News
9 hours ago
- RNZ News
Wide Reserve Bank restructure to follow executive and funding changes
The Reserve Bank has already been restructuring its executive team, with a number of its higher ups departing, and the latest news of a wider restructure comes after a major funding cut. Photo: RNZ / Samuel Rillstone A broad restructuring is on the cards at the Reserve Bank, less than two months after the government announced it would cut its budget . RBNZ said it would consult with staff about potential "broader organisational changes" later this month, but refused to provide additional details. RNZ understands certain backroom functions were being reviewed, as the central bank faced a 25 percent cut to its budget in the new financial year. It comes amid a restructure of its executive leadership team, with the departure of another assistant governor. It said Sarah Owen had left the RBNZ, following the earlier departures of Kate Kolich, Greg Smith, Nigel Prince and Simone Robbers. In May, the RBNZ said it would halve its executive leadership (excluding the governor) to four. After slimming down the executive, it said the leadership team below the executive also faced changes. The new leadership structure would come into place from 16 June, and would be made up of 20 director roles under four groups - financial stability, money, enterprise services and operations. "This is a critical time for Te Pūtea Matua (RBNZ), and the changes we're making are more than just structural," governor Christian Hawkesby said. "We want to ensure that we're match-fit for the changing environment and context we're operating in," he said. However, the RBNZ was tight-lipped about the broader organisational restructure. "We will soon be going into consultation with our staff as part of this next phase," a spokesperson said. "Out of care for our people, we have no further details to share externally at this time." The RBNZ has faced a period of uncertainty in recent months, with the reduction in government funding arriving after the abrupt departure of former governor Adrian Orr. It has previously faced criticism over a sharp increase in staff numbers, with the number of full-time equivalent employees increasing from 255 in 2018 to 641 in September 2024. Sign up for Ngā Pitopito Kōrero, a daily newsletter curated by our editors and delivered straight to your inbox every weekday.
