As an owner you have to find an agent that best suits you and your needs when selling your apartment.
Finding an agent and building a relationship and setting expectations that both parties are happy with is the first and most important aspect of selling your apartment.
Once you have found an agency the rest is fairly simple. You will need to sign a listing agreement and as this is a legally binding document we suggest you get a lawyer to look over this for you. The difference with Apartment Specialists is that we don’t lock you in. You are in control.
The agent will advise you with all the details of the campaign, marketing, the current market and so on.
The final step is making sure you are kept up to date – setting these expectations and how much involvement you would like is up to you and we tailor these to suit you as an individual.
How banks lend money to apartment owners is very different to how they lend to housing owners. For example a bank will lend to a new home buyer currently at 80% of the home’s value.But with apartments, it’s not so simple. Banks will only lend 80% if the apartment is of a specific size. If it is lower than that size, the bank will only lend 50% of the apartment’s value.
But what makes it even more complicated is that each bank has different criteria. Here’s the 80% threshold ‘For the Major 5’ (size is not allowed to include the deck area):
Westpac – 50m2
BNZ – 50m2 (was 40m2)
ASB – 40m2
Kiwi Bank – 50m2
ANZ – 45m2 for a one bedroom, 55m2 for a two bedroom
Now this criteria is ever changing; and rather than going from bank to bank, I would recommend going to a mortgage broker that specialises in apartments because as you delve deeper there is a bit more to it. A broker will know all of it as well as the latest changes, and match you with the best bank for your needs.
I.e. some banks lend less to apartments that are in buildings that were used for something else previously (conversions); or some banks, if they have mortgages with over 20% of the owners in a building, won’t lend on any more.
What does each bank lend on apartments? Andrew Murray, Apartment Specialists, talking about all the different banks and how they lend on apartments is different to houses. Well, first of all, when you’re looking to buy your first home a bank will lend up to 80% on the value of that home. So you can have a mortgage which represents 80% of the value of that home.
Now when it comes to apartments, yes that’s the same, but only to a certain size. And where it gets complicated is that each major bank in New Zealand has different criteria, which is ever changing. So, for example, BNZ was 40 square metres, so if you found an apartment that was 40 square metres, they would lend 80% of that value as a mortgage.
Well, they just recently put it up to 50 square metres. So that means now you can’t get 80% for your loan. So what does that mean if you’re below these sizes for the banks. So that means, these sizes are the numbers I’ve been mentioning, if they are the size or above that means you can get an 80% mortgage. Now if it’s below, that means they’ll only give you 50%.
So I’m just going to run through the major banks here and if you forget what I’ve said – because I know I do talk fast from time to time – there’s a table down below or underneath this podcast with the actual criteria. So for example if you’re looking at Westpac, you can get an 80% mortgage on 50 metres squared or larger. These sizes do not include decks or outdoor courtyard areas. It’s only internal area. So Westpac is 50 square metres, BNZ is 50 metres squared again and that’s the one I mentioned.
It was 40 metres squared and it’s now changed. ASB is 40 metres squared so that’s the lowest. Then you’ve got Kiwibank which is 50 metres squared. Then you’ve got ANZ which does it slightly differently, which is 45 metres squared for a 1 bedroom and 55 metres squared for a 2 bedroom.
Now as I mentioned, this criteria is ever changing. The best way to actually get on top of it is not to go directly to a bank, because that particular bank will tell you that’s how it is when every bank is different. It’s actually better to go to a mortgage broker who specializes in apartments and they keep up with this criteria every minute of the day because that’s what they do.
They’ll match you with the bank that best suits what you’re trying to do. So what bank is best for you. Now, I hope that helps. It does get a little bit more complicated than that and the mortgage broker will explain that to you. For example, some banks will not lend to certain buildings because they’re exposed too much.
Many people in that building or they might have some buildings they just don’t like for sometimes no reason at all, but a mortgage broker would help you there. But that’s a good overall and I hope that’s helped.
If you have any questions, flick me an email at email@example.com or call +6421 424 892 and I’ll be happy to help you with your queries.
The plan consists of both desired changes or improvements that the powers would like and then a list of maintenance that has to be done and when, for example paint the roof, wash the building, repairs lift and on on. These are all time lined and at the AGM will be discussed if and when these changes are going to happen.
This eliminates the element of surprise costs for the building and informs the owners and new purchasers what is coming up in the future. You will also be aware of any expenditures that may be coming up that the Body Corporate won’t be able to fully covers so allows you to prepare for these extra future costs.
Making yourself aware of the long term maintenance plan as it is an important document to know about before purchasing and a lawyer can assist you with this if needed. Or alternatively Apartment Specialists can guide you through one too.
Good day, Andrew Murray here from Apartment Specialists, talking about long-term maintenance plans. What are they? Are they important?
When you buy an apartment, a long-term maintenance plan is something that basically all the owners agree to on how the building is going to be maintained in the future. A good way of looking at it is, if you own a house. So, you and your husband or you and your partner own a house. In ten years time you know that you have got to repaint the roof, or in 20 years times you’re going to have to repaint the whole house.
You are obviously going to have to do the lawns. You are going to have to do the rubbish or you might want to do some altercations like improving the deck. You may want to put a pool in and put some heater. All these kind of things, owners come up with. On one side, a long-term maintenance plan is like a wish list. It is what they want to improve in their building, and things that they need to do to maintain their building.
For example, once a year a building generally needs a building wash. Then in a couple of years, depending on the type of cladding, the owner may want to paint the building. In 20 years time the roof needs to be redone, or in 30 years time the lift needs to be reconditioned. All these things are put into a long-term maintenance plan. The reason for this is brought in in the 2010 Unit and Titles Act which was enacted in May. This act will make sure that the long-term maintenance plan is in place.
Owners do not get a surprise, “Oh, you need a new lift.” All of the sudden, you have to have a special levy. That means the body corporate fee. Part of it is putting aside, and would cost generally around about 10% of it is putting aside the money towards what’s called a contingency fund. This is what used to be called a sinking fund, which is where all that money sits for the long-term maintenance plan.
I am just going to run through a pretty basic one. Just to give you an idea of what it is. As you can see it goes over what I was just mentioning before. The purpose of a long maintenance plan is to – that is what when you see LTMP, long-term maintenance plan – identify future maintenance requirements and estimate the costs involved; support the establishment and management of a long-term managements fund; provide a basis for the levying of owners of principal units; provide ongoing guidance for the body corporate to assist in making its annual maintenance decisions.
So the long-term maintenance plan will cover all of this, or cover the cost, or talk about what year things are going to be done – all that kind of thing. And this is something you want to look every time you want to purchase a building, or if you own a building, or you want to be updated this year, because it is very important.
Let’s go to page nine, what basically is the nitty-gitty of it, which is long-term maintenance plan for units in this complex.
Basically here you can see you have got different categories. Every building will have different categories. You’ve got your service lobby – so that’s our entrance level of this apartment complex. It’s got 115 apartments in it. The floor in 2016 will be retiled, or something like that. It’ll be painted, as well as the entrance walls. The rubbish room, they’re going to put tiles in the bottom – at the moment it’s just concrete – so that’s to improve it. They’re going to paint all the walls, they’re going to do tiles in 2022, 2016, refurbishment. What is the cost? The walls – you’ve got your cladding and building wash. So that means every year there’s an annual wash of the cladding, so that means somebody comes down– it’s quite a tall building, so you’re going to have people down on carabiners washing the whole place.
Then Level One and Two. The first couple of floors before it turns into aluminium composite cladding. It is actually concrete, so that needs to be painted and not cladded. Things like that. You know, the car park. It is pretty self-explanatory but it gives you an idea of what are the big ticket items. For example, the annual wash each year actually costs 18-grand. Obviously that goes into the budget. It is not really a long-term thing, but is included in that.
What is another big one? Your car park. Painting the whole car park is 9,000. Things like that.
As we go a bit further, it talks about the expenditure. When is this expenditure happening? And how much is going to be needed to be raised? So in each year, 2015, which is this year, you need $32,000 to meet everything that’s got to be done – 2016, 43. Ifyou are an owner, you are looking at a big year. You are going, “Okay, 19, 29, 25, 47. That’s quite big.” So you’re expecting maybe a high levy. Or basically what you are doing is repairing the body corporate fee to cover that whole period. That’s it in a nutshell.
It is really, really important, because you may have a period where, say 2017-2018, there are some big ticket items. You know in your budget, or in your contingency fund, or long-term maintenance fund, and there’s not enough money to cover it. So you know there is going to have to be a special levy there. So you can prepare for that.
This is a really important document that most owners or most purchasers – when they go to purchase – are just completely unaware of or don’t even look through. Or even lawyers don’t even look through. A really important podcast, this one. So make sure you are aware of the long-term maintenance plan of the apartment and the precinct.
Now, if you want to go through one with me individually, just flick me an email: firstname.lastname@example.org, or give me a call on 021424892. I can help you out.