“The new Victoria Residences building, now going up on the corner of Federal and Victoria Streets in Auckland, will be a 25-level tower, but a render of the project shows it soaring about squat buildings that, in reality, include the 17-storey Telco tower.”
Take a look at this picture I drew up – the artist impression building picture and the reality.
The Dangers are obvious. If you buy off plan – go and look at the actual site. As I explained to Stuff
“When walking up Victoria Street, I saw a picture of a project being sold off the plans and I was like, “Hang on, this is just wrong! The images of the buildings in front are made to look much smaller than they really are.
“Imagine buying an apartment off images of a view and then finding out that there was a building right in front the whole time!”
How to avoid getting duped by artists impressions
Here is my advice to everyone who considers buying apartments in Auckland off plan.
Go and Look at the Site Yourself.
Get onto Google Maps and look at the streetview – both sides of the street. Look at adjacent streets and see where the tall buildings are.
For highrise buildings, also look at Google Earth and click the sun icon to show shadows (here’s how to use Google Earth). This will show you how tall adjacent buildings are.
Also understand my points below about furniture and swimming pools. Don’t get caught out – be the informed buyer.
“I also have a problem with the way some developments show perspectives of amenities, such as swimming pools. I know of one development’s lap pool that really can be used by only one person at a time, which is scarcely adequate for a building that will house 1000 people. Yet, the perspectives make it look much larger and show lots of people enjoying the facility.
“The same applies to perspectives showing furniture in a room that can make it look much larger than it is. My advice is to NEVER rely on digital imagery.
Make sure you visit the site; or at least get on Google Maps and see what’s around it. For interiors, get the actual dimensions. Measure that out in your own living room.”
There are commonly 3 taxes which can be charged when property is bought or sold.
Goods & Services Tax (GST)
Capital Gains Tax (CGT)
There is no Stamp Duty in NZ (but it is charged in Australia).
CGT only applies if you bought after November 2015 and sell within 2 years.
GST applies when an apartment is on a commercial lease.
When selling your apartment, it is important to know what taxes you may or may not have to pay as this effects the outcome.
There are three main taxes involved when selling your property/apartment in Australasia but not all or any will apply to you necessarily.
New Zealand is a great place for property as the taxes charged are lower than any other first world country.
There is no Stamp Duty which is a tax charged on purchasing a property in Australia or the UK.
Capital Gains Tax only applies to you if you bought after November 2015 and sell within 2 years.
However, the one tax to look out for which many owners forget or are unaware of is GST.
Goods & Services Tax or more commonly known as GST applies to you if the apartment is bought with the intention to be used for what is called a taxable supply.
I.e. for a commercial capacity.
For example, a guaranteed rental, commercial lease or an apartment in a hotel lease.
The important thing here is if your apartment was intended to be used as a taxable supply make sure you talk to your accountant, as there is a good chance that when your sell your apartment a 15% tax will be applied or passed onto the next purchaser both effectively reducing what you are left with.
As an owner, you might be wondering what YOU need to do, or help with, in the process of selling your apartment. After you choose the agent that you feel will best represent you and get a good price for your apartment in the time frame you need, what else needs to be done on your part?
Surprisingly little. We do the leg work for you. From the time you sign the listing agreement to the time your apartment goes on the market and we start getting offers, we are there for every single step of the process. And, we’ll keep you up to date on each step, too.
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.
When selling your apartment, did you know there are more than just commission costs? We know, at Apartment Specialists, that, at the end of the day, you want to know how much you’ll be getting in your back pocket when your apartment has sold. You might be surprised to know that you may even get money back. We’ll help you to get a broader picture of what these other expenses are, understand ALL the costs when selling your apartment, so you can take them into account.
The knowledge of what costs you will incur during the process of selling is so important and it is more than just the agent’s commission.
The costs involved are more than just the commission. There are several others involved but don’t let that deter your choice to sell.
Marketing costs generally are around $600 when a property is selling for under a million and around $2300 for property over and above that price.
Lawyer’s fees can range from anywhere between $800 and $1000 for a property with no mortgage and up towards $1300 for a property with a mortgage. Where there is a sale that is more complicated for example a building that may need more due diligence due to building issues these lawyers’ fees may be upwards to $2000.
Lastly, a cost that is overseen when your property is tenanted during the decision of sale being made, your tenants may leave before settlement date leaving you with no income for several weeks. This is where you need to ensure you are prepared for this and/or bring the settlement date forward if able to.
And the good news; you may sometimes be eligible for money back. If you have covered your Body Corporate fees for the year and sell part way through the year you will receive the overpaid amount back upon settlement. Rates are the same deal and will be reimbursed if any are overpaid.
What happens with you sign a sole agency agreement with an agency? Here are 3 examples from owners that we worked with who wanted to sell their apartment. Unfortunately the agencies with whom they signed just didn’t deliver at all or in a timely manner and this is due to the sole agency agreement in their contract.
Signing and selling my apartment with a sole agency agreement and what that means for me. This is important to understand as a Sole Agency agreement is legally binding. At Apartment Specialists we don’t lock you in.
It is important to understand and know your rights as an owner when selling your apartment and what it means when signing a Sole Agency Agreement.
This is because it is a legally binding document and sometimes owners don’t realise this and what implications this may have.
The most common clause in an agreement is signing with an agency and being locked into 90 days with the agency. This means if you are not happy or you feel the agent is not working for you, you can’t change until that time period is up.
We trust in that if the service is good why would you want to leave.
The choice should be yours.
In any other industry this would not be accepted, so why real estate?
How much commission is charged when selling an apartment in Auckland? You should know what you are going to be left with after all the costs.
You also should know what’s most important to you, as an owner, to look for in an agent. We’ll bet it’s that they’ll maximise the amount of money you’ll be putting in your pocket. Just because the commission costs are higher it doesn’t mean you’ll be getting less when your apartment sells!
Get insight on what real estate agents in Auckland charge for commission and why, sometimes, it’s better to pay a little more commission to get a lot more value.
The commission charged when selling your apartment vary depending on your apartments value. You are charged 4% for a value up to $500,00, 2% for a value up to $1,000,000 and 1% upwards from $1,000,000 plus GST.
It is not always about the sales price you can achieve but rather you want to know how much you are going to be charged in commission and what you are going to left with after the sale has gone through.
Usually you will be charged around 4% for a property with a value up to 500,000. 2% for a property up to a $1,000,000 and 1% for properties sold for more than $1,000,000. This is plus GST unless you living outside of New Zealand and can prove your residency, then you won’t be charged GST.
There is however a minimum cost you will be charged and this applies to properties worth 3,000,000 and under.
These can vary across agencies and Apartment Specialists we charge $11,500 plus GST
When you sell a property below 300,000 there is a minimum fee, at Apartment Specialists ours is 11,000 plus GST (This is subject to change without notice).
However, it is more than just what your commission costs are going to be – you want to ensure the agent you have chosen is going to get the best possible deal for you. Asking your agent for their recent sales and what records prices they have achieved is a good idea to inform you with what price you may get.
We have an advantage in the apartment industry to help you realise your apartments worth as there are so many like for likes, for example the same apartment that has been sold in the building with the same specs and so on.
How is the value of your apartment calculated? Oftentimes real estate agents will look at the sales statistics for the apartments in your building and base the current value of your apartment off these previous numbers. But how can sales in your building alone be an accurate gauge on price?
The value of your apartment is usually calculated by a number of factors including recent sale prices, sales in the buildings and the most important like for like buildings in similar areas.
Firstly, we look at apartments that are the same, these are usually in the same building. Most agents stop there; we go further and look at other buildings that are similar to help us gauge the real market value of your property.
This is where our expertise are superior, we have the knowledge of all the buildings in Auckland and understand our market well.
Calculating size, carparks, level and so on are all important factors to consider when valuing a property as well as record prices in the building and recent sales in both your building and other that are alike.
We can market your apartment without even entering the building as we have floor plans of all buildings in Auckland and know these buildings inside and out.
What is the difference being a specialist for you, an apartment owner looking to sell? With thousands of apartments in the Auckland CBD and surrounding suburbs and at least 100-150 apartments selling every month, you need the right information so you can make the best decisions for you.
Apartment specialists looks at the value of apartments, not just in your building, but of those in the surrounding buildings as well. The apartment market moves all the time and we make sure we’re aware of it when valuing your apartment.
In this video you’ll see a real estate agent missed out on $61,000 because there were sales occurring at the time that didn’t show up on the sales statistics.
My apartment worth is found out by speaking to a specialist. At Apartment Specialists we know our market well and can give you a well-informed, educated and up to date value on your property.
There are over 26,500 apartments in the Auckland CBD and fringes and around 395 buildings which will become up to 450 in the coming years. Each month there are 100 to 150 sales of apartments.
We know this by understanding our market well. This is done by constantly keeping up to date and being in the know. It is not just about being an agent but about being a specialist in the market.
We look at apartments that are the same, these are usually in the same building and look at other buildings that are similar to help us gauge the real market value of your property. Calculating size, carparks, level and so on are all important factors to consider when valuing a property as well as record prices in the building and recent sales in both your building and other that are alike.
By being well informed, we can help you make the best decision that works for you and selling your property.
If you’re looking to sell your apartment in Auckland, although there’s no real ‘right’ time there is definitely a period you want to avoid which. If you sell during this time, it can cost you anywhere from $20,000-$50,000.
In this quick video, Andrew Murray at Apartment Specialists tells us exactly when to avoid a campaign to sell your apartment and why! Listen in to find out when the sweet spot is to get your apartment on the market. Apartment Specialists knows… that’s why we’re the specialists.
Apartments are different to houses and can be sold most times of the year, we recommend the only time you avoid is December through to early January.
Selling at the wrong time can end up costing you more than you may have anticipated. However, apartments are very different to houses and most of the year is a good time.
However, the only time to avoid would be the December, early January period – the holiday period, this is due to a lot of events happening in people’s lives, end of deadlines, holidays, family commitments and so on.
In this podcast, Andrew Murray talks about the importance of Pre-Settlement Inspections and its main purpose in apartment sales. He will also explain the things that a buyer should inspect in a particular apartment before closing the deal. Get all the essential details on this video.
Andrew Murray here from The Apartment Specialists talking about: Apartment Sales and Pre-Settlement Inspections.
Pre-Settlement inspections are very important and they aren’t done properly in the industry in my opinion. What we do is work with every buyer and explain to them the purpose of what a pre-settlement inspection is for.
First of all, it’s virtually to check that there’s no damage that occurred in the apartment since you entered the contract since you last viewed it. If there’s any damage that’s happened since then, the owner or the current owner has to fix that.
For example, if you had known there was an occupier and they were moving furniture out and damaged a wall or ripped up a carpet – that needs to be fixed.
Secondly, if there were tenants in the apartment and they need to be vacated – when they did vacate – there was no damage incurred.
Secondly, it’s to go in the chattels and fixtures. The difference between a chattel is: you can move it around you can take it out of the property. A fixture is something that is attached to the property. You want to be able to go in there and check that everything is in there that you paid for. That is: when you purchase a property you would have been given a chattels list and you want to go in and tick off all those things and make sure they were as when you inspected the apartment.
Thirdly, often there has to be work done. For example: when they sell the apartment the agent in our case we may say. “Look the owner said that they will make sure that the oven is fixed or they’ll make sure that the hole in the wall is fixed”. And that’s for you to inspect the unit and make sure that’s done before settlement.
What a lot of buyers aren’t aware is that you’re only allowed one pre-settlement inspection. That means you’re only allowed to go into the property to inspect it before you settle once. Now, that’s legally and twice or more if work has to be done. That is: you inspect the unit and then you find that work has to be done so you need to inspect it after that work is done.
Where it gets interesting is, if a purchaser doesn’t get organised and doesn’t do their pre-settlement inspection early enough – they can actually be refused. For example, the vendor has the right to refuse a pre-settlement inspection on the day of settlement. That’s why we always make sure that our purchasers are able to go through and do their pre-settlement inspection a few days before. That gives time for them to notify their solicitor if there’s anything wrong, or if anything needs to be remedied or sorted out.
Another issue that comes up is tenants. Tenants by law have to be given 48 hours notice before you can inspect the apartment. If it isn’t organised properly – that means your inspection can not happen or it can be happening on the day of settlement and you could be under the risk of the tenant saying no and refusing you access. It doesn’t happen very often but you have to make sure your bases are covered.
The thing I must stipulate is a pre-settlement inspection is important – but it’s not about checking how clean the unit is unless you put that into the contract. Because under the warranties that the vendor has when they sell a property it’s got nothing to do with how clean the unit is. If the unit is messy or you want it to be re-cleaned which you should – I’d put a clause in the agreement saying: “Upon settlement the apartment is professionally cleaned or is in a clean and satisfactory manor”.
Another one is, how many purchasers go around that I see and they look at an apartment and they go into contract – but they haven’t checked if the appliances are working? Now, they appear fine, they look fine but at inspection, when you need to check these things. So, there actually should be a pre-purchase inspection or while you are looking at the apartment you want to be checking the appliances and seeing if they work or if they don’t work.
Because if they don’t, when it come so settlement all the vendor has to do is put everything in the apartment in the state it was when – you being the purchaser – came and viewed the apartment. So, you’re actually a little bit liable there – so that’s why we always recommend to put in a clause saying that, “the vendor warrants that all appliances will be in good working order prior to settlement”.
I hope this helps. What I want to go into to is pre-purchase settlement. How we actually look at an apartment when you’re actually going to look at purchasing it – to make sure you’re covered and you don’t get any scary surprises further down the track.