When you believe that you can get your finance sorted, you then enter the painful and exciting process of negotiating the price with the seller. In that process, we have been doing a lot of research about the property, to evaluate its fair market value and to find ways to put advantages in our hands. As you might imagine, at this stage, you are entering a mind game, where you are trying to understand who the sellers are, what drawbacks the property may have that would bring the price down, or any other data that can be a negotiating tool. We found out on www.qv.co.nz that the property was bought in 2004 for $170,000. We were also able to discover that the owners were in their mid-thirties and that the woman was a solicitor in a law-firm, which made us think that they were potentially not in the need and desperate to sell. We also found out that the property had been on the market for eight months already and that there had been very little interest from other potential buyers. It seemed odd to us considering the quality of the land and its potential, but it also made sense since most people want to be closer to the ocean, even with tiny sections. This fact was actually a good thing for us and we made up our mind to push an offer through, starting low.

While we waited for the response on our first offer we returned to the Estate and met with Kevin, one of the other land owners who provided us with valuable information in regards to features and history of the subdivision. It was started in the 1990’s by local ‘characters’ who had a dodgy reputation but an amazing vision for the Estate. They fought with local authorities to create this giant subdivision secluded in the Coromandel Forest Park, which they thought they would sell for big bucks to wealthy weekenders. The council made them bury power and phone, seal the whole subdivision road and provide a flood of crazy reports on archeology, landscape, roading, natural and visual impact. Surprisingly enough, they did it all. The council made them wait another 6 month before giving the green light – combined with low number of potential buyers – they went down, leaving the Estate with great infrastructure but no governing body. Some lots were used as payments for contractors, some other turned into weed farms. Fortunately, over the years, this jewel was discovered by passionate individuals who started to take over the place…building sheds, then cabins, then starting to really look after their environment. Nowadays, the Estate has its own incorporated society and a great mix of members with complementary skills and will in funding pest control, road maintenance and the well-being of all.

The process of offers and counter offers is especially nerve-wrecking. You never have any direct communication with the owners and what the agent says is always tinted with suspicion as he is primarily working for the adverse party. At some stage, you have great hopes that they will accept your offer, encouraged to think that by the agent who wants to keep you excited, then deception when the counter-offer arrives. In our case the negotiations dragged on for about 8 weeks. We expected a counter-offer on our first offer but had to wait ages until it arrived and then it was a week later than promised by the agent..leaving us with days (and nights) on an emotional roller-coaster. Finally when it arrived, our offer had been scratched through and another, outrageous offer written below.

The closer you get to a reasonable figure, the more you look into details about the property. The Real Estate Agent, Kim Radick, was actually very helpful in the whole process, going the extra mile to make the thing happen with sincerity. We purchased the LIM report (Land Information Referendum) from the council – $200 – and had a read through the 500 pages that arrived by mail! At this point we started calling local trades to find out if our project was even feasible. Is there an available builder around? Can a digger come soon to start preparing the site? How much will it cost to gravel the driveway? …is there power?

All went well, apart from that last question. With the help of a Powerco contractor, we discovered that the nearest transformer box had no transformer in it! We had to track down up to the installer of the network at the time to understand why us (all other lots seemed to have a transformer in their box) and how to deal with that? After quotes, long phone conversations with the power infrastructure people and institutions in Wellington. No escape, we would have to pay for that transformer, and not even be the owner of it! It was an extra cost of $8200 for that.

This last find allowed us to eventually settle the price we were willing to pay for the property.

After 2 month of a tiring process, Champagne!

To buy a property, obviously you need to finance it. In New Zealand, the national sport (after Rugby and Barbecue) is buying and selling properties… Considering the competition between banks out there to sell you mortgages – the rat race starts on all walls and shop windows with a shower of rates to make you dizzy – we thought it would be easy. We would just have to push the door of our bank and we would come out with money and a good rate! We both have a decent salary and I have a long lasting business relationship with my bank. We vaguely heard that brokers could help you out, out there, but why would you pay for an extra commission for what we should get directly? The only thing you need is to stand your ground and get the best rate.

Well, hum… we discovered that it’s a bit more complicated than what we thought. To start with, when you are a business customer with ASB, all your inquiries will be dealt with by the Business Unit, even if it is a personal matter…and they are not too keen on giving you money for a property outside Auckland! “you mean, just land covered in bush, 2 hours from Auckland, with no house on top?”…”a gravel road to get there?” (at this stage, we barely avoided a collapse of our account manager). After this failed first meeting, a discussion with the National Manager and the meeting with another business account manager, no progress was made. They would exceptionally lend 60% for the purchase of the land and would require inspections before giving more for the house to be built. Thanks, but no.

That is when I thought it would be a good idea to see what a broker could do for us. After a call to a friend in the industry, I get a meeting with John – funny enough lived many years in France. With him, the whole world of mortgage and finance strategy unfolds. Nothing that the bank ever explained to me! They had never looked at my available funds, my goals in short and mid-terms or any solution for me… John looked at all that and we planned on a strategy that would save us fees the first year while we are building, with a floating rate account, that will eventually be fixed in the future, when the house is completed.

We discovered that the story is not only about getting the best rate available, but getting a strategy that works for you with your assets and goals, which banks don’t seem to provide, or at least mine. Also, it is also very good to get somebody to answer your questions and look after issues if they arise with the bank. `