Selling a house without building permits, with a bad driveway, an outdated kitchen, or a fixed rate mortgage? Read on for some more information and tips about how to get a successful sale in spite of these issues.
Selling a house with unconsented work
You have various responsibilities as a vendor (i.e. the seller of a property), and there are a range of provisions set up to ensure your legal compliance in order to effect smooth property transitions, keep buildings safe, and protect your buyer. Unfortunately, unconsented work on a property tends to adversely affect your real estate’s value, unless it can be remedied prior to sale.
The key date you need to know is 1st July 1992. If work that should have been consented was carried out on your property prior to this date, then you should engage a building inspector to do a safety check before you sell. While this ‘safe and sanitary’ report has no status under the Building Act and is not issued by council, it may serve to assuage any potential concern on the part of your interested buyers.
If any work took place after this date, and a consent was originally sought but never finalised, you can apply to your local council for a Code of Compliance. This involves a final inspection to assess the work and its compliance with any interim building code changes, so it would pay to know how much time has lapsed since the consent was sought, and perhaps take advice on the likelihood of consent being granted. A fee is payable on the work passing inspection, so while this could be a lengthier or costlier move, the final advantage is a fully compliant property which may carry a better real estate price tag.
If no consent was ever applied for or obtained, you can apply for a Certificate of Acceptance. This assesses compliance according to the building code provisions at the time the certificate is being sought as opposed to when the work was undertaken. In this context, your decision to seek such a certificate should be considered carefully because if the certificate is not granted it may be a costly process for you to rectify the situation.
Your property’s compliance with the Building Act ensures specific requirements for building quality are met, including for durability, weather-tightness, structural stability and fire safety, and your responsibility to the purchaser is secured by a series of warranties in the sale and purchase agreement.
If you can’t or choose not to remedy or mitigate any potential issues, you can still sell with these issues in place, although your property value is likely to be affected. To safeguard yourself into the future you should take legal advice, e.g your lawyer may add a clause to the agreement so the buyer effectively accepts any defects on purchase.
If you’re unsure as to the status of compliance for works on your property, just contact your local council and they’ll be able to tell you.
You can find detailed information on work that doesn’t require a building consent at building.govt.nz
Selling a house with a bad driveway
While driveways are rarely seen in property sales images, they are often one of the first things a viewer sees when inspecting your property, and can be a major blight to immediate curb appeal if unsightly or damaged.
A well-maintained driveway is unlikely to make a conscious impression on a buyer, but a poorly-maintained one can be a red flag, right from the roadside.
Consider the landscaping aspect of your driveway too. Easy care edging will appeal to buyers, as will low-maintenance planting or freshly-built and painted boundary fencing.
Is your concrete driveway just a bit discoloured or mouldy? Start with a good water blast and see how much fresher it could look. There are also commercial pressure washing services that can help lift grime and grease from old sealed concrete.
Repairing or fixing up a driveway could be money well spent. As they are usually fairly small spaces, concrete-sealing may be less expensive than you think. Larger or longer driveways can be gravel-sealed at less cost, a shorter-term solution but certainly one that won’t offend buyers in the short term if it’s freshly completed.
If you share a driveway with a neighbour, there is legal provision for them to make a reasonable contribution to the cost of the driveway. Generally speaking, a neighbour at the rear would contribute more than one at the front, as they would use a larger proportion of the driveway. There are specific provisions depending on how the driveway was created in a legal sense, so it might pay to take legal advice before you approach the issue.
Selling a house with a fixed rate mortgage
If you have a fixed rate mortgage on your property and you choose to sell, there are a few possible ways your lender can help you deal with the situation.
While the lender must allow you out of the fixed rate term contract, they are entitled to charge a ‘break fee’ in order to do so. A clean break (i.e when you want to resolve the mortgage with that lender and either not use the same lender again, or take out a new mortgage in a different name, or not have a mortgage with any lender anymore) will generally attract an early termination fee, so you might want to check out how much that is going to be at the outset, and factor it into your financial picture.
If you choose to continue your relationship with the same lender, you may be able to transfer the existing fixed rate mortgage loan to a new property, with all the existing contract conditions in place. This can only happen if the borrowing party is to stay the same, but may allow you to negotiate on any fees charged.
Remember, financial lending is as competitive as any other industry, and the lenders want to keep your business. Unfortunately, the average Kiwi mortgage consumer is often unaware or not confident in their ability to negotiate better terms and rates for their real estate loans. Using an independent mortgage broker can be a good way to leverage a ‘middle man’ to get yourself a better deal.
Similarly, when selling property, the negotiation of better real estate agent fees and commissions is a key component of the MyPitchList online listing service.
If you’re actively looking for another property while selling the first, your lender might offer you a ‘bridging’ loan or bridging finance, which will allow you to buy another property before you sell the first. In this instance, a short term loan is offered (usually 12 months) to bridge any gap between purchase of the new home and sale of the old. This can be a risky strategy if the old house takes time to sell, and in some cases, people end up paying the outgoing on two mortgages at once. Be sure you go through your financial position very closely to allow for the worst case scenario.
Selling a house with an outdated kitchen
As the place where people gather, cook and socialise, the kitchen can be a real selling point in a home, and woefully outdated versions can impact your property’s value.
It will help to define your target buyer before making a decision about how to prepare your outdated kitchen before you sell your property. Younger, professional couples might relish the opportunity to do up an outdated kitchen, while older empty-nesters might enjoy the quirky throw-back nature of a dated kitchen. Busy families are more likely to want convenience and functionality in a kitchen, even if it’s not the sleekest-looking room in the house.
You’ll also want to consider the budget you have, if any, to freshen up or make repairs to the kitchen. Here are a few ideas to consider if you feel your outdated kitchen might slow down or preclude a successful real estate deal:
🍽 Define your kitchen’s era. If you can’t put in a new, modern kitchen, consider highlighting the period features of the one you have. While it’s true the majority of buyers will prefer a neutral palate, creating a fresh, new-looking era-specific room can also appeal, especially if it’s in keeping with the style of the whole home. Do your research and be sure to stick with the ‘safer’ end of the period’s style, e.g if your kitchen is classic 1970s, choose plain earthy shades such as yellow or brown in preference to garish paisley.
🍽 Start with a deep clean. Before you start ripping out cabinets or knocking down pantries, just remove everything that’s not nailed down out of the kitchen and clean what’s left- as if you’re expecting royalty. This will help clarify what’s really in need of repair or replacement, and what may have just been lurking under unseen layers of grime.
🍽 Paintwork and floors are two of the most effective but labour-intensive DIY jobs you can undertake, so get to them first. Will a new coat of paint freshen up your cabinetry or kitchen walls? Talk to your paint supplier about the popular colours people are using in kitchens - they know better than anyone what’s really on trend, and what’s tried and true. Floors may be a bit trickier, and you may need to take some advice, particularly if the floor is damaged or unsightly. Do you have the budget, time, ability and mental fortitude to lift up an old floor and perhaps polish floorboards underneath? Or could you look at an alternative treatment such as inexpensive vinyl? Outdated kitchens are often small spaces, and flooring providers offer hefty discounts on end-of-run stock, so get smart about asking to see what low-budget options they have to fit your dimensions.
🍽 The bench tops are likely the most expensive item to replace, but in some cases a new set of tops might be the most effective transformation in an older-style kitchen. It’s worth remembering future buyers prepared to put their own stamp on a space will find the prospect of replacing their own cabinet doors or taps far less daunting than replacing the countertop. Depending on the material of your bench tops, there may also be DIY or simple repairs you can make yourself.
🍽 Don’t overlook appliances, whether they’re chattels or not. The effect of a sleek fridge, oven or even a benchtop coffee machine can divert attention away from the less desirable features of the kitchen, while dated appliances will only deepen the impression of unfavourable age.