Buying property during COVID-19 alert level 3
Buyers | 8 May 2020
By The team at settled.govt.nz
This page explains some of your options if you’re selling or thinking about selling during COVID-19 alert level 3.
New Zealand is in the middle of a unique situation, and it is likely to be challenging for everyone involved in selling and buying property. Be kind and consider the needs of others when you’re communicating about a transaction.
For general information about the current COVID-19 situation, please visit covid19.govt.nz
You can find information about buying and selling property during alert level 4 here.
If you’re also buying property during alert level 3, there is information here.
At alert level 3, professionals such as valuers, property inspectors and engineers, may visit a property if they cannot provide their services remotely, if it is safe to do so and if the property’s occupants agree. Professionals and tradespersons must observe physical distancing and comply with any industry-specific or government guidance relevant to their role.
If someone is working at your property, it could be difficult to continue to maintain 2 metres distance from them. In this case, it may be better if you and the other people who live there, leave the house until the person has finished their inspection. Remember, there could be a lot of demand for professionals because they could not visit properties at alert level 4. Please be understanding as buyers rush to meet their conditions. The conditional period may need to be extended.
If you’ve agreed to get something fixed at the property before settlement, a tradesperson can do that work at alert level 3. Make sure they maintain a physical distance of 2 metres from anyone while they are there. Make sure you keep records of who has worked on your property in case you need it for COVID-19 contact tracing.
During alert level 4, some sellers and buyers may have agreed to extend the conditional period until their region moves to level 2. Professionals (for example, property inspectors, valuers and engineers) are now able to visit properties at alert level 3, so you and the buyer may wish to consider changing the conditional period again. If both parties agree, the conditional period can change.
Some law firms and agents are still working remotely, and you should be prepared for delays.
If settlements were deferred to alert level 2 because there was uncertainty over what would be allowed at alert level 3, those settlements could now be brought forward to alert level 3 if you and the buyer agree. Talk to your lawyer or conveyancer about the best approach for your transaction.
Where possible, buyers should use virtual methods to inspect a property. If this is not possible, with your consent and the tenant's consent for a rental property, buyers can visit the property. A maximum of two people (from the same extended bubble) can visit the property at one time, in addition to a real estate agent.
You, and the other people who live at your property, should leave the property until the inspection has been completed.
If you (or your tenants) prefer that the buyers don’t come to your property, consider negotiating delaying settlement until alert level 2.
Read more about pre-settlement inspections and preparing for settlement here.
Buyers and sellers may move to a new property at alert level 3, including moving between regions. Moving services may be in high demand, so parties may wish to delay settlement until alert level 2.
Your agent should arrange for sanitised keys to be provided with no physical contact between any party.
Read more about settlement day here.
Be considerate of the buyer’s circumstances and needs – their situation may be uncertain.
If the property you are selling is tenanted, you will be affected by the new protections against terminations, which are explained on the Tenancy Services website.
Your tenant will also need to give permission every time anyone visits the property in relation to the sale (for example, the agent and tradespersons). If the tenant does not agree to a visit, it cannot go ahead.
While New Zealand is at alert level 3, you won’t be able to hold open homes. Where possible, buyers should view a property virtually, for example, by viewing a video of your property.
If required, private viewings can take place under alert level 3. Only people who are serious about making an offer are permitted to have a private viewing. However, there are some rules to protect your health and the health of your agent and buyers:
Before a viewing
During the viewing
If you don’t yet have an offer to buy your property, we recommend you talk to your agent about how you might market your property during this time. Agents are not allowed to put flyers in letterboxes at alert level 3.
If you don’t want to continue marketing your property at alert level 3, talk to your agent. You might agree to withdraw your property from the market or put your marketing campaign on hold. Usually, sellers pay the marketing costs upfront, and it may be that most of the budget has been spent, for example, Trade Me advertising may have been placed and paid for. Talk to your agent about what will happen to any unspent budget if you put your campaign on hold.
At alert level 3, you cannot visit a real estate agency office. You can use REA’s public register to find agents who are working in your area here. Most agencies have a website where you can find information about their team. You can meet agents by phone or video call to help you decide who you’d like to sell your property.
Read more about deciding to sell with an agent or privately here.
If you do want to sell with an agent, read more about the process here.
At alert level 3, the agent will explain the agency agreement by phone or video call. Make sure you take the time to have the agreement checked by your lawyer or conveyancer.
When you’re ready to sign the agency agreement, you can’t meet to do this in person. You may sign it electronically, or in some cases, you could receive it by contactless delivery from either the agent or a courier. You will need to sign it and courier it back.
Read more about agency agreements here.
When you sign the agency agreement, the agent will need to confirm your identity to comply with the Anti-Money Laundering and Countering Financing of Terrorism Act 2009. This can’t happen in person at level 3, so expect your agent to confirm your identity using methods that aren't face to face or to follow up on this when the country (or your region) moves to alert level 2.
At alert level 3, it is preferred that agents create an online appraisal and update it when they’ve visited the property at alert level 2. Be aware that the appraisal may change after the agent has visited the property because they may see things that affect the potential sale price (for example, problem building materials like asbestos.)
If it’s not possible to do an online appraisal, agents can visit your property, with your permission (and the tenant’s permission if the property is tenanted) to conduct an appraisal.
The agent needs to keep a physical distance of 2 metres from anyone at the property and ensure that they follow good hygiene practices (for example, using anti-bacterial wipes to wipe down any areas they touch).
Because they will go through all rooms in your property, if you think it will be difficult to maintain 2 metres distance from them, you and the other people who live there, should leave the property until the appraisal has been completed.
If you are a high-risk person, are self-isolating or have any upper respiratory symptoms, you must let your agent know as they will not be able to come to your property.
At alert level 3, a photographer or videographer may visit your property if it is safe to do so. They must keep 2 metres from anyone at the property and wipe any surfaces they touch. It may be better if you leave the property while they are there.
You may prefer to take your own photos and videos instead.
All offers, including auctions and any multi-offer process, will be presented to you by email, phone or video call. This may slow things down, so it is important to coordinate time between your lawyer and the agent for you to discuss the offers and any terms they have included in the sale and purchase agreement.
If you are ready to accept an offer and countersign a sale and purchase agreement, you can’t meet to do this in person. You may sign it electronically, or in some cases, you could receive it by contactless delivery from either the agent or a courier. You will need to sign it and courier it back.
New Zealand may continue to change alert levels, which could impact the sale of your property. Before you start receiving offers, talk to the agent and your lawyer about the conditions you might need to put in the sale and purchase agreement to protect you against changes in alert levels (for example, not being able to settle on settlement day because of the alert level).
If you’re thinking about selling your house by auction during alert level 3, we suggest you get your own property inspection or engineer’s report for your agent to share with buyers. This is because, under alert level 3, buyers may only ask a professional to inspect your house if you’ve accepted an offer from them and that offer is conditional on a satisfactory inspection report. Usually, any bids made at an auction are unconditional, so buyers may be put off bidding on your property if they don’t have a report to review.
The general selling process hasn’t changed, so we recommend you look through settled.govt.nz to read about planning and preparing to sell. You may have time during the lockdown period to prepare your property for sale.