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Selling property during COVID-19 alert level 3

Sellers  |  28 August 2020  | By The team at settled.govt.nz

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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.

To see what alert level your region is at and for general information about the current COVID-19 situation, please visit covid19.govt.nz

If you’re also buying property during alert level 3, there is information here.

Summary of activity at alert level 3
  • Moving house is permitted at alert level 3 – including to and from a region that is at alert level 2. If you will be crossing into a region at a different alert level, you should bring documents to support your reason for travel, if possible.
  • Talk to your agent and lawyer or conveyancer, about what to do if you have a transaction under way.
  • Property inspectors, valuers, engineers and tradespeople can visit properties at alert level 3 if it is necessary, if they comply with public health and industry-specific guidance and if the property’s occupants agree.
  • You can find information about what you can and can’t do at alert level 3 on the COVID-19 website.

Sellers who have received an offer

Meeting conditions

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 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. You can also ask anyone who is visiting your property to wear a face covering. You can find guidance about face coverings on the COVID-19 website.

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 you keep records of who has worked on your property in case you need it for COVID-19 contact tracing.

Changing the conditional period or settlement date

If both parties agree, the conditional period can be extended, and/or the settlement date can be postponed, until your region or the buyer’s region moves to alert level 1 or alert level 2.

Talk to your lawyer or conveyancer about the best approach for your transaction. Many law firms and agents are working remotely, and you should be prepared for delays.

Pre-settlement inspections

At alert level 3, buyers should use virtual methods to inspect a property, where possible.

If this is not possible, with your consent, and the tenant's consent for a rental property, buyers can visit the property if they are visiting from within the same region. A maximum of two people (from the same extended bubble) can visit the property at one time, with a real estate agent. Buyers must meet all health requirements when visiting the property.

Buyers can travel from a region at alert level 1 or alert level 2 to a region at alert level 3 to conduct a pre-settlement inspection as long as they do not return to a region at a lower alert level. This means buyers must stay in their new region until the property settles.

Alternatively, you could talk to them about postponing settlement and the pre-settlement inspection until your region is also at alert level 2.

If a pre-settlement inspection is arranged, 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 your region moves to alert level 1 or alert level 2.

Read more about pre-settlement inspections and preparing for settlement here.

Completing settlement and moving

Settlement and moving can go ahead at alert level 3. House movers can work at alert level 3, so buyers and sellers can move house if they follow the government guidance on the COVID-19 website.

During alert level 3, travel into, out of, and through Auckland is heavily restricted. The Police are enforcing this at checkpoints around Auckland.

People can travel into, out of, and through Auckland if they are:

  • returning to their primary home
  • relocating a home or business.

People travelling for these reasons do not require an exemption from the Ministry of Health, but should bring documents to support their reason for travel, if possible.

Your agent should arrange for sanitised keys to be provided with no physical contact between any party.

Read more about settlement day here.

Considering the buyer’s circumstances

Be considerate of the buyer’s circumstances and needs – their situation may be uncertain.

New Zealand is in the middle of a unique situation where the health of all New Zealanders has to be the priority. It is likely to be stressful for all parties involved in a transaction, so be kind and consider the needs of others when you’re communicating about a transaction.

Tenanted properties

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.

Sellers who have listed and are still marketing

Open homes and private viewings

While your region 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, however only people who are serious about making an offer should have a private viewing. There are some rules to protect your health and the health of your agent and buyers:

  • At alert level 3, potential buyers are not allowed to travel between regions to go to a private viewing
  • Anyone living at the property, including tenants, must agree to each private viewing.
  • All viewings must be booked in advance.

Before a viewing

  • Your agent will check on everyone’s health.
  • If you or someone at the property is a high-risk person (for example, a person with a pre-existing medical condition), the agent won’t be able to have private viewings at your property.
  • If you or an occupant of the property, or a potential buyer are self-isolating or have been in contact with someone with COVID-19 within the past 14 days, then the private viewing cannot take place.
  • If anyone is ill with respiratory symptoms, they cannot come to the property, and if you or anyone in your family are ill, no one can come to your property.

During the viewing

  • The property occupants must not be at the property during the viewing – you could go for a walk or a short drive.
  • There should be no more than two people from the same extended bubble and the agent at the viewing.
  • Your agent will open all internal doors before the viewing, so people don’t touch door handles in your house. Anyone viewing your property should use hand sanitiser, and they are not allowed to touch any surfaces in your house. Anyone visiting the property should be asked to wear a face covering.
  • There should be no more than two private viewings per day. The agent should clean all surfaces after each viewing.
Marketing the property

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.

If you are thinking about selling

Listing your property

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.

Getting an appraisal

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 and wearing a face covering).

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.

Signing the agency agreement

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.

Complying with the anti-money laundering obligations

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.

Professionals visiting your property

At alert level 3, professionals such as property inspectors, valuers, photographers and videographers 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. You can ask them to wear a face covering for the duration of their visit. It may be better if you leave the property while they are there.

You may prefer to take your own photos and videos instead.

Receiving offers

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 or conveyancer 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 or conveyancer 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). 

The selling process

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.

If you have a problem or concern

If you are concerned that a real estate agent isn’t observing the COVID-19 health requirements, you can report a COVID-19 breach using the form on the New Zealand Police website.

If you have a problem with a real estate agent that you can’t resolve directly with them, find out how the Real Estate Authority (REA) can help you on the REA website.

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