An Auckland couple trying to sell their home before their new one settles say they're feeling "helpless and stressed" as lockdown restrictions prevent buyers from viewing it.
It comes after a community case of COVID-19 plunged New Zealand back into alert level 4. Lockdown restrictions, in place until at least August 31 for Auckland, prevent open homes and private viewings, meaning buyers can only view properties online.
Auckland couple Eva and Richard say the sudden lockdown is affecting not only their income, it's also stalling their house sale plans.
After buying their current one-bedroom Epsom unit in 2016, their family has since grown to four. In early August - before the lockdown started - they bought a bigger home in Mt Wellington, agreeing on a settlement date of November 10.
Just over a week before lockdown started, they listed the unit with a real estate agent, paying $3500 in marketing costs. But as lockdown restrictions now prevent buyers from going to see it, they're worried it won't be sold in time, telling Newshub they're feeling "helpless and stressed".
"Lockdown is totally screw[ing] up our plan of changing home and puts us in a very stressful situation," the couple says.
Their bank's approval of their mortgage is based on selling their existing home before the new one settles. They're paying interest on the deposit for the new house, advanced to them by their bank.
To give potential buyers time to view the property and complete the purchase process, they're hoping to sell by the end of September. But with COVID-19 cases reaching 210 on Wednesday, and as modelling experts believe that number will continue to surge, an alert level change may not come in time.
"If we can't settle our new home on time, we may lose our new home and deposit or face a very high late settlement interest," the couple says.
For homes that have sold where the settlement date falls within the level 4 lockdown period, REINZ chief executive Jen Baird suggests buyers and sellers talk to their lawyer about getting the date changed.
Under level 4 restrictions, settlements can only go ahead if it doesn't involve people moving. Examples are buying a tenanted property, where the tenants are staying on, or buying a section.
"At this level, buyers are unable to move into new properties and sellers cannot move out of their properties, which is why we recommend that settlements are deferred until personal movement is permitted for both the buyer and seller," Baird says.
Many real estate agents have remote processes in place. These may be of help to buyers and sellers in the middle of negotiations.
“Many agents will have well-tested practices in place that enable them to continue to deliver remote appraisals (which must be followed up with physical appraisals as soon as the Alert Level allows) or listings, electronic sales, and purchase agreements, and online or phone auctions," Baird says.
For homeowners who have bought elsewhere and have committed to a marketing campaign, Barfoot and Thompson senior legal counsel Lisa Gerrard said Sale & Purchase Agreements should include clauses protecting buyers and sellers.
"The marketing and sale process can still proceed in these cases but it's important that vendors and purchasers have clauses in their agreements that cover off matters related to being unable to view the property and, if required, deferring settlement until personal movement is allowed," Gerrard said.
As Eva and Richard's new home settlement date isn't till November, the unit is listed for sale by negotiation. Private viewings are allowed under alert level 3, the couple hoping an alert level change will bring in more buyers.
"Less viewers in level 3 (and 4) means [it's] hard to sell [for] a price that's enough to settle on our next home," the couple said.