BANK OFEvery week in our auction rooms I getto see a huge range of emotions playingout. I’m often very moved by the dramathat a competitive process can create forattendees and my heart goes out to them.There are tears about missing a muchwantedbut very sought-after property,there’s elation at successfully purchasing,there’s a genuine pride at finally getting onthe property ladder and, for some parents,there’s the realisation that without themthe purchase would not have been possible.These are tears that I can definitely relate to.It seems more and more parents are seeingwithdrawals from the trusty, rusty or evencrusty ‘Bank of Mum and Dad’ and as wepersonally get a little bit nearer to that timeourselves, I thought I’d take a closer look.Obtaining funds from family is not a newphenomenon, but it is a very importantone for some first-home buyers – and withlofty deposits often required, it can involvebig numbers. It’s essential parents areaware of this and that’s why we will oftensee parents not just on auction day butthroughout the whole process, includingopen home attendances, and second andthird visits. Being part of a very close family,I imagine that I’d want to do this as welland whilst some real estate professionalsstruggle with large family viewings – andeven larger post-visit family debates – bestyou get used to it!During my research, I’ve also discovered thatproviding funds is not as straightforward asit once was.Originally the main means of assistingwere, firstly, contributing to the deposit,to a level the lender was happy with, and,secondly, supplementing additional fundsto ensure the debt-servicing criteria weremet. It’s often referred to as a guarantee.This second method needs to be carefullythought through by parents, as a default bytheir son or daughter (and much as we don’tlike to imagine it, this can happen) couldsee them shouldering the responsibilityfor the loan themselves. This can becomeextremely uncomfortable, especially if theyhave their own financial commitmentsand pending retirement. To address this,there have been changes to the legislationdeeming that any and all guarantors toa loan need to demonstrate the abilityto meet the required loan payments toavoid the worst from happening.As much as we all love our families, if youare considering helping in this particularway it’s essential to get independent advice.So, what are these purchasers buying?It seems they are trying everything.First-home buyers with limited budgetsare thinking outside the square and insome cases the market is giving them arobust education in looking at propertiesthat buyers might have had the luxury ofexcluding in the past.Varied locations, new subdivisions madeinfinitely more desirable due to improvedmotorway access, new schools andcommunities, are all hugely popular.We are also encountering parents lookingon behalf of overseas offspring with BritishPounds and American Dollars burning ahole in their pockets and those budgets areextraordinary when compared with whatwas once considered necessary for makinga purchase in our local market.So much of what we achieve as humanbeings relates to how we have helped orbeen helped by others, and I imagine oneday I’ll be in an auction room helping oneof our family members make a withdrawalfrom the trusty bank of Mum and Dad too!So, to all those parents in the same position,well done, without you a whole generationwouldn’t get to enjoy what we thought of asa right – and that’s home ownership.Lynette McFaddenHarcourts gold Business Owner027 432 0447lynette.mcfadden@harcourtsgold.co.nzWhangaia ka tupu, ka puawai.That which is nurtured, blossoms then grows.PAPANUI 352 6166 | INTERNATIONAL DIVISION (+64) 3 662 9811 | REDWOOD 352 0352PARKLANDS & NEW BRIGHTON 383 0406 | GOLD PROPERTY MANAGEMENT 352 6454GOLD REAL ESTATE GROUP LTD LICENSED AGENT REAA 2008 A MEMBER OF THE HARCOURTS GROUPwww.harcourtsgold.co.nz
Style | Feature 17King craftsmanHad Kingswood Skis’ Alex Herbert not experienced disappointment asan 18-year-old, it may have taken him longer to find his true passion.Words Shelley RobinsonABOVE: Alex Herbert turned his love of snow into a career creating bespoke skis.
Change language