Frantic Auckland buyers rushing in to snap up homes

Barfoot and Thompson's Mt Albert branch manager Jean Smith said Auckland buyers were under increasing pressure - particularly in city fringe areas in sought-after school zones. Photo / Richard Robinson

Some Auckland house hunters under pressure to find the right property are making snap purchase decisions after viewing their new home for less than 30 minutes.

Frustrated buyers who have lost at previous auctions are among those "jumping" on properties after viewing them only once, experts say.

But buyers rushing the most expensive purchase decision of their lives are being warned not to forgo necessary due diligence checks.

Today's NZ Herald-Quotable Value Property Report shows stark rises in house prices for some of the 420 North Island suburbs profiled.

Try our interactive here: What your home is worth

Research from the United Kingdom suggests the average buyer there spends just 33 minutes viewing a home and one in four view a property only once before signing a purchase agreement.

While there are no New Zealand figures, Barfoot and Thompson Mt Albert branch manager Jean Smith said Auckland buyers were under increasing pressure - particularly in city fringe areas in sought-after school zones.

While most buyers were prudent, a shortage of available properties and soaring prices meant some were making impulse decisions - including pre-auction offers within 24 hours of their first viewing - to avoid losing their dream house.

"We're probably now getting purchasers who are a bit frustrated," Mrs Smith said. "They're coming to auctions and missing out on a few."

But while motivated buyers might have viewed a property for only 30 minutes, most still did due diligence, she said. LIM reports and title searches were usually provided by agents in property packs.

"They've seen the property this morning and they're quickly getting their solicitor to check the title.

"But they might have been looking for six months and know what they want.

"It's not that they haven't done any background checks."

Stephen Hart, who runs online property resource Hometopia, said with Auckland properties generally selling by auction, buyers had become disillusioned with forking out for costly pre-purchase reports, only to be repeatedly outbid.

Caught in a cycle of endless open homes, frustrated buyers might spend less than 30 minutes viewing a property before deciding to purchase or bid at auction. "Maybe the house has a few warts. But if you've lost out five times and you've [paid for] five building inspections and five valuations ... you just want the process over with."

However, snap purchase decisions without proper due diligence put buyers at significant financial risk, Mr Hart warned.

Buyers trying to finalise a quick sale could still do background checks online, including a property's CV, LIM report, and researching the neighbourhood and recent sales.

"With rising interest rates and the likelihood of a potential correction, it could be a drastic error not to have done your price due diligence correctly."

Real Estate Institute chief executive Helen O'Sullivan said the proportion of homes selling by auction had fallen in recent months, and homes were taking longer to sell as the market slowed.

Most buyers viewed a property more than once before finalising the purchase.

But with new listings "very tight" in Auckland, buyers had to remain measured and not take shortcuts, she said.

"It's possible that people can get frustrated.

"I know a mortgage broker who refers to 'the nutter in the room', that person who pays too much for a property - who's just had enough of going to auctions and missing out."

Risk moved buyer up on the property ladder

Steve Anderson bought his first house at auction just three days after viewing it and only hours after securing finance, but says hesitation would have cost him the property.

Mr Anderson bought the two-bedroom cottage in Arch Hill, central Auckland, just days after a quick home inspection and without a building report or valuation, one of the conditions of finance.

Fortunately the valuation was favourable and the March 2010 purchase of his first home went ahead.

The 37-year-old accountant admitted it was risky to buy so hastily but the move earned him enough equity to trade up to a larger house in just three years.

"It was the best thing I've ever done. I sold the property for $160,000 more than I paid for it. I could only have bought the second property because of the first property."

His next purchase was decided almost as quickly when Mr Anderson and his partner found a three-bedroom house on a much larger section for sale in Chatswood on the North Shore earlier this year.

The couple discovered the house had passed in at auction so made an offer conditional on them selling the Arch Hill cottage.

- additional reporting Natalie Akoorie