Contemporaneous settlements spotlight fresh risks for buyers and advisers alike
A sharp rise in “no money down” property flipping deals is prompting fresh warnings about consumer risk and regulatory gaps – and creating new due diligence challenges for mortgage advisers advising first-home buyers and property investors in what is increasingly a sideways, rather than boom‑time, market.
Industry data cited by RNZ show contemporaneous settlements, where a trader contracts to buy a property and on‑sells it on the same day they settle, climbed strongly last year after a steep drop in 2023.
Cotality head of research Nick Goodall noted “a lift in these types of transactions last year, almost double 2024, and even more than what we saw through the COVID boom times”.
For borrowers, these deals can add an opaque layer between the original vendor and the ultimate purchaser, making it harder to assess true value and potential conflicts of interest – particularly when borrowing capacity is stretched and mortgage rates remain elevated.
Recent Cotality NZ Pain and Gain data show 88.1% of residential resales made a profit in Q4 2025, broadly flat on the previous quarter but well down on the late‑2021 peak when more than 99% of sales were in the black. National prices are now largely moving sideways rather than surging. In that context, some traders may seek larger on‑sell margins, heightening the risk that buyers overpay for flipped properties.
Six‑figure margins and ‘no money down’ mentoring
iFindProperty co‑founder Maree Tassell said she is seeing more traders lock up properties with long due diligence periods and then quietly market them to their own databases at a higher price.
“It’s quite common that there are some deals out there where people are making over $100,000‑plus on contemporaneous settlements, getting a property under contract,” Tassell told RNZ.
She is particularly concerned about mentoring schemes that target inexperienced would‑be investors.
“It’s all very sexy and it’s called no money down deals so they’re teaching people who know [not much] about property and don’t have the money to buy property just basically how to tie property contacts up and sell the contract,” Tassell said, warning that “there’s no protection for the consumer, there’s no protection often for the vendor”.
For advisers, this behaviour raises questions about whether the contract price their client is paying reflects underlying value, and whether a middle trader is capturing a large margin that erodes equity from day one.
Legal grey areas and fewer protections for buyers
Property law expert Joanna Pidgeon noted that traders buying and selling in their own name can fall outside the Real Estate Agents Act.
“People who buy directly from property traders who are not licensed do not have the same protections as when buying from a licensed real estate agent,” Pidgeon said, adding that deposits can be at risk if a trader runs into financial difficulty before they settle.
Tassell said her firm discloses clearly when it is acting as a licensed buyers’ agency and not purchasing in its own right.
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