Buying a house is an exciting time, but it can also be stressful and confusing. You need to be able to act promptly when you find ‘the one! This is where we can help. We want to make your house buying experience as easy and stress-free as possible. Here is the general process for buying a house in New Zealand:
Please note, if the house is being sold at auction, the signed agreement will be unconditional. So steps 1 and 2 below need to be conducted prior to the auction.
The steps in the process of buying a house in New Zealand.
1. Preliminary Matters
To do:
Pre-register with us so we can verify you
Get finance pre-approval (if applicable)
Apply for Kiwisaver withdrawal pre-approval (if APPLICABLE)
Apply for Kiwisaver Homestart Grant pre-approval (if APPLICABLE)
Even if you are just considering buying a house, we recommend that you 'pre-register' with us so that we can keep you on the right path from the get-go. It costs nothing to pre-register with us, but it could be very costly for you in the long run if you leave it too late to get us involved. There are also new rules that apply to all lawyers now which prevent us from acting for a new client before we have verified their identity. So it is a good idea to complete this process now so there are no holds ups when you do need us. We are part of your team on a mission to help you achieve your ambitious, so get us on board as early as possible for the best result.
If you are not sure who to contact to arrange finance pre-approval or any of the other things you need to organise, let us know and we will put you in touch with the right people.
Once you have found a house you like, get in touch with us so that we can check it for you before you sign anything. A sale and purchase agreement is a legally-binding contract. Once signed, it cannot be changed unless you can get the consent of the other party to change it. Major problems can arise if, for example, a condition that has been inserted in the agreement is not worded favorably for you, or a condition that is needed is forgotten altogether. We understand that when making an offer on a house, time is often of the essence, which sometimes puts people off having the agreement checked first. However, this can result in costly problems. Because we are mindful of this issue, we offer a 'txt-to-check' service where you can text us a photo of the draft agreement for checking with fast turnaround, to ensure that things are done properly, but so that you don’t miss out on putting your offer in quickly.
Important point 1: The real estate agent is acting on behalf of the seller, not you. By contrast, we ‘have your back’!
Important point 2: Agents often suggest a 'solicitor's approval condition' in the agreement instead of letting you check with us before signing. However, these conditions are not as good as having us check everything over before you sign the agreement. The matters that a lawyer can check under such a ‘Solicitors Approval’ condition are very limited.
Please note: If the property is under the Unit Titles Act 2010 i.e. operated by Body Corporate, there will be additional matters to consider that you should contact us to discuss.
2. Found the house
To do:
Find the right house
Get us to check the Draft agreement
3. Signed Agreement
to do:
Once checked, Sign the agreement
If you have not changed the standard terms of the agreement, your deposit is now due
We will work with you towards satisfying any conditions in the agreement
Once the agreement for sale and purchase is signed by both the seller and buyer, this means you have a binding contract on foot (albeit, usually a conditional contract). The real estate agent will forward the signed agreement through to us. We will then order a copy of the title to the property, check that it is all in order and write to you about the details of the property and the purchase process and the conditions in your agreement. We then need to work together to satisfy the conditions in the agreement.
Some common conditions people include in their agreement are:
LIM Report
This is one matter we recommend the agreement is conditional upon. If the agreement is conditional upon a LIM report, you must order this from the Council within five working days of signing the agreement. Once you receive the LIM you should forward it to us for checking.
finance/Money matters
If you need a loan from the bank to complete the purchase, the agreement should also be conditional upon finance. We strongly recommend you have unconditional approval of finance in writing from your bank before the agreement is declared unconditional. You should forward us a copy of your finance approval for checking once you receive it.
You will also need to apply for your Kiwisaver withdrawal and Homestart grant if you intend to (and haven't obtained pre-approval) as soon as possible. There are very strict time-frames for processing these applications.
Other matters – e.g. property valuations, builders reports, 'P-Tests', due diligence
There may be other aspects that you need to check such as obtaining a valuation on the property (which may be a condition of your finance approval anyway), getting a building report, or checking any lease or tenancy documents relating to the property to name some of them. For instance, you don’t want to be left in the situation of being landlord to a tenant with no valid tenancy agreement in place. We also recommend that you check that you can get insurance on the property at this point.
Once you have confirmed to us that you have completed your homework on the property and are satisfied with everything, we will notify the seller’s lawyer that the conditions are satisfied and the agreement is ‘unconditional’.
4. Unconditional!
To do:
If you have not paid the deposit before, it will now be due
CONGRATULATIONS!
We will confirm your contract unconditional for you. At this point your purchase is a done deal! You are 100% committed to purchasing, and the property is off the market and can not be sold to anyone else.
If you haven’t already paid the deposit, you will need to pay this now. Usually, this is paid to the real estate agent who will provide you with instructions for payment. Please note, the deposit does not have to be paid on the day that the agreement becomes unconditional. It should be paid as soon as is practicable, but the seller would need to issue a notice to you before they can cancel the agreement for non-payment of the deposit (they cannot just cancel immediately).
We will now sort out all remaining matters with the seller’s lawyer. We will also complete an assessment of your circumstances to check what ownership structure is best suited to you, and whether there are any other matters that should be addressed alongside the purchase and discuss this with you. For example, Wills, relationship property matters and trust matters often arise when you purchase a property.
In preparation of settlement we will need to get some information from you to complete the documents and you will also need to arrange your bank loan documents, insurance for property, funds for settlement and a pre-settlement inspection. For more information about this stage of the process, please see our 'Unconditional Purchase To-Do' page here.
Before the settlement date you will also need to sign some documents. Once everything is ready for signing, we will arrange for signing with you. You can visit us at our offices or we can meet you at a place that is convenient for you. Or alternatively, if it is easier for you, we can email you the documents for you to take to a JP for signing. In that situation we will explain everything to you over the phone or via Skype.
If you need to contribute funds to the purchase over and above the initial deposit that was due under the agreement and your mortgage and Kiwisaver funds, we will also discuss at this point how much extra money you need to pay and how to do this. This money needs to be to be paid into our trust account before settlement.
6. Settlement
To do:
Leave everything to us and wait for the call that you can collect the keys!
This is the exciting part; when the property officially becomes yours! As soon as we have completed settlement you can get the keys and can start moving in. The ownership of the house will be officially transferred into your name.
On the day of settlement, we will liaise with the seller’s lawyer and once everything is in place, we will pay the funds across to the seller’s lawyer.
We know you will possibly be waiting for settlement with moving trucks. We try to complete settlement as soon as possible in the day so that you can get into the house. However, what time the settlement occurs is often completely out of our contract as it depends on other third parties’ actions and how quickly we receive the loan money from your bank and other factors. So, unfortunately it is impossible to anticipate what time settlement will happen other than to say it is supposed to be completed no later than 4pm.
We will call you once the settlement has gone through following which you can pick up the keys for the property and move in. Generally real estate agents hold keys on behalf of sellers. Legal costs are usually paid by deduction on settlement. We will provide you with draft accounting statements beforehand.
We will notify the Council (and the water company) of the change in ownership and also ensure that your bank mortgage (if any) is correctly registered.
We will send you copies of the relevant documents for your records, including a copy of the title showing your name on it. And you can sit back and enjoy your new home!
DISCLAIMER: This information is given as a guide only. All information in this website is to author’s knowledge true and accurate. No liability is assumed by the authors, or publishers, for any losses suffered by any person relying directly or indirectly upon the information contained in this website. It is recommended that you consult a representative of Stacey Graves Ltd trading as Movest before acting upon this information.