Selling a house means change, which can be very exciting. But it can also be stressful and confusing. This is where we can help. We want to make the sale process as stress-free as possible. The following outlines the general process for selling a house in New Zealand to help you to get your head around the procedure and also to help you to achieve the best outcome:
The steps in the process of selling a house in New Zealand.
1. Get listed:
Pre-register with us so we can verify you
Decide whether to list with an agent or sell privately
Have your listing agreement checked by us (if applicable)
Have us prepare a draft sale and purchase agreement (if selling privately)
Even if you are just considering selling 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.
LIST WITH AN AGENT
Listing your home with an agent can have many advantages. The agent will be able to give you all the necessary information about the sale process and you will decide a marketing plan in conjunction with their advice. The listing agreement document is a legally binding contract and we recommend that you have your lawyer check it before you agree to its terms.
SELLING PRIVATELY
With the rise of websites like TradeMe, which make advertising a house for sale simple, it is becoming more popular have a go at selling your house privately. One factor that does still put people off doing this is the complexity of the whole sale process, and especially preparing the Agreement for Sale and Purchase. We can obtain a copy of the title for you and prepare a draft agreement for you so you are ready to go when someone is interested in the property.
Regardless of whether you are selling through an agent or privately, we recommend that you get together as much information about the house as you can to give to potential buyers.
Potential buyers often like to do their homework on a property before putting in an offer, which may include checking the legal aspects (the Agreement, Title, Council LIM), getting finance in order and checking the house (i.e. a builders report and/or valuation report, as much detail about the property as possible). All this homework can be a lot of hard work and expense for each potential buyer, and some potential buyers will give up! So, if you can make buying your house as easy and cost effective as possible for them by providing as much of the information they need as possible, you will potentially increase the number of potential buyers, and in turn the price you get for the house. This is especially important if you are selling by auction as all bids need to be ‘unconditional’. You may well receive an offer that is more favourable to you because it contains fewer conditions meaning that the Agreement is less likely to fall over if issues arise before the buyer declares the Agreement unconditional. This also potentially means the conveyancing process is more straightforward and therefore involving less legal cost for you to meet. Information we recommend you get together before you market the property is explained below.
VERIFYING THE LEGAL ASPECTS
The Title, LIM and Agreement are all legal documents, so it is important for a lawyer to check them to make sure that there are no problems with the property. In the unlikely event that a potential problem is revealed, it may actually be advantageous to you to disclose any issue to prospective buyers upfront and contractually protect yourself from either (i) being sued for breach of contract, or (ii) protecting yourself from the buyer’s lawyer raising issues during the conditional period of the Agreement, which may risk the deal falling through or might give the buyer ammunition to try and negotiate a better deal for them. In our experience, buyers are often quite willing to accept a defect when they know about it upfront.
If you want to check that everything is in order with the property upfront. Please contact us directly if you wish to discuss this further.
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. Arm yourself with info:
To do:
Get together as much information about the property as you can
Have us check the property information
3. Offers:
Arrange draft sale and purchase agreement
Have us check the draft agreement
When you have an offer to negotiate with a potential buyer, you will need to enter into an Agreement for Sale and Purchase (“Agreement”). The real estate agent will prepare a draft Agreement to present to you from a potential buyer who wishes to make an offer. If you are selling privately, you (or the other buyer’s lawyer) will need to prepare and complete this Agreement.
The 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. We recommend that you have your lawyer draft the Agreement before the parties sign it. Alternatively, if you would like us to check a draft agreement for you, you or the agent can contact us directly.
4. Agreement:
To do:
Provide us with account details for surplus funds on settlement
Often the Agreement will contain conditions (unless the property has been sold at auction). If it does contain conditions; we will discuss these with the buyer’s lawyer and will keep you informed of progress with satisfying the conditions. Once the agreement is unconditional, congratulations are in order! We will sort out everything from here with the buyer’s lawyer.
We will liaise with your bank to arrange discharge of the mortgage (if any) from the title to the property you are selling before it is transferred to the buyer.
We will take care of the rates and water, ensuring that the correct apportionment will be made between the seller and the buyer as at settlement, so you don’t need to worry about these things.
You should tell us where you would like any surplus funds to be paid following settlement and supply us with either a deposit slip or the top of your bank statement showing the correct bank account details.
5. Prepare for Settlement
To do:
arrange with us to sign documents
Allow purchaser to inspect the property prior to settlement
Before the settlement date you will need to sign some documents. Once everything is ready for signing, we will arrange with you for signing. You can visit us at our offices or we can meet you at a place that is convenient for you. It may even be possible to email you the documents to sign.
The buyer has the right to inspect the house before settlement to ensure that no damage (other than fair wear and tear) has occurred since they inspected the property initially. Usually, the agent organises this and will contact you to discuss getting access to the property for the buyer.
Once we have received notification of the amount to be repaid under your mortgage (if any), we will seek to get your approval of this.
6. Settlement
To do:
Prepare to vacate the property as soon as settlement occurs
Cancel insurance, phone and power/gas (but only after settlement has actually taken place)
On the day of settlement, we will liaise with the other lawyer and when everything is in place, the buyer’s lawyer will pay the settlement money to us. As soon as we have completed settlement, you will be required to hand over the keys and vacate the property. The ownership of the house will be officially transferred to the buyer, so you need to be prepared to leave the property as soon as this happens.
When the settlement occurs is often out of the control of the lawyers as it depends on other parties’ actions and other factors. Unfortunately it is impossible to tell you what time settlement will happen. However, we do try to accommodate people’s circumstances if possible. We will telephone you once the settlement has gone through. Generally, you should leave your keys (and garage door openers etc) with the real estate agent who will pass these to the buyer once they are authorised to do so.
We will ensure that your bank mortgage (if any) is repaid and any leftover balance paid to you in accordance with your instructions. Lawyers’ fees are usually paid by deduction on settlement. We will provide you with draft accounting statements beforehand. We will also notify the Council (and water company) of the change in ownership after settlement. We will email you copies of the relevant documents for your records and provide copies to your accountant if you wish.
You should cancel the house insurance at this point (after settlement is complete) as it is your responsibility to keep the house insured up until settlement, even if settlement is delayed for any reason. You will also need to cancel or transfer your telephone and power/gas accounts.
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.