Buying a property is the biggest investment that most people make in their lifetime.

There are so many expenses to take into consideration. There’s the LIM report, the Builders report, Loan application fees, property rates, moving costs, insurance connection fees, valuation fees, cleaning costs and of course the conveyancing fees.

We know that this is both a stressful time and a time of excitement.

Buying a property is the biggest investment that most people make in their lifetime./ SMLaw residential property lawyers/property lawyers auckland/ property conveyancing

Aside from checking out “asking prices” online it’s a good idea to visit as many open homes as you can – property which is likely to be in your general price range and target suburb – as this should help you get a good feel for……….. “what can I get for my money”.

Once you have found a property you would like to “put an offer on” the real estate salesperson marketing the property will guide you through the process of putting together your offer and will prepare an “Agreement for Sale and Purchase” which, once eventually signed by you ( preferably after you have obtained advice your lawyer) will be presented by the salesperson to the Vendor as your “offer to purchase

Some things to consider:-

What are you willing to pay for the property?

Do you have cash available (in your bank account) to pay a deposit (maybe 5% to 10% of the purchase price)

what do you need to be 100% certain about before  becoming legally committed to proceed with the purchase (i.e. what conditions should your offer be subject to) for example:

Your bank’s approval of a loan to enable you to buy this particular property

LIM report  ( ie a Land Information Memorandum) (does the property meet all the local Council requirements /is the zoning OK / are there proposed changes of relevance?)

Builders report – is it structurally sound? Is it a leaky building?

Meth report – is there contamination?

Valuation – am I paying too much?

Whilst the real estate salesperson will be helpful in preparing your offer  – do keep in mind that person is primarily working for and being paid by the Vendor – so our advice to you as the purchaser is…… Check with your lawyer before you sign

This is so easy and inexpensive to do – but a consequence of not having your lawyer check the document before you sign can be you later discovering that you have made a ghastly and very expensive mistake!

Simply have the real estate salesperson email to your lawyer a copy of your proposed “offer” for your lawyer to check on your behalf to make sure that your offer includes all of the words necessary to fully protect your interests!   That’s what your lawyer will do for you- and that will give you confidence and peace of mind if your purchase proceeds.

Once your lawyer has checked the offer and made any necessary changes, it will be safe for you to sign the offer and have the salesperson present your offer to the Vendor.

Hopefully, your offer will be accepted – however, don’t be surprised if the Vendor considers your offer too low and the salesperson comes back to you with a “counteroffer” at a higher price. If that counter offered price is more than you are willing or able to pay don’t be afraid to reject that and have the salesperson go back to the Vendor with a further counter offer by you – perhaps slightly more than your original offer but less than what the Vendor as counter offered.

This process could go on for several days before negotiations either “fall apart” or – hopefully! the agreement has finally reached between you and the Vendor and you accordingly have a signed Agreement for Sale & Purchase.  At this point, you have a legal contract to purchase the property at a certain price so long as your conditions are satisfied by certain specified dates. This is known as a Conditional Agreement

At this point, the real estate salesperson sends one copy of the conditional agreement to your lawyer and one copy to the vendor’s lawyer. Your lawyer will at this point “open a file” for your transaction and get on with the legal work.

One of the 1st things your lawyer does is obtain a “search” of the title to the property so it can be checked to make sure it’s all OK from a legal point of view. You will receive a report from your lawyer  (generally by email) with any comments that need to be made about the property’s title. Your lawyer needs to make sure the title is okay. There are words included in the “fine print” of the Agreement for Sale and Purchase which give you protection in the unlikely event of there being a problem with the title.

CONDITIONS TO BE SATISFIED

Aside from your lawyer checking the title, steps will need to be taken promptly to work towards having the conditions in your agreement satisfied. You will need to give your bank a copy of your purchase agreement  so the bank can approve your loan for that particular property. A LIM report will need to be ordered from the local Council and your builders report and Meth contamination report will both need to be ordered. All three will need to be paid for by you. There will be strict time limits within which these reports need to be obtained so ( subject to discussions with your lawyer) you will need to get on to ordering these reports straight away.

“GOING UNCONDITIONAL”

This is where it starts getting really exciting!

Once your lawyer has “okayed” the title, your bank has approved your loan for the property, the LIM report has turned out to be fine, the building inspector and meths contamination inspector have each given the property a “clean bill of health” and any other conditions have been satisfied then your lawyer can confirm to the vendors lawyer that the contract is “unconditional”.

You now know that you have purchased your new home!………………… and will be moving in on the possession date ( often called the “settlement date”) which is typically now only 2 weeks or so away.

BETWEEN “UNCONDITIONAL” AND SETTLEMENT

Your lawyer will be swinging back into action at this stage – doing all the background preparatory work to enable the title to the property to be transferred to you at settlement. There will be some paperwork for you to sign for this to be able to happen. There will also be bank loan & mortgage security documentation to be prepared by your lawyer once your bank has sent its instructions to your lawyer. It will also be necessary for you to arrange insurance cover (acceptable for your bank) for the property – the insurance cover needs to be in place from and including the possession/settlement date. The title transfer documents and bank loan/mortgage security documents will need to be signed by you as purchaser and you will need at that stage to produce “proof of identity” in the form of current government issued photo ID such as drivers licence or passport.

When you sign all the transfer and bank documents your lawyer will explain the key points of the documents to you and answer any questions you might have.

PRE-SETTLEMENT INSPECTION

The “fine print” of the Agreement for Sale and Purchase you had signed after your lawyer had okayed it includes a provision giving you the right to inspect the property on one occasion prior to settlement to make sure that in the intervening period no damage has been done to the property and to ensure that the property and all chattels included in the sale are in the same condition as they were at the date of your signing of the contract. The real estate salesperson will accompany you on that inspection and you should immediately notify your lawyer of the outcome of your inspection.

SETTLEMENT/POSSESSION

This is the day on which your lawyer “completes settlement” with the vendor’s lawyer so that you can “take possession” i.e. move in!

Your lawyer receives your bank loan advance, receives the rest of your cash contribution to the purchase price, transfers to the vendors lawyer the correct sum of money  so the Vendor is paid in full, electronically transfers the certificate of title into your name, registers your bank’s mortgage against the title and, once all that is done emails you a copy of the certificate of title showing you as the proud new owner!    The seller’s lawyer notifies “Quotable Value” and the local authority of the change of ownership so future rates demands are correctly addressed to you as the new owner.

Contrary to the suggestions of some ill-informed persons, the service your lawyer provides in taking your conditional purchase contract through to completion of settlement is certainly not “just form filling” – there is plenty to be done by your lawyer to make sure your interests are protected throughout the conveyancing process.

You are therefore well advised to deal with a long-standing reputable law firm with well-trained and highly experienced qualified professionals who communicate with you clearly in “plain – simple to understand English ”   to look after your conveyancing transaction.  For you, as the purchaser, there is a lot at stake !

Nothing can be more frustrating than having to deal with people that do not get you.

We do and we will be here every step of the way of your journey to home ownership.

Talk to us – we will help you through the buying process  step by step.   Give us a call 09 267 2700 or contact us.