If you have never bought a property before, it can be an intimidating prospect. We have broken down this process below and highlighted some things you may want to keep an eye out for along the way. The process can be split into about 9 general stages (order may vary slightly). 1. Finding a house You might seek out house through a real estate agency or by using a website such as TradeMe and then dealing with the homeowner (Vendor) yourself. 2. Get a lawyer You will need to have a lawyer or conveyancing practitioner acting for you in order to complete the purchase. They will be able to advise you of each step and aid you with the documents required along the way. 3. Arranging finance You will need to be completely satisfied that you will have sufficient finance available to you prior to making a sale and purchase agreement (“SPA”) unconditional. Ideally, you can do a lot of the ground work for your finance before you even find a house to buy. If you are getting a loan you will need confirmation from your bank that your loan application has been approved, which you can generally get while you house hunt. You can also complete your initial Kiwisaver forms to start the process of receiving your Kiwisaver first home withdrawal and home start grants before you sign. These forms can be downloaded online. 4. Receiving the SPA Once you have decided on a house and want to make an offer, the SPA is prepared for signing by you. Generally the agent will prepare a SPA if you are dealing with an agent. If not, you should have your lawyer prepare it. Either way, we strongly suggest that prior to signing a SPA you send a copy to your lawyer to review. If you cannot arrange for your lawyer to review it prior to signing, we suggest at least asking your lawyer to provide a suitable clause to include in the SPA to allow your lawyer time to review all aspects of the SPA after you have signed and during the conditional period. This is discussed further in paragraph 5. Many buyers can feel pressured to sign a SPA straight away to ensure they don’t lose out on a purchase. However, we often receive SPAs already signed and discover that without advice, the buyers are locked into terms and conditions that are entirely unfavourable for them. All information in this newsletter is to the best of the authors’ 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 this newsletter. It is recommended that clients should consult a senior representative of the firm before acting upon this information. Nov 2018 – Jan 2019 Page 2 of 4 www.smlaw.co.nz © 2018 5. Conditional Period If your SPA has no conditions included when you sign it, then it is unconditional upon signing. Once the SPA is unconditional, it generally cannot be cancelled. If your Agreement is “conditional” you will have a specified amount of time to arrange your finance and to perform the recorded investigations into the property such as a building report, LIM report, methamphetamine testing. By the end of the specified time period for each condition, your lawyer will need to advise the vendor’s lawyer (on your behalf) that the relevant condition is or is not satisfied. If you are relying on a bank loan, your bank will need to have given unconditional loan approval for this particular property for you to safely confirm the finance condition satisfied. Once both parties have satisfied all conditions inserted for their benefit, the agreement will be declared unconditional. 6. Deposit You will normally be required to pay a deposit – either upon the agreement being signed or when it is declared unconditional. If you do not pay the deposit, the Vendor can provide three working days’ notice of requiring payment. If it is still unpaid, and sufficient notice has been issued to you by the vendor, the vendor is entitled to cancel the agreement. 7. Settlement preparation Once unconditional, your lawyer will begin preparing the relevant documents for you to sign prior to the settlement date and will liaise with your Kiwisaver (if applicable) and lending parties to prepare for settlement. You will also need to arrange insurance. 8. Pre-inspection Up to one day prior to the settlement date of the property, you are entitled to arrange with the agent or privately, a preinspection of the property. If, as a result of your pre-purchase inspection, you identify damage arising since the agreement, your lawyer can, prior to settlement, raise the issues with the Vendor to negotiate to have these issues remedied, the settlement price reduced or both. 9. Settlement day On the settlement day your lawyer will complete the transfer of the property to you once all the funds have been received and paid out to the vendor. The lawyers will then advise the agent or vendor that the house keys can now be released so you can move in. The key to buying any home is being prepared. Ask for help. Talk to your lawyer early, and ensure you have your required IDs and finance ready to go.