So you would like to buy a property?

Steps to Make It Happen:

You've discovered the ideal home and are ready to make an offer – an exciting yet nerve-wracking experience! How much should you bid? Is it too high or too low? What conditions should be included? Who handles what, and who should you consult for assistance?

Communicate your intentions to the agent, specifically:

1) Your intention to make an offer on the property

-          Request a Sale and Purchase Agreement (obtain the ‘Guide to Purchasing Real Estate’)

2) Engaging a mortgage broker or consulting your bank manager

-          You might already have a broker who arranged your pre-approval

-          The agreed amount allows you to purchase at that price

-          You may need to arrange a First Home Grant as a first-time buyer

-          You might need to organize the release of Kiwisaver for your deposit/loan

(Your broker can assist you with this)

3) Drafting the Sale and Purchase Agreement with the agent:

-    Make an offer: either the full asking price or discuss your bid with the agent for advice

-   Write in your offer and initial where necessary with the agent’s guidance

-    Inquire about applicable protective conditions, such as:

o   Finalizing finance within 10 to 15 working days from the agreement date

o   Arranging the release of Kiwisaver and applying for the First Home Grant

o   Releasing the deposit to the agent's trust account within 10 to 15 days

A trust account is a legally secure entity for safely holding your deposit

-          10 to 15 working days to access the LIM report and Title deed

-          10 to 15 working days to apply for a Building report

o   A Building report is not applicable when purchasing bare land

4) Further terms in the agreement may include:

Allowing your solicitor 5 to 7 working days from the agreement date to review it for approval

GET YOUR SOLICITOR TO APPROVE, AMEND, OR REJECT THE AGREEMENT AND INFORM THE AGENT OF THE OUTCOME

Sale and Purchase Agreements are legal and binding documents prepared by the Auckland District Law Society and the Real Estate Institute of New Zealand, so be sure of your decision to purchase. Your agent will provide a Guide to Sale and Purchase Agreements to help you understand the agreement and your rights.

5) Once your solicitor approves the agreement and you make the offer, or:

The vendor/seller may have already approved your offer price or may have rejected it if it was too low. Then:

Option 1: You could offer more (negotiate) and discuss with the agent, who will present/discuss your counteroffer with the vendor.

Option 2: You could reject the deal based on price, ending the agreement.

However, if both parties reach a final agreement:

a)          You, the purchaser, have 1 to 2 days to pay the deposit to the trust account

b)          Engage a building inspector if it's for a house or building

c)          Inform your mortgage broker and solicitor that the ‘agreement is now in place’

FINAL TIMELINES:

You will have time to deliver the building report

Work toward your settlement date as per your agreement

Begin final processing of your mortgage

When all conditions are met within the allotted times, you or your solicitor will notify the agent that you are unconditional on the agreement, or

You might disagree on one or more conditions, such as the Building report or LIM report; you may want to arrange with the vendor to address these. The vendor has the right to this option within an agreed time limit.

SETTLEMENT:

About 3 to 5 days before settlement, you will have a final opportunity to view your new purchase to ensure everything is as agreed before purchase.

Upon satisfaction, settlement will be arranged, banks and solicitors will finalize finances, and the property title will be transferred to your name on the agreed settlement date.

Your agent will be notified by solicitors and arrange to meet you at the property to hand you the keys to your new home.

Congratulations! Done! Enjoy your new home!

Disclaimer: This is a rough outline for what to expect when entering the process and in no way does it constitute the absolute purchase and sales agreement, as each deal and home sale is always very different. So please finally talk to your preferred sales agent.

Gerald: 0212500622

(Licensed Real estate consultant REAA 2008)