Buying Property – An Overview of the Process

Buying your first home is a big investment for many and can be complex. Below is an overview of the process:

  • Pre-offer (initial considerations)

    1

    1. Eligibility to purchase property

    • To purchase property in New Zealand everyone needs to complete the Residential Land Statement and meet the New Zealand Resident requirement set out in the form.

    2. Organise finance

    • Work out your budget for the house. Talk to your bank or mortgage broker.
    • How will you finance the purchase? Will you use a combination of cash, bank loan and KiwiSaver?

    3. Initiate preliminary discussions with experts

    • These include your lawyer, insurer, building inspector/structural engineer.
    • Understand their roles and when you will need their assistance.

    4. Find the property

    5. Research the property

    • Understand how the property is being sold as this will determine the level of research you need to carry out.
    • Properties can be sold via auction, tender, advertised price, deadline sale or negotiation.

    6. How will you purchase the property?

    • Are you buying it in your personal name, with your partner/spouse/parents, through a company or a trust?

  • Offer (conditional or unconditional)

    2

    1. We recommend that you get in contact with your lawyer prior to putting in an offer. Your lawyer can help draft or review the contract (if your agent is drafting).

    2. If the property is being sold at auction, you will need to complete all your due diligence and confirm your finance and insurance before you bid. If you win at auction, you are committed to purchase the property. Your lawyer can help you review the property file prior to the auction.

    3. If the property is being sold by tender you can submit a conditional written offer to the agent before a specified date.

    4. If the property is being sold by advertised price, deadline sale or negotiation you will have more flexibility as you can also put in a conditional offer.

    5. Key considerations when putting together the offer include:

    • Purchasing entity
    • Purchase price
    • Settlement date
    • Conditions to include and how long you will need to approve the conditions

    6. Examples of conditions you can incorporate into your contract include making it subject to approval of finance, insurance, due diligence investigation (i.e. review of title, LIM report, EQC report, building report, etc)

  • Offer accepted

    3

    1. If the vendor accepts your offer you are now bound by the terms of the contract.

    2. If the contract is unconditional, your lawyer will prepare all the necessary documentation required for settlement.

    3. If your conditional offer is accepted by the vendor you will work through the conditions together with your lawyer and other professionals.

  • Prior to settlement

    4

    1. Now that your contract is unconditional, you will need to meet with your lawyer to sign documents in preparation for settlement. This includes signing authority and instructions forms to allow your lawyer to transfer the title, land tax statements, residential land statement, financing/bank loan documents, Deed of Assignment of EQC claims.

    2. Ensure that all financing arrangements are in place and ready for draw down on settlement day.

    3. Ensure that full insurance is in place for the property prior to settlement.

    4. Arrange a pre-settlement inspection. You have until 5pm on the last working day before settlement to raise any issues. This allows you the opportunity to check the property and chattels and ensure there are in the same condition as when you signed the contract and that the buyer has met any conditions listed in the contract.

  • Settlement

    5

    1. Once your lawyer has received all the funds required to settle and the settlement undertaking from the vendor’s lawyer, your lawyer will transfer the settlement funds to the vendor’s lawyer.

    2. Upon receipt of the settlement funds, the vendor’s lawyer will release the documents to your lawyer to allow your lawyer to transfer ownership to you and record your bank as mortgagee on the title (if you are borrowing funds).

    3. Your lawyer will also inform you where you can collect the key from (usually from the agent).

  • Post settlement

    6

    1. Your lawyer will send you a copy of the new title with your name(s) recorded as the new owner. If you have borrowed funds, the bank’s interest will also be recorded on the title.

    2. Local council will also be notified of the change in ownership.

Useful links

Our experienced Property team are able to answer any questions that you have and can assist you through the process of buying property. Contact us today for more information.

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The information contained in this outline is of a general nature, should only be used as a guide and does not amount to legal advice. It should not be used or relied upon as a substitute for detailed advice or as a basis for formulating decisions. Special considerations apply to individual fact situations. Before acting, clients should consult their Parry Field Lawyer.

Christchurch CBD

PHONE: +64 3 348 8480

PHYSICAL ADDRESS:
Level 1, 60 Cashel Street
Christchurch 8013, New Zealand

POSTAL ADDRESS:
PO Box 744
Christchurch, 8140, New Zealand

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PHONE: +64 3 348 8480

PHYSICAL ADDRESS:
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Christchurch 8041, New Zealand

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Christchurch, 8440, New Zealand

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PHONE: +64 3 348 8480

PHYSICAL ADDRESS:
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Rolleston, 7614, New Zealand

POSTAL ADDRESS:
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Christchurch, 8440, New Zealand

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PHONE: +64 3 755 8673

PHYSICAL ADDRESS:
127 – 137 Revell Street,
Hokitika 7810, New Zealand

POSTAL ADDRESS:
PO Box 44,
Hokitika 7842, New Zealand

Auckland

PHONE: +64 9 930 4340

PHYSICAL ADDRESS:
Level 7, 50 Albert Street
Auckland, 1010

POSTAL ADDRESS:
PO Box 8020, Riccarton,
Christchurch, 8440, New Zealand

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