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  • Getting a lawyer
  • Getting a building inspector
  • Making an offer
  • Going to auction
  • Auction Process
  • Private sale
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03 GETTING A LAWYER
Getting a lawyer

03 GETTING A BUILDING INSPECTOR
Getting a building inspector

03 MAKING AN OFFER
Making an offer

03 GOING TO AUCTION
Going to auction

03 The AUCTION PROCESS
Auction Process

03 PRIVATE SALE
Private sale

Getting a lawyer

There are two important people you’ll need to help you buy your home: a lawyer and a building inspector. There are lawyers that specialise in the process of buying and selling houses (called conveyancing). They offer better value than other types of legal firms so they’re a good place to start.

Your lawyer will:

  • Help you liaise with us as your bank about establishing your mortgage
  • Help explain any fine print in the Sale and Purchase Agreement
  • Offer you legal advice on potential issues on anything from property boundaries to body corporate detail
  • Negotiate with the seller’s lawyer on your behalf, and ensure any conditions you’ve specified are met
  • Handle the simple practicalities such as the handover of keys

If you are wanting to form a family trust to hold your home, your lawyer may also be able to handle this work. Lawyers usually cost between $1,000 and $2,000 from start to finish, but there are a lot of variables so make sure you discuss their charges up front. 

Link

Find a lawyer

Find an accredited Property Lawyer from the New Zealand Law Society.

There are two important people you’ll need to help you buy your home: a lawyer and a building inspector. There are lawyers that specialise in the process of buying and selling houses (called conveyancing). They offer better value than other types of legal firms so they’re a good place to start.

Your lawyer will:

  • Help you liaise with us as your bank about establishing your mortgage
  • Help explain any fine print in the Sale and Purchase Agreement
  • Offer you legal advice on potential issues on anything from property boundaries to body corporate detail
  • Negotiate with the seller’s lawyer on your behalf, and ensure any conditions you’ve specified are met
  • Handle the simple practicalities such as the handover of keys

If you are wanting to form a family trust to hold your home, your lawyer may also be able to handle this work. Lawyers usually cost between $1,000 and $2,000 from start to finish, but there are a lot of variables so make sure you discuss their charges up front. 

Getting a building inspector

01 Getting a building inspector

A building inspector will check out your property before you buy it to ensure that you fully understand the condition the property is in. He or she goes over the property inside and out and makes you aware of any issues that you need to know about. 

Your building inspector will provide a written report on the state of the property that may or may not contain photographs. The quality of reports can vary, but you can always ask to see some sample reports before hiring someone.

When you have chosen an inspector try and accompany them to the inspection. You’ll discover a lot in person that may not come out on the report. If that isn’t possible, follow up the report with a phone call to talk things through in more detail.

A good building inspector can also recommend other specialists if there are any issues regarding the property that you need more specific advice on. 

01 Getting a building inspector

A building inspector will check out your property before you buy it to ensure that you fully understand the condition the property is in. He or she goes over the property inside and out and makes you aware of any issues that you need to know about. 

Your building inspector will provide a written report on the state of the property that may or may not contain photographs. The quality of reports can vary, but you can always ask to see some sample reports before hiring someone.

When you have chosen an inspector try and accompany them to the inspection. You’ll discover a lot in person that may not come out on the report. If that isn’t possible, follow up the report with a phone call to talk things through in more detail.

A good building inspector can also recommend other specialists if there are any issues regarding the property that you need more specific advice on. 

Making an offer

Many homes for sale have a price advertised with them, giving you an idea of what the vendor is looking for. With the price you may see ‘offers above’ if the seller wants more than the price listed, or ONO meaning ‘or nearest offer’ if there is some flexibility in the price, or ‘firm’ if the price isn’t negotiable downwards.   

Many first home buyers will make an offer on a home with an advertised price. Naturally as the buyer you don’t want to pay any more than you have to, so you may make an offer that gets turned down. You then might make another offer (and another), or move on. You have two options when making an offer on a property: conditional, and unconditional. 

Conditional offer

This is where you have specified conditions that need to be met before you will complete the purchase of the property. Conditions can be about the property itself, such as waiting on a favourable building inspection before proceeding, or they can relate to other issues about your purchase, such as securing the finance to buy. As a first home buyer we strongly recommend that you have conditional approval first. Conditions always have a timeframe attached, so the seller can eventually move forward one way or another. 

Unconditional offer

An unconditional offer is one where there are no conditions attached. If you make an unconditional offer then you are legally bound to complete the purchase. Before presenting an unconditional offer, you and your lawyer should have done all the due diligence required, such as LIM reports, builders inspections, and all the other research you should do before commencing such a big financial commitment. Your offer is valid until the vendor signs, or until you cancel. If the vendor hasn’t signed the agreement, then you can cancel either verbally or in writing. At BNZ we recommend getting your lawyer to cancel verbally, and then in writing. 

Conditional offer

This is where you have specified conditions that need to be met before you will complete the purchase of the property. Conditions can be about the property itself, such as waiting on a favourable building inspection before proceeding, or they can relate to other issues about your purchase, such as securing the finance to buy. As a first home buyer we strongly recommend that you have conditional approval first. Conditions always have a timeframe attached, so the seller can eventually move forward one way or another. 

Unconditional offer

An unconditional offer is one where there are no conditions attached. If you make an unconditional offer then you are legally bound to complete the purchase. Before presenting an unconditional offer, you and your lawyer should have done all the due diligence required, such as LIM reports, builders inspections, and all the other research you should do before commencing such a big financial commitment. Your offer is valid until the vendor signs, or until you cancel. If the vendor hasn’t signed the agreement, then you can cancel either verbally or in writing. At BNZ we recommend getting your lawyer to cancel verbally, and then in writing. 

Once the seller has signed your offer, it becomes a binding agreement, and you are required by law to complete it. 

02 DEPOSIT
Deposit

Once the seller has accepted your offer, and you’ve both signed the agreement, you need to pay your deposit. The deposit is usually paid to the agent, or to your lawyer, and is usually held for ten working days. It’s important you have your deposit ready to go. Sometimes settlement will happen inside those ten working days, if either party wants to speed up the process and the other is happy to do so. 

02 DEPOSIT
Deposit

Once the seller has accepted your offer, and you’ve both signed the agreement, you need to pay your deposit. The deposit is usually paid to the agent, or to your lawyer, and is usually held for ten working days. It’s important you have your deposit ready to go. Sometimes settlement will happen inside those ten working days, if either party wants to speed up the process and the other is happy to do so. 

Pre settlement inspection

During the ten days that the deposit is held by your lawyer, you are entitled to view the property one last time to make sure it’s in the same condition as when you bought it. This is your last chance to check all the chattels that you bought are in place and that they’re working, and that nothing has been damaged or removed since the sale. If something has gone wrong, or isn’t what you agreed to, then this is your timeframe to lodge a claim for remedy or compensation. Say for example you paid for the fridge, but the fridge is no longer there, or has been replaced by an older, inferior fridge, then you would lodge a claim. 

You can only claim if something is different from the time after you signed the agreement. If the fridge was gone when you signed, then you can’t claim for it now. If you’re happy that everything’s in order, then you will instruct your lawyer and everything moves forward to settlement day. 

03 PRE SETTLEMENT INSPECTION
Pre settlement inspection

During the ten days that the deposit is held by your lawyer, you are entitled to view the property one last time to make sure it’s in the same condition as when you bought it. This is your last chance to check all the chattels that you bought are in place and that they’re working, and that nothing has been damaged or removed since the sale. If something has gone wrong, or isn’t what you agreed to, then this is your timeframe to lodge a claim for remedy or compensation. Say for example you paid for the fridge, but the fridge is no longer there, or has been replaced by an older, inferior fridge, then you would lodge a claim. 

You can only claim if something is different from the time after you signed the agreement. If the fridge was gone when you signed, then you can’t claim for it now. If you’re happy that everything’s in order, then you will instruct your lawyer and everything moves forward to settlement day. 

03 PRE SETTLEMENT INSPECTION
04 Going to auction 2

Going to auction

Vendors often like to sell at auction because the competitive nature of the process helps achieve a higher price, or at least one that accurately reflects of the market. 

As a first time buyer, you need to be aware of the emotions you feel in an auction environment. The good thing to remember though is that they’re open to the public, so you can experience the theatre of the auction and the auctioneer without having to buy anything at all. Going along to a few auctions just to watch is a great way to learn all about them.

Here are nine of the basics to know about auctions:

THEY’RE UNCONDITIONAL

You can’t bid subject to finance or a building inspection, everything has to be sorted out in advance. 

SOME THINGS CAN BE VARIED

If you require a settlement date that is different from the one on the auction agreement, you can request a variation from the vendor that will just apply to you. 

THERE’S A 10% DEPOSIT

If you are the successful bidder you will need to make a 10% deposit there and then, unless a different percentage has been pre-agreed before the auction. 

THEY’RE UNCONDITIONAL

You can’t bid subject to finance or a building inspection, everything has to be sorted out in advance. 

SOME THINGS CAN BE VARIED

If you require a settlement date that is different from the one on the auction agreement, you can request a variation from the vendor that will just apply to you. 

THERE’S A 10% DEPOSIT

If you are the successful bidder you will need to make a 10% deposit there and then, unless a different percentage has been pre-agreed before the auction. 

THE VENDOR SETS A RESERVE PRICE

The house will not be sold until the bidding has passed the reserve price. When it passes the reserve the auctioneer will announce that it is “On the market”. 

AUCTIONS ARE OFTEN “PASSED-IN”

If the bidding doesn’t reach the reserve price the auctioneer will pass it in. This means the auction is over and the highest bidder has the first right of negotiation.

THE AUCTIONEER MAY MAKE “DUMMY BIDS”

If the bidding falters and loses momentum the auctioneer may make a bid on behalf of the vendor to raise the price. This can only be done when the bidding is below the reserve price and it must be clearly announced as a vendor bid by the auctioneer.

THE VENDOR SETS A RESERVE PRICE

The house will not be sold until the bidding has passed the reserve price. When it passes the reserve the auctioneer will announce that it is “On the market”. 

AUCTIONS ARE OFTEN “PASSED-IN”

If the bidding doesn’t reach the reserve price the auctioneer will pass it in. This means the auction is over and the highest bidder has the first right of negotiation.

THE AUCTIONEER MAY MAKE “DUMMY BIDS”

If the bidding falters and loses momentum the auctioneer may make a bid on behalf of the vendor to raise the price. This can only be done when the bidding is below the reserve price and it must be clearly announced as a vendor bid by the auctioneer.

WATCH OUT FOR “TRIAL CLOSES”

To entice new bidders who are holding back and to stimulate competition, the auctioneer will often give the very strong impression that the property is about to be sold by saying, “Going once, going twice, for the third and final time ….” However, this is only a device to uncover further bidders. Unless the property has been announced as “Now selling” it will not be sold. 

KNOW THE RULES ABOUT PRE-AUCTION OFFERS

The vendor may accept an offer prior to the auction date, but that does not mean the buyer has secured the property. A pre-auction offer – which must be unconditional – simply brings the auction forward to three working days from acceptance. Other interested buyers will be contacted and invited to attend. The accepted offer will become the opening bid and might be bettered by other buyers.

DON’T BE INTIMIDATED

The auction room can be a daunting environment for buyers unfamiliar with its protocols and they are often cajoled into increasing their bid by agents representing the auctioneer. Remember that you have the right to say, “No.” If your bid is highest it will be passed-in and you can negotiate away from the glare of the crowd.

WATCH OUT FOR “TRIAL CLOSES”

To entice new bidders who are holding back and to stimulate competition, the auctioneer will often give the very strong impression that the property is about to be sold by saying, “Going once, going twice, for the third and final time ….” However, this is only a device to uncover further bidders. Unless the property has been announced as “Now selling” it will not be sold. 

KNOW THE RULES ABOUT PRE-AUCTION OFFERS

The vendor may accept an offer prior to the auction date, but that does not mean the buyer has secured the property. A pre-auction offer – which must be unconditional – simply brings the auction forward to three working days from acceptance. Other interested buyers will be contacted and invited to attend. The accepted offer will become the opening bid and might be bettered by other buyers.

DON’T BE INTIMIDATED

The auction room can be a daunting environment for buyers unfamiliar with its protocols and they are often cajoled into increasing their bid by agents representing the auctioneer. Remember that you have the right to say, “No.” If your bid is highest it will be passed-in and you can negotiate away from the glare of the crowd.

auction process 1

Private Sale

A private sale is where the vendor is handling the sale of their house themselves, without the involvement of a real estate agent. This can save them thousands of dollars in eventual commission, and gives them greater control of the process.

For you as a buyer it can be a good thing if the seller is selling privately. It means you and your lawyer can deal with them directly, providing the opportunity to form more of a relationship with the seller than you would otherwise have. On the downside, if the seller has no experience in selling property, there’s a chance they may be disorganised or unprofessional.

06 Private sale

A private sale is where the vendor is handling the sale of their house themselves, without the involvement of a real estate agent. This can save them thousands of dollars in eventual commission, and gives them greater control of the process.

For you as a buyer it can be a good thing if the seller is selling privately. It means you and your lawyer can deal with them directly, providing the opportunity to form more of a relationship with the seller than you would otherwise have. On the downside, if the seller has no experience in selling property, there’s a chance they may be disorganised or unprofessional.

06 Private sale

Be prepared with this handy checklist

There are lots of things to do, and this checklist will keep you on top of them all.

Your deposit

Home loan application

Finding a home

Buying a home

Settling

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