The buying process and how it works
NZ Realtors agents have a lot of experience in helping people find a new home or property. Here are some of the steps in the (usual) buying process.
Organise your finance
Before you commence looking for your new home it’s important to find out how much you can afford to borrow. Speak to your bank, financial institution or a mortgage advisor about how much you can borrow and what you are comfortable paying back. Once you know how much money you can spend, stick to your budget and be realistic. Remember to factor things like legal fees, building reports, insurance, moving costs and any furniture or appliance purchases into your home buying budget.
For help with your budget it is worthwhile looking at Sorted or NZ Family Budgeting Services.
Get pre-approved for a home loan
Contact your bank, financial institution or mortgage broker about getting a pre-approval for a home loan. This is when a bank or financial institution agrees, in principle, to lend you a certain amount of money. Your application for pre-approval will be assessed on the strength of your application and ability to meet your home loan commitments now and in the future. It’s important to spend the time to prepare information required to have the best chance or getting your loan approved.
Having pre-approval puts you in a better position to negotiate on price and time, helps speed up the mortgage documentation process and you’ll be able to bid with confidence at auctions.
Get independent legal advice
We recommend you get independent legal advice. Finding the right lawyer is an important part of the buying process and they have the training, experience and knowledge to help you through the buying process.
You could ask friends if they can recommend a good lawyer, look in the Yellow Pages under Lawyers, Barristers or Solicitors or contact the New Zealand Law Society.
Think about what you are looking for in a property. Make a list and prioritise the list into “must haves” and “nice to haves”. Take into consideration your needs for the future. Are you planning a family? Do you intend to have pets? Consider:
- Location and proximity to amenities like transport, schools, hospitals, shops and work
- Price range
- Type of property – house, townhouse, apartment, unit
- Property size – land and home, bedrooms, garage, storage
- Swimming pool
- Built in BBQ.
Everyone has their own way of searching for a property. To broaden your search, drive through an area and surrounding suburbs, refer to local newspapers and the internet. Take the time to inspect a reasonable number of homes to give yourself an understanding of the market value of the properties and area you’re looking at.
Check out the property
Before purchasing a property, it is important for find out as much as possible about the property and the land before you buy it. We recommend that you consider viewing or commissioning specialist reports such as a Title Search, Land Information Memorandum (LIM) and Builders report – prepared by a qualified property inspector.
Offer and acceptance
Before you make an offer, we recommend you involve your lawyer, get sufficient property checks done and, if you are making a conditional offer, decide on the conditions.
There are two types of offers: Conditional: Where one or more special conditions on the purchase, such as subject to finance, LIM and builders report. The sale is not complete until the special conditions have been satisfied within the stated time. Unconditional: No special conditions are being placed on the purchase.
Your offer is accepted once all parties have agreed to the terms and the contact has been signed by all parties. You will need to pay a deposit to the real estate agency who is required to hold the deposit in an audited trust account. The deposit is released to the seller when the agency is legally authorised to do so.
If you are buying at auction you can only make an unconditional offer.
It’s prudent to undertake a final inspection prior to settlement to ensure that the property is still in the same condition it was when you negotiated to purchase the property. You should check that any repairs agreed upon have been made, all the chattels included in the contract are still present and that the previous residents did not cause any damage when moving out of the property.
Your legal and financial representatives will keep you informed and look after the settlement day details for you. Settlement day is the date on which you pay the balance for the property and usually it is the same date the keys are handed over to you and you take possession of the property.