You have found the home you desire. There is now an opportunity to realise your hopes and dreams to begin a new part of your life.

What to do next.

To put in an offer for your new home, you will need to complete the Sale and Purchase Agreement. This will be the standard form which has been drafted and approved by both the New Zealand Law Society and the Real Estate Institute of New Zealand.

The Sale and Purchase Agreement is fairly straight forward, however you should consider a number of matters to ensure your best interests are looked after and that unforeseen problems do not arise.

conditional or unconditional

You will need to decide if your offer will be made conditional on the sale of your existing home, or obtaining finance or some other matter, or whether you can sign the agreement unconditionally.

This will depend purely on your own circumstances.

finance

Although you may have spoken with your lender to confirm financial arrangements for buying your new home, it may be wise to make your offer conditional on your financial arrangements being formally confirmed.

LIM report:

Some offers are made subject to a LIM Report. The LIM Report which is available from the local authority (who make a charge for this), gives information about plumbing, drainage, issued consents and permits, compliance schedules, licences, special site features, swimming pool fence requirements, unsatisfied requisitions and a host of other details about the property.

The LIM report may not give a complete picture, if, for example, the Vendor has done work without telling the local authority.

building inspection

A building inspection clause can be added to a Sale and Purchase Agreement as a condition of Sale. An inspection can provide a checklist against which a building is inspected. It should include structural soundness and any dampness, defects or repairs or alterations, which may not have building permits.

chattels

You will need to note which chattels in the house area being offered as part of the sale price. The Rateable Valuation does not include the chattels. It is usual to include the stove, carpets, curtains, blinds and other fixtures as chattels. However, other items may be included and should be mentioned specifically such as dishwashers, range-hoods etc.

property tenure

In New Zealand there are various ways of holding property. Some of these are:

Fee Simple: The highest title in the land and denotes a title on which there are no restrictions in the manner in which it can be held, kept or transferred or passed on by Will.

Fee Simple is not to be confused with 'Freehold' land which generally refers to a property that does not have a mortgage debt secured against it.

Unit Title: Special consideration should be given if the property is held under a Unit Title, particularly the rules that govern the relationship between the owners and the contributions made to the body corporate.

There may also be 'local' rules that apply in an ad hoc manner, such as booking arrangements for a shared tennis court.

Cross-lease: The terms of a cross-lease need to be considered, such as whether or not there are areas defined around the building for your sole use; whether the outline of the building on the plan co-relates to the actual outline of the dwelling; and details about the driveway.

Leasehold: A property may be leased under varying terms. There are various methods of perpetually renewable leases. Exact provisions in relation to rent reviews need to be carefully considered. Leasehold properties also require the landlord to be involved in the purchase process and consent obtained.

If the prospective property is held by a method other than in 'fee simple', your lawyer will pay particular attention to the tenure of the documents.

ownership considerations

Both you and your lawyer should consider the best method of owning your new property. Simply acquiring it in your own name, or in your own and your partner's name may not be the most appropriate or useful method for your particular circumstances.

signing the sale and purchase agreement

Once you are happy with your conditions on the Sale and Purchase Agreement, it is ready for signing.

The Sale and Purchase Agreement should be signed by all the parties who will be bound by it and whose names will be listed on the Certificate of Title. If you sign as a nominee, you will still be personally bound by the agreement.

settlement date

Finance can be approved within 3 days. Generally most finance clauses allows for 3 to 10 days for completion. Settlement date can be made from 4 to 6 weeks from the conditions being fulfilled or unconditional date.

taking the offer to the vendor

Once you have signed the Sale and Purchase Agreement, it will then be presented to the Vendor.

The Vendor may accept your offer straight away or may come back to you with some additional conditions noted on the Sale and Purchase Agreement. These may include:

• Cash Out Clause: This applies where your offer is conditional and means that if the Vendor receives a better offer before you make your offer unconditional, the Vendor may give you several workings days to make the Sale and Purchase Agreement unconditional before canceling it. The cash out clause is usually 3 to 5 working days.
• Back-Up Agreement: The Vendor may have agreed to take another offer, but is giving you the option if the first offer does not become unconditional by a given date.

The Vendor may alter the price you have offered for the property, change the proposed settlement day or alter some other detail. These changes become a 'counter-offer' and you are not bound to proceed unless you accept the Vendor's new terms.

your offer is accepted - what next?

When your offer is accepted and both parties have signed the Sale and Purchase Agreement and initialed all the changes, you are both bound by its conditions. Any unpaid deposit will be called for. Failure to pay a deposit after three days notice may allow for the Vendor to cancel the contract. A deposit paid to a Real Estate Agent must be held for a minimum of ten days in the Real Estate Agents Trust Account.

From this point, countdown for settlement day begins and any time limits in the Sale and Purchase Agreement begin to run. Make sure your lawyer receives the Sale and Purchase Agreement as soon as possible.

fulfillment of conditions

The Sale and Purchase Agreement provides that a condition is not fulfilled until each party has received confirmation advice in writing. Your lawyer will provide the necessary confirmations for you, but keep in mind the time limits apply strictly.

settlement process

Your lawyer will prepare the transfer of the property into your name and complete the forms to ensure the local authority will get details of the transaction.

The lender will forward their instructions shortly after the loan is approved and the documents will be prepared for signing by your lawyer.

After checking the Vendor' statement of the amount to settle the purchase, including apportionment of rates and other outgoings to the date of settlement, a complete statement of the amount required to settle will be sent to you. This statement takes into account the mortgages provided, your cash input and the deposit already paid.

Your lawyer will comply with all your lender's requirements and arrange for the funds to be available to you on settlement day.

settlement day

After receiving all the funds, your lawyer will arrange for the Vendor's lawyer to be paid, clear title to be given to you and the keys made available. Your will then be entitled to possession, but only after the transfer of funds.

after completion

After the settlement is completed, your lawyer will organise registration of the transfer of the title into your name, and complete the registration of any mortgages required by the lender. The original of the title will be held by the mortgagee (lender) as part of their security and your lawyer will forward you a photocopy showing the property registered in your name.

delayed settlement

If settlement of your prospective property is delayed, your lawyer may suggest a caveat be registered over the property to protect your interest. This will ensure the deposit that has been paid, will be safe.