Buying your first home
Buying your first home is an exciting milestone, but it can also feel like a daunting process. From arranging finance to reviewing contracts and understanding your legal obligations, there are several important steps before you can call a property your own.
While every purchase is different, getting the right advice early can help you avoid unnecessary stress, make informed decisions and give you confidence throughout the process.
Start with your finances
Before you begin attending open homes or making offers, it is worth understanding exactly what you can afford.
Speaking with your bank or a mortgage broker about pre-approval will give you a realistic budget and demonstrate to sellers that you are a genuine buyer. Lenders will consider your income, expenses and ability to meet mortgage repayments, so taking the time to understand your borrowing capacity can save disappointment later.
Having your finances in order also means you can move quickly when you find a property that is right for you.
Get legal advice early
Many first home buyers wait until they have found a property before contacting a lawyer. In reality, seeking legal advice earlier in the process can make all the difference.
Understanding how the buying process works before you are under pressure allows you to make decisions with confidence. Your lawyer can explain the different types of sale processes, review documents as they arise and answer any questions before you commit to a purchase.
Having a lawyer ready to assist also means you can act quickly when opportunities arise, particularly in a competitive market.
Do your due diligence
Once you have found a property you would like to purchase, it is important to investigate it thoroughly before making an unconditional commitment.
Depending on the property, your due diligence may include:
- confirming your lender is happy to finance the purchase
- obtaining a building report
- reviewing the LIM and certificate of title
- checking for easements, covenants or other restrictions
- confirming suitable insurance can be obtained
- ensuring your deposit funds, including any KiwiSaver withdrawal, will be available when required
- agreeing on a settlement date that suits everyone involved.
The timing of these checks will depend on how the property is being sold. If you are buying at auction, most of your due diligence should be completed before you bid because a successful bid will usually result in an unconditional contract.
If you are purchasing by negotiation, your offer can often include conditions that allow you time to complete these investigations before you become legally bound.
Although reports and inspections involve upfront costs, they can help identify issues before settlement and reduce the risk of expensive surprises later.
Review the agreement carefully
The Agreement for Sale and Purchase is a legally binding document, so it is important to understand what you are signing.
Every agreement is different, and the wording of conditions can have a significant impact on your rights and obligations. Before signing, your lawyer can review the agreement, explain any clauses you are unsure about and ensure appropriate conditions are included to protect your interests.
Taking the time to understand the agreement before you sign can provide valuable peace of mind and help avoid disputes later.
How we can help
Buying your first home is a significant step, and we can guide you through every stage from agreement right through to settlement. If you’re buying a home, get in touch with our property team for advice on your next steps.
This article is brief and general in nature. You should not treat it as legal advice and should seek professional advice before taking any action in relation to the matters dealt with in this post. Armstrong Murray accepts no liability for losses suffered by any person or organisation who may rely directly or indirectly on this article.
