The property purchase process can be daunting, especially if you haven’t purchased a property before or if it has been many years since your last purchase. It’s often tricky to know when your lawyer needs to be involved, and we’re here to help make that part simple.
When to engage us
Buying at Auction
If you’re interested in a property that is being sold by auction, we recommend you contact us prior to the auction so that we can review the draft agreement, LIM, title and any other important documentation before you bid. This is because if you are successful at the auction, the agreement becomes unconditional, meaning that if, for example, you later find an issue with the LIM, you will not be able to back out of the deal.
Buying by negotiation or tender
If you’ve found a property being sold by negotiation or tender, you can choose to involve us either before you make an offer or after your offer has been accepted. If you’d like us to review the draft agreement, LIM and title beforehand, please contact us once the agent has provided those documents. Our review may also help you decide whether to proceed and what price to put forward.
Alternatively, you can submit your offer first and wait until it is accepted before engaging us. If your offer is accepted, then we can review the LIM and title during the condition periods set out in the agreement. We may be able to review the agreement and other documents as well, depending on whether a solicitor’s approval or due diligence condition has been included.
Why early involvement helps
The benefit of involving us before you submit your offer is that we can ensure the agreement includes the right terms and conditions. Whether you are purchasing by negotiation or tender, it is also important to consider separate conditions for finance, a building report and a toxicology report (drug contamination testing). If you are purchasing by auction, you will need to have your finance approved and complete your due diligence, obtaining a building report and, if necessary, a toxicology report before you bid.
Either way, the sooner you engage us, the sooner we can complete the necessary onboarding and anti-money laundering checks and begin assisting you with your property purchase.
KiwiSaver
If you need to withdraw your KiwiSaver to pay the deposit for your purchase, you will need to let us know as soon as possible. This allows us to help you prepare and submit the application and include the necessary clause in the agreement to ensure those funds will not be released to the vendor until settlement is completed.
If you only need your KiwiSaver funds to pay the balance due on settlement, the timing is less crucial. However, we will still need to help you prepare and submit your application to comply with your KiwiSaver provider’s processing timeframes and ensure the funds are received in time for settlement.
What’s next
If you’re obtaining a bank loan, you will need to work through your loan structure with your mortgage broker or bank. You’ll also need to contact your insurance broker to put insurance in place for the property in time for settlement. While you’re not strictly required to obtain insurance if you’re not obtaining a bank loan, we recommend you do so for your own protection.
When we receive the loan documents from your bank, we will send you a copy along with our review so you can confirm everything is correct. Once confirmed, we will prepare the transfer documents to record you as the new owner of the property on the title. Signing can take place in our office or via video call.
We take care of notifying the relevant Council and water provider of the change in ownership. From here, your role is to arrange insurance and your utilities.
Settlement day
On settlement day, your bank loan is paid into our trust account from your bank. By this time, we should already have received your KiwiSaver funds if they are being applied to the balance required to settle. If you’re paying any additional funds, we will require these to be paid into our trust account as well. Once we’ve received the required undertakings from the vendor’s solicitor, we will pay the funds in one lump sum to complete settlement.
While we can’t guarantee the exact time settlement will take place, we will do everything we can to ensure that we are organised and ready to settle as soon as we are able, and we will keep you updated throughout the day.
Following settlement, we have the pleasure of calling to congratulate you on becoming a homeowner. Shortly after, the agent will contact you so you can collect your keys and move into your new home.
Remember
No two transactions are the same, so engaging us at the beginning of your property purchase process allows us to tailor our advice to your circumstances and help make the experience as smooth as possible.
Whether you’re buying or selling Armstrong Murray’s property team can help ensure your plans are legally sound and clearly understood.
If you’d like us to assist you with your next property purchase, get in touch with our team on enquiries@armstrongmurray.co.nz or 09 489 9102.
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 post.
