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Our Tips if You’re Buying a Home

Updated: Apr 28




Congratulations on taking the exciting step towards purchasing your first home! Here are a few tips to help you navigate the home buying process smoothly.


1. Consider who is purchasing the home: 

Decide whether it will be best for you to purchase the property in your personal name or whether a company, or a Trust should be the purchasing entity. Each option has its own implications, so it's important to seek advice from a legal or financial advisor.


Our Tip: Ensure that the sale and purchase agreement includes an option to nominate the purchasing entity if you are unsure of the best option at the point of signing.


2. Get Your Finance Sorted:

We always recommend having a finance condition in the sale and purchase agreement. Having a general pre-approval for a mortgage may not be sufficient. You need to have specific approval from your lender for the property you intend to purchase.

 

Our Tip: Start the mortgage application process early and provide all necessary documentation to expedite approval.


3. Gifts from family members:

If you're receiving financial assistance or gifts from family members to help with the purchase, be aware that these funds usually cannot be considered loans by the lender.


Our Tip: Take legal advice on this issue whether you are the borrower or the lender. You will need to ensure that any financial gifts are clearly documented and disclosed to your lender.


4. Checking the Home is Sound:

We always recommend obtaining a building report from a qualified building inspector. This report will highlight any structural issues, defects, or maintenance concerns with the property. It's an essential step in ensuring that you're aware of the condition of the property before making a purchase commitment.


Our Tip: The vendor may provide you with a builders report they have obtained. It can be tempting to rely on this but because the report was not commissioned by you it is unlikely you will have any legal recourse against the report writer if things go wrong. Speak with your lawyer if you are thinking of relying on a report provided by the vendor.


5. LIM report:

Obtain a Land Information Memorandum (LIM) from the local council to check for any outstanding consents, building permits, or other relevant information. However, bear in mind that a LIM report only shows what is on the council's file. For example, the Council may not be aware of further unconsented work undertaken after the property was last checked.


Our Tip: It's also advisable to have a builder inspect the property to ensure that the LIM accurately reflects the actual situation.


6. Check the title: 

Your lawyer can review the property's title thoroughly to identify any potential issues, restrictions, easements, encumbrances or obligations associated with the property. An encumbrance is anything that limits or restricts the full use or transfer of a property, whether it's a mortgage, easement, restrictive covenant, lien, or encroachment. When buying a property, it's essential to be aware of any encumbrances that may exist and understand how they might affect your rights and obligations as a property owner.


7. KiwiSaver:

If you're a KiwiSaver member, consider using your KiwiSaver funds towards your first home purchase. Ensure that you understand the timing requirements to withdraw funds for the initial deposit or settlement payment on the possession date. Seek advice from your KiwiSaver provider and lawyer to ensure a smooth withdrawal process with the funds being available on time.


Our Tip: You should also check whether you are eligible for further financial assistance towards your purchase via the government’s First Home Grant.


8. Contract conditions: 

Always consider whether you need to include specific conditions in the purchase contract to protect your interests. For example, you may wish to include a condition for the property to be professionally cleaned before settlement to ensure it's in a satisfactory condition.


9. Lawyer check:

Finally, it always a good idea to have a lawyer run their eye over your sale and purchase agreement before you sign it. We have seen too many people try to cut costs by not doing this only to then incur greater costs sorting out a mess that could have been avoided had they had legal advice before they signed the contract. Remember, it is always easier to negotiate any necessary changes to a draft contract, rather than on a contract that has already been signed!

 

Follow these steps and seek professional advice as needed to successfully navigate your first home purchase. Good luck on finding your new home!


If you would like to have assistance as you buy your home, contact us on 0800 NAVIGATE or book a consultation here.

 

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