Understanding the Buying Process
Going to contract
When you are ready to write up a contract, the next step is to decide on the price you wish to offer the seller and under what conditions you wish to make the offer. Common conditions of sale are: subject to finance, a builder's report, sale of another property, solicitor’s approval of the contract or specialist inspection or approval.
The seller can accept your offer, reject it or counter sign it. Counter signing usually occurs when the seller is not satisfied with the price offered and/or conditions included and subsequently alters them. The contract will be brought back to you for your consideration. If you accept, you initial the seller’s alteration and the property is under offer to you subject to any conditions that the contract may contain. Alternatively you also have the right to counter sign. Your sales consultant will continue negotiations between you and the seller until you are both in agreement.
The dangers of offering too low
Once they find the property they wish to purchase many buyers are tempted to “start low” with their offer.
We understand, but would not be giving you complete service if we did not warn you of what can happen.
1.The seller could feel insulted, and become difficult to negotiate with from then on.
2.The seller may think you are a bargain hunter “having a go” without serious intention to buy and dismiss your offer altogether.
If you are serious about purchasing the property it is wise to make a genuine offer that reflects your serious intentions and appreciation of the true value of the seller’s home.
Common conditions of sale
Along with the standard terms of the contract both buyers and sellers are able to insert further terms and conditions of sale. When writing in any special condition the key parts are who is going to do it; what are they going to do; when are they going to do it by; what standards will apply; what happens if it is not satisfied and who can waive it.
Once an inserted condition has been satisfied notice will be provided to the other party usually by the solicitors involved.
A condition can be either satisfied or waived. If you have inserted a condition but it has not been met by the required date you can choose to waive that condition. If the condition is neither satisfied nor waived then the agreement will be terminated and any deposit paid by you shall be immediately refunded.
Some common conditions of sale are:
Conditional on sale of purchaser’s property
Conditional on sale of purchaser’s property becoming unconditional
Inserting these clauses allows you to sell your property before purchasing. Use the appropriate clause to allow you time to sell your property or for an existing contract of sale to become unconditional in all respects.
Conditional upon Finance
Conditional upon obtaining Solicitor’s Approval of the Contract
Conditional upon obtaining a Builder’s Report
Each of these conditions should be clearly worded and the dates for confirmation made clear.
Paying the deposit
Once all parties have signed the contract you will be asked to pay a deposit. This usually equates to 10% of the purchase price.
We can refer you to Mortgage Express who can assist you with this.
Property purchase costs
Financial fees vary greatly, depending on such matters as what percentage of the property value that you will be borrowing, the amount of the loan, the amount of the purchase and which bank you are borrowing funds from. If you speak to your local Mortgage Express representative you can quickly ascertain approximate costs for your particular circumstances.
Possible expenses you may incur are:
Bank fees which may include:
Lender application fees, valuation fees, legal and settlement fees
Lender monthly account keeping fees (if applicable)
Lender “Professional Package” annual fees (if applicable)
Lender’s Mortgage Insurance (if applicable)
Lender retention account fees (if applicable)
Title transfer, Mortgage registration fees
Registration of mortgage discharge (refunded by seller at settlement)
Solicitor’s charges may include legal searches (please consult your solicitor)
Stamp Duty on Purchase
Home protection insurance
Miscellaneous costs (Building / pest inspections, rates, removalists, etc.)
Completing the purchase
Before settlement your solicitor will undertake the necessary searches with respect to the property and your financier will prepare the mortgage documentation.
On settlement your solicitor will exchange with the seller's solicitor:
Keys to the property
Within a few days of settlement your solicitor or financier will register the necessary documentation and mortgage transfer with the Land Titles Registry.
Possession of the property usually takes place on the settlement day although the seller and buyer can agree for these dates to be different.
The award-winning team of real estate professionals in Auckland
Harcourts - No.1 Salesperson in NEW ZEALAND - Sep 2021, Jan 2022