A common question asked by first home buyers is ‘when should I engage a lawyer?’ Purchasing your first home is a complex and stressful task for most people. There are many risks that are associated with purchasing property together with endless to-do lists and a mass of new information that you are subjected to. Engaging your lawyer before you even start to look for your first home can help make the purchasing process much easier and less stressful.

Understanding the Process

An initial meeting with your lawyer before you even start looking for a home can help you understand the process of buying property. Your lawyer will be able to answer questions, help you understand what conditions you may need down the track when making an offer on a property, and explain some of the things you may want to check beforehand, to make sure there are no issues later.

Reviewing Agreements

Once you have found a property that you want to buy, you will need to make an ‘offer’. This means completing an ‘agreement for sale and purchase’ generally with the real estate agent (or the seller if it is a private sale). When you submit your offer, it is important that it is accurate, drafted appropriately for you and subject to any conditions that you may want to have. It is important to have your lawyer review the offer, to make sure you are properly protected.

If you are using your KiwiSaver as part of your deposit or applying for the Housing New Zealand Home Start Grant, your lawyer can help you work out any applicable timing implications. It is important to avoid the contract placing you under undue stress to complete your KiwiSaver withdrawal or access the grant, or for those timeframes to make those matters unachievable.

Due Diligence

Before buying property, purchasers need to undertake ‘due diligence’. This means undertaking all relevant checks to make sure the property is in order, or if not that you are aware of that and any implications. Sometimes when making an offer, conditions can be included to cover some or all matters of due diligence, for example:

  1. Obtaining from the local council a Land Information Memorandum (“LIM”) to review the Council’s records in respect of the property;
  2. Approval of the certificate of title for the property to make sure there are no defects in the title or matters which could restrict your use of the property;
  3. Confirming financing arrangements to buy the property;
  4. Arranging insurance for the property;
  5. Checking the building on the property is structurally sound, and not defective by obtaining a building report.

The fewer conditions that there are in an offer, the more attractive it will be to a seller. For that reason, some people will prefer to complete some or all of their due diligence before submitting their offer.  Your lawyer can help you with the due diligence process by reviewing the LIM from Council, checking the certificate of title for the property, and helping you understand any other checks you may need to do.

For more information

In summary, the earlier you engage a lawyer when looking to purchase a property, the better. This will ensure you are well informed, understand the process and are best placed to have a successful first-home buying process.

For a complimentary, no obligations meeting regarding your purchase, please contact our property lawyers Jamie Nunns, email jamie.nunns@morrisonkent.com, phone (04) 495 8912 or Zaneta Aislabie, email zaneta.aislabie@morrisonkent.com, phone (04) 495 8911

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