The sale and purchase agreement sets out in writing all the agreed terms and conditions of the sale/purchase.
Terms and conditions in the agreement will include
- The agreed price
- Chattels that are to be included in the sale – such as fixed floor coverings, whiteware or curtains
- The type of title – for instance freehold or leasehold
- Any conditions the buyer and seller want fulfilled before the contract is agreed
- The date the agreement will become unconditional
- The settlement date
- Any deposit the buyer must pay
The agreement will also set out obligations and conditions that the buyer and/or seller must abide by. These may include what access the buyer may have to inspect the property before settlement and ensuring the property remains insured until the settlement date.
What happens if the buyer or seller ‘defaults’
The agreement will also cover compensation costs that must be paid if buyer or seller defaults on the terms of the agreement, for example by delaying settlement. You lawyer can explain these conditions to you.
Buyer’s deposit and agent’s commission
A deposit – usually five to 10 per cent of the purchase price – is normally paid by the buyer, either when the offer is made or when it goes unconditional. The agent will usually take their commission from this deposit when the agreement becomes unconditional. However, the money has to have been in the agency’s trust account for 10 working days before they can take their commission.
The settlement date
The agreement will also specify the settlement date – the date when the buyer pays the rest of the amount agreed for the property – usually through their lawyer. This is typically also the possession date, when the buyer takes possession of the property.
New Zealand Residential Property Sale and Purchase Agreement Guide (.pdf 551KB)