Home buying process


​​We’re looking to buy our first home and there seems to be so much we don’t know about the process. What do we really need to know?​

In many ways, looking for a property to buy is easier than ever. Gone are the days when you had to wait for the agent to show you a list of houses, or make an appointment to view them. You can now examine a property inside and out, not to mention calculate potential mortgage repayments, check current valuations and do a host of other related tasks, using your smartphone.  

But technology hasn’t changed the fact that buying a home is still a big deal. It’s likely to be the most expensive thing you’ll ever buy, and it can be a complicated legal process. It’s even tougher in a hot market, where there is a lot of competition for a limited number of properties. It might be tempting to take a few shortcuts, but failing to do things properly at the start could cause more problems later. 

Not sure where to start? Here are the REAA’s top four tasks for home buyers: 

1. Research the property
Remember that the real estate agent selling the property is acting on behalf of the seller. They are also required to tell you everything they know about the property; they must respond professionally to all your enquiries and not withhold any details. However, you still need to do your own due diligence. That means getting a title search so you can find out all the facts about the property’s ownership, boundary and access, as held by Land Information New Zealand (LINZ). It’s a good idea to get a Land Information Memorandum (LIM), which shows information held by the local council about the property and land. For valuable feedback on the property’s condition, get a report done by an inspector who has professional indemnity insurance and carries out their work in accordance with the New Zealand Property Inspection Standard. Although this all costs money, it will save you more in the long term. Sellers may occasionally provide some of this information for you. If this happens, check that it is up-to-date. 

2. Get legal advice
It’s absolutely crucial to get legal advice before you sign anything. Buying a property is a huge financial commitment but it can cost even more if something goes wrong. A lawyer will handle all the paperwork involved in the process, including the title search, and offer impartial advice. Without legal advice, you might miss or misunderstand the implications of things like easements, rights of way, apartment maintenance responsibilities, correct boundaries or use limitations from town planning.
If you don’t have a lawyer, the New Zealand Law Society can help you find one at propertylawyers.org.nz.

3. Understand the sale process 
There are several methods of buying and selling property, for example, tender or auction. It’s important to understand the process for the property you are buying. Practices can vary between agencies so make sure you confirm details with them. The Home Buyer’s Guide at buyingahome.reaa.govt.nz has more helpful advice. 

4. Read the sale and purchase agreement and understand what it means 
The sale and purchase agreement is your contract with the seller. It is crucial to read it very carefully and get legal advice before you sign. You can negotiate the terms and conditions of an agreement, but once you sign it, there’s no going back. 

Kevin Lampen-Smith is the chief executive of the Real Estate Agents Authority (REAA), the independent government agency that regulates the New Zealand real estate industry. If you have a question about buying or selling property, send it to homebuyers@reaa.govt.nz.
For general advice on buying property, check out buyingahome.reaa.govt.nz​