The home buying process

When you have made an offer to buy a home, or have been successful in a KiwiBuild ballot draw, the seller (the developer, or their sales agent or representative) will provide you with a Sale and Purchase Agreement. It is important that you understand your obligations when entering into an agreement to purchase a home and seek independent advice for any questions you have.

Your Sale and Purchase Agreement

A Sale and Purchase Agreement is a legally binding contract between the buyer and the seller of a home. It provides certainty and clarity to all parties about what will happen, and when, and sets out all the agreed terms and conditions of purchase. The details of Sale and Purchase Agreements can vary between developments, but will typically include:

  • The agreed sale price
  • The type of title on the home (e.g. freehold or leasehold)
  • The deposit the buyer must pay
  • A list of conditions you and seller want fulfilled
  • The date the agreement will become unconditional
  • A list of any chattels included in the home (e.g. whiteware, blinds or curtains)

Your lawyer will review your agreement, negotiate any conditions on your behalf and make sure you understand all your obligations and the conditions of sale before you sign.

More information about Sale and Purchase Agreements is available at settled.govt.nz.

Understanding types of offers

There are two options when you make an offer to purchase a home, conditional and unconditional. You should always have your lawyer review and advise on a Sale and Purchase Agreement before you make an offer.

Conditional offers

A conditional offer is where you can specify certain conditions that must be bet before you agree for your Sale and Purchase Agreement to go unconditional. Some common conditions include making your offer subject to obtaining:

  • Lawyer or solicitor approval: To give your lawyer time to review your agreement.
  • Confirmation of finance: To give you time to confirm your loan details that are ‘satisfactory to you’.
  • Valuation report: Your bank or lender may require a valuation report as part of their lending criteria.
  • Insurance: You may need to arrange insurance cover as part of your loan conditions.
  • Sale of property: You may need to have begun the process of, or finalise the sale of current a property.

Your lawyer will negotiate conditions and inclusions with the seller on your behalf and make sure they have been met within an agreed timeframe. While your agreement is conditional, you can decline to proceed with the purchase the home without penalty.

Unconditional offers

An unconditional offer is where there are no conditions attached to your offer to buy. By this stage, you should have sought independent legal advice and reviewed all the conditions in your Sale and Purchase Agreement. Make sure you have carried out all due diligence and before your offer goes unconditional, because if your offer is accepted you will be legally committed to the purchase of the home.

The KiwiBuild Deed of Covenant

A unique condition of buying a KiwiBuild home is that you will need to commit to and sign a Deed of Covenant. This is a legally binding agreement that confirms you intend to live in your KiwiBuild home as your primary place of residence for a minimum period of time before the home can be rented out or sold:

  • At least one year for a studio or one-bedroom home
  • At least three years for homes with two-bedrooms or more.

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