Your real estate buying journey Buying and not sure what to do when? Brought to you by the Real Estate Authority Understanding the end- to-end real estate process Be a confident home buyer with settled.govt.nz Buying a home is one of the biggest financial decisions you’ll ever make. It can be a complex and sometimes stressful process. Settled.govt.nz will help to inform and guide you through the process from when you’re thinking of buying right through to when you’re moving in or out. Have a look at the checklists, quizzes, videos and tools. From understanding LIMs to sale and purchase agreements to when to contact a lawyer, settled.govt.nz explains what you need to know. Learn more at settled.govt.nz 1
Your real estate buying journey Before you can make an offer, you’ll need to know the method of sale being used for that home. Remember, the real estate agent should treat everyone fairly, and your lawyer or conveyancer is there to support you through the process. Don’t make an offer on a property before seeking legal advice. Finding a property Thinking of buying? Agree on your goals Decide what you’re looking for and what your goals are. Talk to friends and family. Sort your finance How much can you borrow or afford? Buying a new home comes with additional costs you need to budget for. Investigate and understand your loan options and limits before you take out a home loan. Build your support crew You’ll need a lawyer, an insurer and a bank or mortgage broker. You may need a property inspector later too. Learn the lingo The more prepared you are, the less confusing the process will be. Learn about methods of sale, types of property ownership and how to identify risks and potential issues. Attend open homes or arrange a private viewing By now, you’ll know what you’re looking for in a home and what red flags to watch out for. If you like a home and it meets your needs, you can let the agent know and start researching it in more detail. 2
3 Researching the property Making an offer Do your homework When you’ve found the property you want to buy, it’s important to find out as much as possible before you make an offer. Understand the multi-offer process If another buyer also puts an offer on the property you want, it becomes a multi-offer process. Ask the agent to clearly explain the process and make sure you talk to your lawyer. Ask for a title search A record of title is essential. It is specific to the address you are looking at and will tell you if there are any restrictions against the property. Understand issues and hazards Doing your homework means you can make informed decisions, for example, you’ll learn about the neighbourhood and what kind of natural hazards might happen in the area. Understand the offer process The offer process will vary depending on the method of sale. Learn about the different methods of sale. You may repeat the offer process several times before you are successful. Don’t make an offer on a property before seeking legal advice. Use settled.govt.nz’s Property Checker Tool It may take a while to find the ideal property. Doing your homework means you can make informed decisions.
4 Settling and moving in Confirm your finance Now’s the time to confirm your finance with the lender. Most banks will ask you for more information about the property and require proof that you’ve arranged insurance before settlement. Meet conditions Any contract conditions must be met by the specified date(s). Plan for settlement day A number of things need to happen before settlement day, such as your pre-settlement inspection and ensuring your finances and insurance are in place. Make a conditional offer or an unconditional offer With some methods of sale, you can make a conditional offer, such as the offer being subject to a property inspection or finance. Ask your lawyer for advice. You may decide to do some of these before making your offer. Settle on settlement day The big day has arrived! Many things need to happen in sequence between your lawyer, the seller’s lawyer and the banks before the property becomes yours. This can take time, and you may not get the keys until late in the day. It’s a good idea to plan to move in the day after settlement day.
Buying by advertised price, deadline sale or negotiation Advertised price: The seller sets a price, and you can choose to offer more or less than that price and negotiate the sale. There is no specific deadline your offer needs to be received by. Deadline sale: The seller sets a date, and you can make an offer at any time before that date. The seller may indicate the price. You can offer more or less than that price and negotiate the sale. Negotiation: When it’s difficult to estimate the market value of a property, a seller may choose to sell by negotiation. Buyers make offers based on what they think the property is worth in the current market. You can make an offer at any time. Important things to know • In all cases, you can attach conditions to your offer, like making the offer subject to a property inspection. You can change your offer at any time before the seller accepts it, and you can include an expiry date on the offer. • The seller can also attach terms and conditions to the sale, for example, the settlement date. • If you can’t meet the conditions or need an extension, you need to talk to your lawyer or conveyancer and the real estate agent as soon as possible. • If there is more than one offer, the sale may become a multi-offer process. 5 Doing make in you’ll le and m Don’t make an offer on a property before seeking legal advice Understand the offer process The offer process will vary depending on the method of sale. Learn about the different methods of sale. al offer al offer sale, you offer, such ject to a finance. advice. some of our offer. n nt, rly e Meet conditions Any contract conditions must be met by your specified date(s). Settling and moving in Making an offer Buying by tender When a property is for sale by tender, buyers give a confidential written offer by tender to the agent before a specified end date. Important things to know • You can attach conditions to your offer. The seller can also attach terms and conditions to the sale. • You can make an offer at any time. • The seller doesn’t have to accept the highest offer or any offer. The seller may choose to negotiate, through the agent, with anyone who submitted an offer. • You may not get a chance to negotiate once you submit your offer, so consider putting forward your best offer. Buying by tender unless sold prior Some tenders may be sold prior to the deadline, and this should be highlighted in the advertising. • If the seller decides to accept offers earlier than the tender end date, the property can be sold before this date. • Register your interest with the agent and ask to be informed if someone else makes an offer before the end date to see if you can also make an offer. • If the seller has decided they will accept offers before the end date and there is more than one offer, the sale may become a multi-offer process. Buying by auction A property auction is a fast-paced, public sale. The property is sold to the buyer with the highest bid after the seller’s reserve price is reached. Important things to know • Buyers should register their interest with the agent and ask to be informed if another buyer makes an offer before the auction date. • If you haven’t been to an auction before, it’s a good idea to attend one as a spectator so you can see how they work. • If you win an auction, you are committed to purchase the property. You must pay the purchase deposit on the auction day. It’s very important to have your finances in order and to complete your due diligence before you think about bidding at auction. Whichever offer process is used, remember that a sale and purchase agreement is a legally binding contract, so get legal advice before you make your offer.
Multi-offer process A multi-offer process happens when more than one buyer makes an offer on a property. It’s important to put your best foot forward in this situation as you might not get a chance to increase your offer or to negotiate. Important things to know • Agents must clearly explain the process and any relevant paperwork to all buyers. • There must be more than one offer in writing. An agent can’t say you are in a multi-offer process if there are no other offers in writing. • In a multi-offer situation, the seller can choose the offer that works best for them. An offer with a lower price but fewer conditions may be chosen over a higher price with more conditions. The seller can also choose to decline all offers. • If you have any concerns about a multi-offer process you are part of, you can speak to the agent’s manager. Real Estate Authority Settled.govt.nz is brought to you by the Real Estate Authority (REA) – Te Mana Papawhenua (REA). REA is the independent government agency that regulates the New Zealand real estate profession. Our purpose is to promote and protect the interests of consumers buying and selling real estate and to promote public confidence in the performance of real estate agency work. If something has gone wrong, first discuss your concern with the real estate professional or their manager. All agencies must have in-house procedures for resolving complaints. If you can’t resolve the issue with the agency or you don’t feel comfortable discussing it with them, you can contact the Real Estate Authority (REA). We can help in a number of ways if your complaint is about the real estate professional. For example, we can help you and the real estate professional or agency to resolve the issue and remind them of their obligations under the Real Estate Agents Act 2008. When you contact us, we’ll work with you to help you decide the best thing to do. Call us on 0800 367 7322, email us at info@rea.govt.nz or visit us online at rea.govt.nz 6 options and limits before you take out a home loan. property inspector later too. may repeat ffer process everal times fore you are successful Understand the offer process The offer process will vary depending on the method of sale. Learn about the different methods of sale. Make a conditional offer or an unconditional offer With some methods of sale, you can make a conditional offer, such as the offer being subject to a property inspection or finance. Ask your lawyer for advice. You may decide to do some of these before making your offer. Understand the multi-offer process If another buyer also puts an offer on the property you want, it becomes a multi-offer process. Ask the agent to clearly explain the process and make sure you talk to your lawyer. Meet conditions Any contract conditions must be met by your specified date(s). S M an finance o confirm with the anks will more bout the require ou’ve urance ment. Getting help when things go wrong This guide is available in other languages. You can find a translated copy of this guide here settled.govt.nz/resources October 2022
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