Buying or selling a property?

Sale and purchase agreement is always used whenever you purchase or sell a house in New Zealand.

The most common ways people buy or sell houses are by auction, tender, negotiation, or fixed price. Sales can be made privately or with the assistance of a real estate agent. Regardless of whichever path is taken, you must always have a written agreement for the sale and purchase of real estate.

A sale and purchase agreement is a legally binding document, and sets out all the agreed terms and conditions for both the seller and purchaser. Among other things, a standard property contract includes the names of the vendors and buyers, address of the property, type of title, chattels, agreed sale price, conditions of sale and the unconditional and settlement dates for the transaction. It is important that your lawyer always checks the sale and purchase agreement before you sign it.

Most sale and purchase agreements contain conditions that need to be met before the transaction can go ahead. Common conditions include the purchaser seeing and approving a Land Information Memorandum (LIM) or building or valuer’s report, or gaining suitable finance. A lawyer’s advice is often invaluable in assisting a purchaser to determine whether these conditions have been met satisfactorily.

The term used to describe the legal work involved in a property transaction is conveyancing.

Typical conveyancing work that a lawyer carries out includes:

• Checking the title to the property
• preparing mortgage documents and facilitating loan arrangements between the client and their bank
• preparing Authority and Instruction forms (the document that transfers ownership from the vendor to purchaser)
• checking all rates and other costs are paid for checking insurance has been arranged by the purchaser
• conducting a ‘guaranteed search of title’ from the Land Information Office. This protects
• the purchaser from any other claims over the property for a period of eight weeks (two weeks before and six weeks after settlement date)
• completing settlement (paying the settlement funds in exchange for clear title)

While some vendors/purchasers may be tempted to cut costs by bypassing a lawyer, this could end up being a costly decision. Property lawyers are skilled and their advice can be invaluable, particularly if there are joint ownership issues, you are part of a de facto relationship, or if a vendor or purchaser fails to settle.

Conveyancing costs are quite reasonable, and can save a lot of stress and heartache in one of the biggest financial decisions you may ever make. If you are looking to purchase or sell property, contact Smith and Partners to make sure your interests are protected right from the start.