Legal – Before you sign the dotted line

Buying and selling property can be exciting, but it also involves some of the biggest financial and legal decisions people will make. In a fast-moving market such as Mangawhai, both buyers and sellers can feel pressure to make quick decisions. A little preparation and a good understanding of the process can help avoid costly mistakes.

One of the most important steps when buying or selling is speaking with your lawyer early. If an agreement has not yet been signed, legal advice can help ensure it contains the right protections for you. If it has already been signed, legal advice can help prevent the agreement from becoming unconditional before you are ready. This is important because once an agreement goes unconditional, buyers can no longer rely on finance, LIM, building report or other conditions. Equally, sellers are unable to change their minds because their own purchase falls through or a better offer appears.

Understanding some of the terminology used during a property transaction is also important. Take the word ‘deposit’. When an agent refers to a deposit, they are usually referring to the amount specified in the agreement for sale and purchase, which is paid once the agreement becomes unconditional. When a bank refers to a deposit, it is generally talking about the buyer’s contribution towards the overall purchase price. These figures often differ, which can be confusing if buyers are unaware of the distinction.

KiwiSaver can be a valuable tool for first-home buyers. If you have been a member for at least three years, you may be eligible to withdraw your savings to help purchase your first home or qualify under the second-chance withdrawal rules, but KiwiSaver funds are not available immediately. Withdrawals typically take between 10 and 15 working days to process, so forms should be completed and submitted well in advance. If funds are needed for a deposit, the seller must also agree to them being paid to a stakeholder, usually the seller’s lawyer, rather than directly to the real estate agent.

Auctions are slightly different. If you are the successful bidder, the agreement is unconditional from the moment the hammer falls. Buyers therefore need to complete all due diligence beforehand, including reviewing LIMs and building reports and obtaining any necessary lending approval. When timeframes are tight, important issues can easily be overlooked.

For sellers, one of the most common problems arises when home improvements have been completed without the necessary council approvals, or where work has been consented, but a Code Compliance Certificate has never been obtained. Even relatively minor building works such as decks and garage conversions can raise concerns during a buyer’s due diligence. These issues can delay a transaction and, in some cases, cause a sale to fall over altogether. Providing accurate information and addressing potential concerns early can help keep the process on track.

Whether buying or selling, taking the time to understand the process and seeking legal advice early can save significant stress and expense later on.