Blog 3 - Property

FIRST HOME BUYERS - Purchasing your first property.

After dealing with many first home buyers, I would say one thing. Your first home is not your forever home! So the sooner you can get on the ladder the better, as the second house purchase is much easier to achieve if you already have a house.

Get your loan pre-approved from the bank first! Without finance approval you will either have to keep saving, win lotto or ask the bank of Mum and Dad to help out! Just like other first home buyers, you usually obtain your finance from a main bank with a mortgage. However there are other options like non bank lenders and mortgage brokers who can assist with this process.

Your journey to your dream first home starts with you making an offer to a Seller or Vendor if you want to be flash. The agent or the Vendor’s Lawyer usually draw up a Sale and Purchase Agreement (Contract) and add conditions. At this point I would say “buyer beware” and best practice in line with the NZ Law Society’s website is to have your Lawyer or legal representative look at the Agreement prior to signing it.

With regard to your finance, your bank pre-approval letter usually comes with conditions attached. As you proceed you will have a better idea if you can meet those conditions which will allow you to satisfy your finance condition. Having this knowledge will assist you to make a realistic offer which will increase your chance of landing that Contract.

Get your pre-approval from the KiwiSaver Provider

Many first home buyers rely on their KiwiSaver for their deposit. It is important to know if you are eligible to withdraw your KiwiSaver funds, as the last thing you want is to miss out on your dream home because of eligibility issues. Start this process early by contacting your banker or mortgage broker to “run the numbers” and if you have the pre approval then you would contact your Kiwisaver provider for forms to fill out regarding your withdrawal.

Most KiwiSaver providers require 15 working days to process your withdrawal. Ideally make sure your finance condition has at least 15 working days so that you can get approval, withdraw and pay the deposit on time. Do not forget that you can also use your KiwiSaver funds as part of your settlement instead.

Other Conditions on Your Agreement (ie the Contract)

Don’t forget to add other conditions such as a Building Report, LIM Report and Toxicology report. Again, as suggested by the NZ Law Society it is best practice to have you Lawyer check your property report prior to signing your Agreement or Contract. This will ensure you are getting good advice and protecting your interests, especially in uncertain times.

Conclusion

SO, before you sign anything, talk to a lawyer to get your legal advice to protect your interests. Your lawyer will guide you through your first home purchase, which can be extremely confusing and stressful. We are here to HELP. Telephone us now - Richard Watling - Mobile 027 700 1622 or (09) 278 3860.