Key considerations for purchasing your first home

Buying your first home is a monumental decision - one of the largest financial commitments you’ll make in your lifetime. Beyond securing funding and navigating the market, enlisting the help of a qualified lawyer is crucial to ensuring a smooth transaction.

In our three-part series, Key considerations for purchasing your first home, Tom Brodie and Michelle Ansin break down the essential steps in your journey to homeownership. From sorting out your finance and understanding the importance of retaining a lawyer, to navigating the completion of settlement and gearing up for moving day, we’ll provide the guidance you need to confidently take each step toward your new beginnings as a first homeowner.

Part 3: The finish line is in sight – settling your property purchase

Understanding the settlement process is pivotal for first-time homebuyers, as it marks the final stages of acquiring your new home.

This phase involves several critical steps, including confirming conditions, withdrawing funds, arranging insurance, and deciding on the structure of ownership. By familiarising yourself with these steps and working closely with your lawyer, you can ensure a seamless transition from contract to ownership, paving the way for a successful and stress-free settlement.

Your property settlement checklist

You have done your research, obtained finance approval, retained a lawyer, found a property and entered a contract – what happens next?

Confirmation of conditions

Your lawyer will assist you through this process, which may include further negotiations on the agreement terms should matters come to light.

Unconditional

Once the conditions are all satisfied, the agreement is unconditional, and the deposit becomes payable.

Withdrawal of KiwiSaver  

You will need to complete your withdrawal forms (if you have not done so already) and sign a statutory declaration in front of your lawyer. Your lawyer will forward the completed form and supporting documentation to your provider.

Confirmation of lending structure

You will need to formalise your lending structure through your mortgage broker before loan documentation can be issued to your lawyer. This includes you choosing your interest rates and fixed portions (if any). Your mortgage broker will guide you through this process.

Insurance

You will need to arrange full replacement insurance for the property noting the interest of your mortgagee (if any). A certificate of currency (Insurance Certificate) will need to be forwarded to your lawyer.

Structure of ownership

This may or may not be complex dependent on your circumstances and your lawyer will discuss this with you. The ways you can own land are:

• Joint tenants – You own the property jointly with others and the property passes on death to the survivors.
• Tenants in common – You own the property in shares. Upon death the property passes in accordance with your wills.
• Combination – A property can be owned with a mixture of joint tenancy and tenancies in common.

Signing documentation

You will have a meeting with your lawyer to sign the loan and settlement documentation to complete the purchase and transfer the property into your name. Your lawyer will also advise you at this stage if any additional funds are required and how, where and when to pay them.

Pre-settlement inspection

You are entitled to one pre-settlement inspection of the property prior to settlement, and we recommend that this is completed in the week before settlement. This inspection is an opportunity for you to check that all chattels remain in working order and that the property is in the same condition as when you signed your agreement.

Settlement day

Settlement is more often than not completed after lunch as there are a number of legal matters to be completed between the lawyers and the bank.

Key collection

Congratulations! Settlement is completed and you can collect the keys from the agent.

You've bought a house. What happens next?

Owning a home is a major achievement and milestone in your life, but it also comes with responsibilities. One crucial step you should consider taking immediately after purchasing your home is drafting a will. This legal document ensures that your property is distributed according to your wishes, providing peace of mind for you and your loved ones.

We strongly encourage you to discuss this with your lawyer during your settlement process. Drafting a will is a straightforward process that can prevent future disputes and protect your significant investment. By taking this step, you’re safeguarding your new asset and ensuring that your hard-earned property is managed according to your wishes.

Remember, your lawyer is there to guide you through every step of the home-buying process, including the creation of a will.

Key considerations for purchasing your first home - quick list of do's and don'ts

Do:

• Engage with a mortgage broker and lawyer early in the process.
• Be present, conditional datelines can move quickly and you need to ensure that you have completed your checks in time.
• Confirm your lending structure to the bank – they will not issue loan documentation until this is confirmed.
• Ask questions.
• Following settlement, join MyAuckland (Auckland Council) and WaterCare to receive your invoices online. Late payment of accounts incurs penalties.

Don’t

• Sign an unconditional agreement without speaking with a lawyer / mortgage broker first. Once an agreement is unconditional – you are legally bound to complete the purchase, and the vendor has rights to pursue you in Court for compensation or completion of the settlement.
• Book your moving truck for 9am on settlement date. Settlement rarely occurs this early and you will pay for a sitting truck.

Final comment – make sure you feel comfortable with your lawyer

All questions are good questions. You need to feel comfortable with your lawyer and be able to ask questions to ensure that you have a good understanding of the process and your obligations.

Purchasing a property is a significant and complex process that requires careful planning, timely actions, and informed decisions. By engaging with professionals early, staying proactive, and ensuring your understanding of all aspects involved, you can navigate the intricacies of property acquisition with confidence. Trust your instincts and seek advice when needed, ensuring your journey to homeownership is as smooth and rewarding as possible.

If you have questions about any of the topics raised in this series, or you would like legal assistance to buy your first home, please contact Tom, Michelle or our team of property experts.

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