Making An Offer On A House
Making An Offer On A House – How To Make & Settle An Offer On Real Estate Property
The Sale and Purchase Agreement
The Sale and Purchase Agreement is a written document that has all the terms and conditions that have been agreed to by both the buyer and seller for the sale and purchase of the property involved.
The terms and conditions will include:
- The agreed price.
- The date the agreement becomes unconditional.
- The deposit the buyer has to pay.
- The date of settlement.
- Any chattels that are included such as white-ware, curtains and floor coverings.
- Any conditions the buyer and seller want done before the contract is agreed to.
- The type of title the property has such as freehold or leasehold.
- Default provisions
The Sale and Purchase Agreement includes the compensation costs that will be paid if the buyer or seller defaults on the terms of the agreement. This could include a payment if the settlement is delayed after making an offer on a house.
It’s best to discuss these conditions with your lawyer.
The agents commission and buyers deposit.
The buyers deposit is typically 10 per cent of the purchase price. It’s usually paid by the buyer either when they make the offer or when it goes unconditional. It’s safer for the buyer to make a condition that it’s paid when the offer goes unconditional. The deposit money has to be in the agencies trust account for ten working days. Then the agent normally gets their commission from the deposit after the agreement has gone unconditional.
The agreement specifies a settlement date which is when the buyer pays the balance of the agreed price for the property after making an offer on a house. Their lawyer normally does this. This is also usually the possession date, when the buyer takes possession of the property.
The Real Estate Agents Authority has produced a Property Sale And Purchase agreement Guide Here.
The Auckland District Law Society website has useful legal information and documents.
You can view a sample of an agreement for sale and-purchase of real estate that you can use for making an offer on a house. At the following link.
You can buy two printed Agreement for sale and purchase forms below – (Note – It’s important to get legal advice before signing an agreement for sale and-purchase of real estate )
Quotable value have useful information to help you research prices in different areas at this link. https://www.qv.co.nz/
Land Information Memorandum report (LIM)
This should be available from the local council for a fee.
Ask the seller if they have a copy of the LIM you can see. If not it may be worth purchasing one before making an offer or bid on a property to avoid some problems it may reveal. This includes whether the land has contaminated soil or is prone to flooding. Also it lists the building consents and certificates of compliance for any renovations and/or alterations.
Land Record Order Form
You can get a Land Record Order Form from the link below –
Conveyancing is the legal work that has to be done when real estate property is bought or sold. This may include: Negotiating a sale and purchase agreement, obtaining a LIM, checking the title of the property, preparing the memorandum of transfer of ownership, as well as liaising with the sellers lawyers and other professionals involved.
You’ve made an offer and it has been accepted. If it’s a:
Conditional agreement – This is a legally binding agreement that is subject to certain conditions being satisfied. These conditions could include the:
- Receipt of a satisfactory building inspection report – Typically takes 3-4 days.
- Receipt of a satisfactory valuation report – Usually takes 3-4 days.
- Receipt of a satisfactory Land Information Memorandum (LIM) – Usually takes about 10-15 working days for a council to complete.
- Purchaser arranging suitable finance to complete the purchase. The financial institution you apply to may require some or all of the above documentation before approving you finance.
- Purchaser’s solicitor approving the title to the property.
They may also require that the seller does something by a specified date.
Once all the conditions are satisfied the agreement becomes unconditional.
This is when the agreement is not dependent on any conditions. You need to have the finance arranged for the full purchase price and have finished all your checks on the property before signing this type of agreement. You should never sign an agreement, conditional or unconditional, without first receiving advice from your lawyer.
This is the date on which you pay for the property. It’s typically the same date as the date you take possession but that’s not always the situation.
If you’re buying through a real estate agent they will send a copy of the signed sale and purchase agreement to your lawyer. It’s a good idea to check with your lawyer that they’ve received it.
The property title has to be searched for and checked, which is best done before making an offer.
A standard sale and purchase agreement contract includes a provision allowing the purchaser to object to the title if there is a problem with it.
Once you’ve gone through all the conditions and settled you are the owner of the property congratulations!
House Buying Guide page order:
1. Pros And Cons Of Owning Versus Renting.
11. Making And Settling An Offer. This Page.