Here’s a brief summary of the first home buyer process:
Step 1: Determine your affordability.
Meet with a mortgage adviser or your bank and get your borrowing ability assessed. Get pre-approved if it’s possible.
If you can’t get approved now, make a plan on what you need to do in order to get your finance sorted in the near future.
Step 2: House hunting. 🏘️
Get out and view some houses. Learn what you like and don’t like and start narrowing down your search.
Get a good feel for the market and learn what houses are selling for and why.
Be aware that it’s a real estate agent’s job to work for the vendor and maximise the sale price of the home.
Step 3: Putting in an offer.
When you’ve found a house that ticks all your boxes, it might be time to put in an offer. You can do this in two ways:
A. Meet with the agent and write the offer up with them. You would put in all your conditions and time frames with them.
B. Request a copy of the sales and purchase agreement and write your offer up with your lawyer. Doing it this way is recommended as your lawyer checks over the legal document before you sign it.
Step 4: The due diligence period.
Once you have an offer accepted your application becomes a live deal.
This is when you complete all the things you need to satisfy your conditions in the offer and confirm whether or not you can still purchase the property.
Your mortgage adviser will need a copy of your sales and purchase agreement in order to get your finance unconditional.
If you’re not pre-approved, this is when your finance application will be submitted.
Your lawyer/solicitor is the key person in your corner during this process helping you ensure you get all your ducks in a row.
If you need to withdraw your KiwiSaver in order to confirm your finance, you will need to sort this with your lawyer early in the process.
Note for Auctions, you must complete your due diligence prior to placing an unconditional bid.
Step 5: Confirm or withdraw from the contract.
If you can satisfy all of your conditions to your expectations and your lawyer is happy with everything, you would instruct them to confirm the contract.
If however you can’t satisfy your conditions like finance, or you’re not happy with other conditions such as the build report, then you can use these reasons to exit the agreement.
If you confirm the contract, this is usually when you pay a deposit, and most likely confirm the settlement day.
Step 6: The finer details.
We’ll need to sort your loan structure, and your loan documents will be ordered, which you’ll then review and sign with your lawyer.
You’ll make sure the lawyer has any remaining deposit required, which could mean you transferring through your cash savings or confirming the KiwiSaver is through.
You need to confirm your insurance, as your lawyer will need to upload a certificate of insurance with your loan documents.
You’ll also need to sort shifting and packing, potential new bank accounts, electricity, plus internet and the like.
Step 7: Settlement day. 🗝️🗝️🗝️
Your lawyer receives the settlement funds from the bank and pays the vendors via their lawyer.
The real estate agent will eventually call you to hand over the keys.
It’s not always wise to plan to move in this day as it can often be later in the day when you get the keys.
It’s common practice to shout ya mates pizza or fish n chips when they help you move.
Please feel free to connect with one of our advisers if you’ve got other questions or would like some guidance through the process. Cheers