Owning your own home is an exciting step to make, but the process of getting there can be stressful and potentially risky if you are not well-informed and do not understand what is required of you. Similarly, selling your home requires an understanding of the steps you will need to avoid any possible legal complications.
The following is a simple guide of what you can do to avoid stress, minimise cost and prevent costly legal complications.
Your lawyer will play a large part in the process and will advise you throughout all stages. Their knowledge and experience in this area is abundant, and they know how to pre-empt problems, assist with the due diligence and help coordinate any finance required. Regardless of the type of property you are looking to buy or sell, your lawyer’s job is to protect you against risk, and assist you in making informed decisions while minimising stress. Your lawyer needs to be one of the first professionals you contact to provide initial guidance on the process.
Buying a property
When looking to purchase a property a prudent purchaser should:
Determine how much you can afford to borrow, set a price range for your property search and talk to your mortgage broker or bank early to help you with this decision.
If you intend to use your KiwiSaver to assist with your purchase contact your KiwiSaver provider to ensure that you qualify, and confirm the amount available to use.
Shop around to work out what you can afford to purchase and get a comparison of what is available in your price range.
Do not sign the sale and purchase agreement before discussing the transaction with your lawyer.
Investigate insurance for the property.
Ask your lawyer to review the title and associated documents.
Obtain, and ask your lawyer to review, a Land Information Memorandum (LIM). Make the agreement conditional on your approval of this.
Have a suitably qualified builder look at the property and provide you with a written report identifying any issues or work that may be required.
Selling a property
Discuss and finalise what you want from the sale, including the prices you are willing to accept, choice of agent and selling methods.
It is important that you identify any issues that must be legally disclosed to a potential purchaser. If you are unsure discuss it with your lawyer.
In some cases you will need to seek advice from your accountant.
Your lawyer should review the agreement prior to signing to make sure it reflects your intentions and you are adequately protected.
The above are some of the basic steps to set you up for a successful purchase or sale of a residential property. No property transactions are the same and in many cases there are additional legal issues that must be considered. This is where good legal advice is essential.
