Congratulations on taking the first step to achieve your home ownership dreams. Although things might be a little daunting at first our expert advisors have prepared our first home buyer checklist with YOU in mind. Our First Home Buyer Checklist is broken it down to FIVE key steps to help you along the way…
- Before you sign a sale and purchase agreement
- after you’ve signed a sale and purchase agreement
- going unconditional
- settlement day
- after settlement day
Our experts are here to help you along the way but our First Home Buyer Checklist let’s you know what you need to do depending on the stage you are at, and what else you will need to do throughout the process.
Before signing a Sale and Purchase Agreement...
TALK TO ONE OF OUR ADVISORS
Let’s get the process started. You can book a free no-obligation consult with one of our advisors where we can get to know you and your financial position, discuss what your options are and apply for a pre-approval (subject to lending criteria) plus we will go over our disclosure guide with you to make sure we are the right fit for you. If you haven’t already, contact us now.
Our First Home Buyer Checklist has been made to help you understand the process but remember your Advisor is always there to help you along the way.KIWISAVER AND HOME START GRANT
If you are using your Kiwisaver to purchase your first home you will need to call your Kiwisaver Provider and apply for a pre-approval to withdraw your Kiwisaver. You will need to let them know you want to purchase your first home using your Kiwisaver and they will send you confirmation if you are eligible to withdraw.
You may also be eligible for the Kainga Ora First Home Grant. You can apply for a pre-approval online which will save you a bit of time down the track. Specific eligibility criteria does apply. For more info on the First Home Grant click here, or to apply for a pre-approval click here.KNOW YOUR DEPOSIT
When you declare the sale and purchase agreement unconditional you will need to pay a deposit which is normally 10% of the purchase price – but this can be negotiated. Before you sign the sale and purchase agreement, be sure of how much you can pay at that time (using Kiwisaver withdrawal, saving’s or gift). Some banks will allow you to arrange a temporary overdraft to pay the deposit, but you will have to pay interest (P.s. The deposit required by the bank isn’t always the same as the deposit on the sale and purchase agreement).KNOW YOUR CONDITIONS
A LIM, Meth Test, Build Report, Finance and Due Diligence are all common conditions on sale and purchase agreements. If you want these as conditions on your offer you will need to ask for these to be added before signing a sale and purchase. If you are unsure what you should condition for, or how long to allow for these conditions talk to your advisorIf you have less than a 20% deposit or are using Kiwisaver to pay your deposit make sure that you put at least 15 working days as a finance condition. If you have a 20% deposit or more, talk to us about how long you need for finance.
TALK TO YOUR LAWYER
A Sale and Purchase Agreement is a legally binding contract. It’s often a good idea to involve your lawyer before signing a sale and purchase agreement so you have a full understanding of what the conditions are, and what you are buying. Plus they have anti-money laundering processes that they have to follow so you may need to meet their ID requirements before they can give you any advice – Need a recommendation? Just ask.
A LIM, Meth Test, Build Report, Finance and Due Diligence are all common conditions on sale and purchase agreements. If you want these as conditions on your offer you will need to ask for these to be added before signing a sale aAfter sign and Sale and Purchase Agreement...
- FINALISE YOUR FINANCE
Next up on our First Home Buyer Checklist – It’s time to finalise your finance. Because you have a signed sale and purchase agreement let us know ASAP. If you have a pre-approval, send the sale and purchase agreement to us (and any other outstanding conditions on your loan pre-approval).If don’t have a pre-approval now is the time that we will need to get all of the information together and get your application sent away as soon as possible. Once you are approved your advisor will help you work through any finance conditions that may apply.
As part of this – The bank may ask for a Registered Valuation which normally takes 7+ working days (but may be longer depending on capacity limits and location). We need to order this for you through the banks preferred channel – at your cost (you cannot order this yourself).
Open communication with your advisor is key here – We will keep you in the loop throughout the whole process and help with any questions you have along the way. CONDITIONS
If you conditioned for anything else on the sale and purchase agreement you will need to get these underway within the appropriate time frames…- LIM – A LIM report can be ordered through your lawyer or you can order this for yourself using your local city council. This normally takes 10 working days but an express LIM may be available for an additional fee.
- Build Report/Meth Test – You can choose who you want to complete your build report or meth test. These normally take approx. 5 working days to complete. If you need a recommendation please let your advisor know.
- Due Diligence – This clause allows your lawyer to do their appropriate checks (i.e. Lim, checking the contract and doing a title search) which allows them to give you advice specific to your property purchase and help you make an informed decision prior to going unconditional.
- What if something is wrong?
If anything irregular or any areas of concern show up on any of the above conditions this can be the time to negotiate. If the issues are minor you may be able to talk to your lawyer to get these issues fixed before settlement OR a reduced purchase price. If the issues are major this may effect your home loan application. Its important to keep your advisor and lawyer up to date.
TALK TO YOUR LAWYER
Kiwisaver and First Home Grant: If you are using your Kiwisaver or the First Home Grant you will need to complete withdrawal forms with your solicitor. If you are intending to use your Kiwisaver to let your lawyer know so they can withdraw the funds in time.
Meeting Conditions: If you are happy to meet all of the conditions on the sale and purchase agreement (i.e. you are unconditionally approved for finance, accept the build report, LIM and Meth test and are 100% happy to proceed) you will need to let your lawyer know and they can confirm the contract “Unconditional.” (p.s. congratulations, that’s very exciting!)
Kiwisaver and First Home Grant: Going Unconditional...
- PAY YOUR DEPOSIT
Once you have declared the sale and purchase agreement unconditional you will need to pay your deposit to the real estate agent or to your solicitor’s trust account. This is the deposit that is outlined on the sale and purchase agreement (i.e. normally 10% of the purchase price). Generally you will receive a deposit slip from your lawyer or Real Estate Agent but it Is always good practice to double check over the phone to make sure you are paying the correct account number.If you are using your Kiwisaver to pay the deposit and have completed the appropriate forms your lawyer should have received the funds in their trust account and can pay the deposit on your behalf.
Generally, you have three working days to pay the deposit.
TALK TO YOUR ADVISOR (again)
Once you are unconditionally approved, we will be in a position to negotiate interest rates and a cash contribution for you (if applicable). When we have a pricing offer from your bank or other lender, we will book a time to catch up with you again (either in person or over ZOOM), discuss how best to structure your loan to suit you and when you are happy we will accept the loan and order loan documents.As part of this process your advisor will go over their disclosure guide with you and provide you with your personalised advice document.
- INSURANCEPrior to settlement you will need to arrange full house insurance with no exclusions unless the property you are purchasing has insurance already included in their body corporate fees. If you would like to discuss your house and general insurances please let us know and we can refer you onto a trusted general insurance advisor. Prior to settlement you will need to provide your solicitor with a copy of Certificate of Currency.
Because you are taking on a large asset and a large debt it is also important to review your Life Insurance to make sure you are adequately covered. Although life insurance is not compulsory it is strongly encouraged as having a plan B for if something goes wrong, this is really important. If you’d like we can refer you onto our Risk Insurance Advisor Zak White to book a no-obligation free consult. - SIGN LOAN DOCUMENTS
After you have chosen the right loan structure and loan documents have been ordered, your lawyer will be issued with loan documents. You will need to arrange a time with them to go over the loan documents and sign these in person.
Although it is not compulsory, we would also recommend talking to your lawyer about Ownership structures (if purchasing with someone else), your Will and your Enduring Power of Attorney at the same time. - BRANCH APPOINTMENT
Someone from your preferred branch will be in touch to arrange a handover with you. They will open up an account for you, confirm which account you want your repayments to come out of and If you are new to bank they will need to sight your ID and proof of address in person. They may have other “know your customer” requirements that you need to meet which they will discuss with you.
PRE-SETTLEMENT INSPECTION
Close to your settlement date you should arrange a time with the Real Estate Agent (or Vendor) to view the property again. This normally happens a week out from settlement and is your opportunity to ensure that the property is in the same condition as when you originally viewed the property.
if you notice anything new that needs repair or is out of order you will need to discuss this with your lawyer so there is enough time to rectify prior to settlement.- SETTLEMENT STATEMENT
Around a week before settlement, you should request a “Settlement Statement” from your lawyer. This will outline how much you need to transfer to their trust account prior to settlement to make sure that they can complete the purchase for you on settlement day.
This will include any additional deposit that you need to pay, your share of council rates and any legal fees that may have incurred.
Prior to settlement you will need to arrange full house insurance with no exclusions unless the property you are purchasing has insurance already included in their body corporate fees. If you would like to discuss your house and general insurances please let us know and we can refer you onto a trusted general insurance advisor. Prior to settlement you will need to provide your solicitor with a copy of Certificate of Currency.
Estate Agent (or Vendor) to view the property again. This normally happens a week out from settlement and is your opportunity to ensure that the property is in the same condition as when you originally viewed the property. Settlement Day...
- LOAN ADVANCED
On settlement day the bank will advance the loan to your lawyers trust account. Once your lawyer has received confirmation that the funds have been received they will arrange to make payment to the vendors lawyers trust account - COLLECT KEY’S
Once the vendors lawyer has confirmed that they have received the funds they will confirm this with your lawyer and the Real Estate Agent. This then means that you can collect your keys to your future home and you are now a home owner! Congratulations! TITLE
Your lawyer will arrange for the property title with the LINZ to be transferred into your name (or the purchasing party)
After Settlement Day...
- CASH CONTRBUTION
If you were offered a cash contribution this should deposited to your home loan account either on settlement day or within a week following. - KIWISAVER REVIEW
Whether or not you used your Kiwisaver for your first home purchase, its going to be a while before you can use your Kiwisaver again, so we need to make sure that you maximise your Kiwisaver returns for your retirement. If you would like to arrange a Kiwisaver review let us know and we can get this process started. - KEEP IN TOUCH
As your home loan advisor we are with your for the life of your loan. We can help review the mortgage, ensure that your bank or lender is still offering you competitive rates, make sure that your home loan structure still meets your needs. If you are looking at buying and selling, want a top-up, purchasing a rental or anything else to do with the home loan we can help.The bank is there to assist with your day to day requirements but we are still here to help with all of your home loan needs. Dont forget to bookmark our First Home Buyer Checklist so it’s easy to find.
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