Once you’ve found the perfect home to buy, you can put in an offer. But don’t be too hasty!
There are a number of things you will want to check before the house becomes officially yours. You don’t want to be landed with a house that isn’t safe to live in, or is sitting on land that belongs to someone else.
It’s best to put in a ‘conditional offer’, which means that certain conditions will have to be met before the sale is finalised. Always discuss this with your mortgage broker & lawyer first if you would prefer to put in an unconditional offer.
Common conditions that buyers like to include are:
You will want your lawyer to find out who the house actually belongs to and to ascertain if anyone else has any claim to this property. They will check the title to see if there are any other legal concerns.
LIM (LAND INFORMATION MEMORANDUM)
A LIM report from the local council can be vital. It shows information such as where the boundaries are, what permits have been applied for and consented, if there are any special land characteristics (including potential erosion, slippage or subsidence), and where the storm-water and sewerage drains are, plus original house plans and much more.
It’s important you get in an impartial builder to check over the house and make sure it’s in sound condition. Some buyers are also having their prospective properties tested for drug contamination. If the house has been used for preparing methamphetamine, it may cost thousands of dollars to clean up and decontaminate. Checking the house is in good, liveable condition beforehand will save a lot of time, money and heartache later.
This may be recommended from the outcome of a builder’s report but can relate to the house structure and/or section of the property, in particular retaining walls. If any issues are found by an engineer they could be costly and in some cases be reason not to purchase the property.
Will your finance be sorted out by handover date? This about kiwisaver time frames and how you will pay the deposit. Conditional on finance means that you aren’t obligated to buy until your mortgage lender can unconditionally approve your home loan.
ON THE SALE OF YOUR EXISTING HOME
Most people cannot afford to buy another home until the one they’re in has already sold. If the timing isn’t right, you may find yourself the proud owner of two houses and a big financial mess.
It’s common to have conditions attached to an offer. And it’s better to have everything covered off before you sign the final dotted line. This is the biggest financial commitment you’re ever likely to make, so it’s important that you invest some time and money getting the answers you need. Your lawyer will be able to advise you further.
Once all the conditions are agreed to and have been met, you’re ready to go unconditional. Congratulations! You’re a homeowner!
For more information about buying a home, see Rosie Glasgow Home Loans, the mortgage advisers who can help you find a place to call home.