Home Buyer: Found the house?

So far in the home buyer series we’ve explained the things you need to do in the lead up to finding your dream house. To recap, make sure you understand how home loans work, are familiar with the different types of property ownership, know what goes into pre-purchase due diligence, and understand sale and purchase agreements.

In this instalment we’re going to talk through everything you need to do when you’ve found the house you want to buy.

We’ve said it a lot in this series, but the first thing you want to do is make sure you’ve got pre-approval sorted. When you’ve got pre-approval for your home loan, you’re able to go forward in the process with certainty about what you can spend. Now that you’ve found the house, get in touch with us so we can make sure it meets any requirements we might have. If you haven’t yet applied for your home loan, read our tips or apply now. If you’re planning on using your KiwiSaver savings, then get an updated balance estimate from your provider and check your eligibility for a First home grant.

If you’re certain this is the house for you, you’re likely to have done a lot of research. But just to be sure, here are some things to think about:

• Does it meet all your must-haves and nice-to-haves? This is something we talked about in our guide to house hunting.
• Is the home well insulated?
• Have you seen it on cold dark days, not just sunny days?
• Will the house suit your needs in the near future?
• Does the house need any alterations? If so, can you afford this cost?
• What’s the area like?
• Is it close to public transport?
• What are the local schools like?

Make sure you’ve done your own research, and haven’t just relied on the real estate agent. While they should be honest and helpful, they work for the seller, not for you.

It’s time to engage your lawyer. If you don’t have one, ask your family and friends for recommendations. If you need help finding a lawyer, take a look at the New Zealand Law Society website. Let them know you’ve found a property you want to buy and send them the sale and purchase agreement.

If the house is being sold by negotiation or advertised price, then it’s time to make an offer. Make sure you only offer up to the amount the bank has pre-approved you for.

When you purchase a house, you make the offer through a sale and purchase agreement. This includes the details about the house, the offer price and conditions you’ve specified. Read the last instalment to learn more about sale & purchase agreements and the process of offer > acceptance > conditional > unconditional > settlement.

Due diligence allows you to thoroughly understand the home you’re buying. To start – make sure you’ve done all your informal research early on in the process. This research is usually free so it makes sense to do it before you make an offer, or spend money on formal inspections. When you’re certain you’ve found the property for you, it’s time to undertake due diligence – this helps you understand what you’re buying.

If the house is going to auction, make sure you undertake your due diligence beforehand as if you win the auction, the purchase is unconditional immediately. You can read more about this in the previous home buyer post.

In the next instalment we’ll look at the different ways to structure a home loan.

Read the rest of the home buyer series.