The Home Loan Factory Guide to Signing A Sale & Purchase Agreement in NZ

The Sale and Purchase Agreement (S&P) outlines terms between the buyer and seller

Disclaimer: The below guide is general in nature and do seek individual financial advice to see how this applies to your situation. Our experienced advisers are on hand to help at no cost to you (T’s and C’s apply)

The Sale & Purchase Agreement (S&P) outlines terms between the buyer and seller, serving as a binding agreement.

Whether you're a first-time buyer or an experienced investor, understanding the S&P signing process is vital. Here's a guide to help you navigate this process in New Zealand.

This assistance is general in nature, always consult your mortgage adviser AND your solicitor/lawyer before signing any contracts.

Bring in the professionals: Before signing any sale and purchase agreement, consult experts who understand the process. A lawyer, solicitor, or conveyancer (relatively interchangeable terms for our purposes) specializing in property law can guide you, review the S&P, and safeguard your rights.

Your adviser can recommend a certain amount of days that you should put for finance, with the remaining condition recommendations being supplied by your lawyer.

Main S&P Components:

• Price: Agreed property price. Once you have both agreed on the price, it cannot be negotiated further without cause, see your solicitor for more info.

• Deposit: Amount and payment details. This is not related to the amount of deposit you have for your finance. This is the deposit that gives the seller confidence that you will go through with a deal. For example, if a buyer wanted to back out of a contract, losing a $1,000 deposit would be easier for a buyer to take than losing a $100,000 deposit. Therefore a higher deposit is better for the seller.

  You are able to cross out the deposit amount on the contract and put any dollar figure or percentage you require. We generally advise, where possible, not making the deposit any more than you have available in liquid funds, EG: Savings in your bank account.
  
  This deposit is only paid once all conditions are met and your solicitor gives the go-ahead.

• Conditions: These are requirements to meet before going unconditional on the contract. If these are not met, then it is likely that you do not need to continue with the contract - but always check this with your solicitor.

  Typical S&P conditions are:

  1. Finance Condition: This is the amount of time, in working days to take your current conditional offer with the bank, satisfy all the conditions, and make it unconditional . Your adviser can guide you around this.

  2. Building Inspection Condition: This is not usually a requirement of finance but can be something to consider.

  3. LIM Report Condition: Review of the local council property report. This is handled by your solicitor who will advise around anything the report brings up.

  4. Title Review Condition: Similarly to the LIM report, this is also handled by your solicitor who will make sure there are no issues with the title.

  5. OIA Conditions: This is only if none of the buyers are legal residents of NZ. If you have a NZ passport or resident visa, this will likely not apply to you.

• Settlement Date: This is when ownership transfers from seller to buyer. This can be an exact date (EG: June 1st 2025) or a certain amount of days after an event (EG: 10 days after receiving council consent), or by mutual agreement.

• Chattels: The items that are included with the house, eg: heat pump, oven, curtains, etc.

• Title and Ownership: Confirms property's legal status

Seek Expert Advice: Throughout this process, professional legal and financial advice is crucial for understanding your role and responsibilities.