1. Talk to the bank first
Dreaming of buying that beautiful 6 + bed and bath mansion down the road from Bob’s house, well your bank (and ability to service a loan) might make you re-think your expectations. It’s important to have some idea of what you can afford, as it will save you from looking outside your budget, and the heartache of missing out on a property that you simply couldn’t afford.
When speaking with the bank, inquire about their current offers. Many banks provide cash incentives for new home buyers. This additional cash can assist in covering expenses such as legal fees related to your purchase.
2. Talk to your KiwiSaver provider and Kainga Ora
If you are wanting to use your KiwiSaver for a deposit, talk to your KiwiSaver provider first. Similarly with the Kainga Ora first home grant. You can apply for pre-approvals in advance, which will help you fine tune what you can/can’t afford.
3. Engage professionals early on
You will need to engage a lawyer, mortgage broker (or bank) and insurer. You may also need to engage a building inspector (once you have found a suitable property). Getting professionals involved from the start can alleviate some of the stress associated with purchasing a home. A lawyer can guide you through the legal process and review the contract on your behalf before you sign it, ensuring that your interests are safeguarded. A broker can secure the best deal for you, while an insurer is vital as you must provide insurance confirmation to your bank before your lawyer can uplift funds for settlement.
4. Budget
You should talk to your lawyer/advisors about some of the hidden costs involved in buying a home. Some of the things you may need to budget for are legal fees, third party reports (i.e. valuation, building and LIM reports), if you are using less than 20% deposit you may have to pay a low equity fee to the bank, moving costs, insurances and rates. There are a lot of costs that new home buyers are not aware of. Stay prepared to avoid any surprises during the buying process.
5. Do your homework
It is really important that you take your time to carefully look through the physical property (more than once), and that you do your homework on the property and the surrounding area. A key tip for any buyer is to find out how long the property has been on the market for, and whether there are any other interested buyers. If the property has been listed for an extended period, it might suggest an underlying problem, and you should seek legal advice.
Talk to your lawyer about what third party reports you should obtain i.e. LIM report, registered valuation, building and/or toxicology report. Your lawyer will be able to advise you on the legal and title aspects, but cannot advise you on the physical attributes of the property.
Purchasing your first home should be an exciting experience. To prevent unnecessary stress, engage a lawyer from the beginning. Contact BCH Law to explore how we can assist you in achieving your property goals.
By Sharna McElhinney | Solicitor
The information contained in this article is provided for informational purposes only and should not be construed as legal advice on any subject matter.
