The system for buying property in New Zealand is fairly straightforward and most people will use an estate agent to guide them through the process. It is not essential to be a resident to purchase a property in New Zealand. When you find a house that you like and you have agreed details (via the estate agent) with the seller, such as the price and the completion time frame, these will be put into a contract. There may be some conditions that need to be met, such as the purchaser providing proof of finance or a clear building inspection report being issued and the process can allow up to 10 days for this from the signing of this initial contract.

Once any conditions have been met then the contract becomes unconditional. This means that the purchaser can pay a deposit, which is usually equal to 10% of the purchase price and that both the seller and the buyer are now committed to the transaction. While this is happening the title to the property is determined by the lawyer(s) overseeing the transaction and if there is clear title to the property on behalf of the seller this means that there should be no problem with the property changing hands. The settlement date that was decided at the beginning is usually met with few problems and then the transaction can go ahead.

Before making the initial offer the buyer should have an independent valuation of the property carried out, as well as a building inspection. Another process that should be considered prior to making an offer is taking a look at the Land Information Memorandum, known as LIM. This is a document produced by the local authorities which details building consents, boundaries and other local issues. This can cost up to $400, depending upon the council, and you should also visit the council offices to double check the information in there. There is often more information available than appears in the document. A purchaser can also get a report known as Quotable Value. For a few dollars a buyer can purchase this report and find out the prices that other houses in the area have sold for, which can be helpful when you are making an offer.

Sales of property – providing there are no issues – can normally complete within 4 to 6 weeks in New Zealand, although if there are conditions to be met then this can take an extra couple of weeks.

There are fees to be paid on a property purchase. The buyer will pay fees to a solicitor but the seller is responsible for the fees to the estate agent and these are usually around 4% of the price of the property. Solicitors can charge up to $2000 for fees and there are also fees for registering the property, which can be a few hundred dollars. Many home purchases in New Zealand take place via an auction and it is estimated that around two thirds of homes can be purchased in this way. There are some differences between buying at an auction and buying through an estate agent. Firstly, all contracts are unconditional from the beginning, so if you place a winning bid on a home then you have to go through with the purchase. When you attend the auction you should expect to pay your 10% deposit on the day. A buyer should not go to an auction unless finance has already been arranged. You can have property inspections carried out prior to the auction so that you can be sure that the property is really one that you want to buy. It can also be worth making an offer to the seller prior to the auction if you do not want to wait. However, they are not obliged to consider it. All offers need to be unconditional and if there have been other interested parties the agent will have to contact them to see if they want to make a pre-auction offer. It should be noted that an agent can earn more from an auction sale than from a standard sale, so they may encourage the seller to stick with the auction process.

Following the process should avoid pitfalls as buyers have the opportunity to make themselves aware of any local issues or problems with the house before making an offer or going to the auction. The Land Information department of the government is the registration section for property. This is usually dealt with by the solicitor hired to handle the purchase of a property. The documentation for the property purchase can be submitted to the department electronically if preferred to the standard paper method. If you choose to use a solicitor then it should be remembered that their fees are in addition to those levied by the department.

A reputable solicitor can be found through the New Zealand Law Society.

Useful resources

The New Zealand Law Society
26 Waring Taylor Street
Wellington 6011
New Zealand
Telephone: +64 4 472 7837
inquiries@lawsociety.org.nz
http://www.lawsociety.org.nz/home/for_the_public/find_a_lawyer

LINZ (Land Information Department
phone 0800 665 463 (New Zealand callfree only)
email customersupport@linz.govt.nz
www.linz.govt.nz