Last week I brought you the answers to the most commonly asked questions by first-time house hunters. This week we will look at the questions you need to be asking once you have found your perfect home.
Buying a house is an exciting time but it’s important that you leave the emotion at the door and remember that this is likely to be the largest purchase of your life, so it is important that you get it right. All the reports and checks can seem expensive and time consuming, but it’s better to raise the red flags now, before it’s too late.
Where is my boundary line?
Do not rely on natural markings or the real estate’s guess to determine your boundary lines. Many homeowners have been caught out with plans to extend or erect a structure only to find out that what they thought was their land in fact belonged to the neighbour. Even if the house currently has a fence or driveway, it does not guarantee that the land is yours. The only way to confirm your boundary lines is with a Certificate of Title. The boundaries of your land were fixed by a land transfer survey when the land was first subdivided and cannot be altered without the landowner’s consent.
Do I need a Meth Test?
Absolutely. Unfortunately Meth houses are a big thing in Auckland. Just because you can’t see a chemical lab in the basement, doesn’t mean that it wasn’t once used for that purpose. The house may have since been renovated or decorated, but the potent residues can still linger on any surface. Always carry out full meth testing before you sign the Sale and Purchase Agreement.
The house looks fine, do I need a building Inspection?
As soon as you go unconditional, the small crack in the ceiling which has now fallen through becomes your problem. Building inspections are absolutely worth the money to check for weather-tightness, wiring, plumbing and foundations. You can negotiate the terms in your Sale and Purchase Agreement to correct any faults before the sale becomes unconditional. If you are buying at an auction, it is essential that you carry out all your inspections before you bid as as soon as that hammer comes down, there’s no backing out.
Condition/Unconditional? What does that even mean?
Once you have signed an unconditional agreement, you are legally bound to purchase the property at the agreed price and date. You are now liable for any damage, boundary rights and title discrepancies. That’s why it is essential to carry out full due diligence and seek the help of a good lawyer before you make your purchase. A conditional offer is a binding contract once all the conditions in the Sale and Purchase Agreement have been satisfied. Conditions may include approval of finance, repairs and approval of title. Your lawyer will help you better understand the conditions, but remember the less conditions outlined under your terms, the more desirable you will be to the seller when competing with other potential buyers.
What is a Sale and Purchase Agreement?
A Sale and Purchase Agreement is essentially a contract that outlines all the terms and conditions of the sale or purchase. It is decided by and agreed upon by both parties before it is signed. Once it is signed, it becomes a legally binding contract by which there are agreed penalties and repercussions should the contract be defaulted. For more information on Sale and Purchase Agreements, check out our blog.
Too many acronyms! What’s a LIM report?
Land Information Memorandums may seem like another costly report, but they hold all the official information about the property including storm water plans, flooding issues and previous structural changes. They will help you identify any previous problems with the property and potential roadblocks should you plan on extending in the future. A basic LIM report is usually part of the sale package, but it is recommended that you carry out your own and have your lawyer go through it with a fine toothed comb.
I’ve found the house, but can I afford it?
Hopefully you would have taken our advice and got a pre approval before you made an offer on the property. A pre approval will give you a better understanding of what you can actually afford and speed up the buying process. It will also help you avoid the disappointment of being turned down by the banks at the last minute. We never said buying a house is easy, but fortunately your mortgage adviser can sort the finance part out for you so you can concentrate on finding that dream home.
When do I need to pay up?
When both parties agree on the clauses in the Sale and Purchase, a deposit is paid to the real estate agent by the buyer. The agent usually takes their commission from the deposit when the offer becomes unconditional. It is important that you and your lawyer identify that all the conditions have been met as once the offer becomes unconditional, you will not get your money back should you change your mind. The agreement will also outline the settlement date where the buyer pays the rest of the agreed amount. The settlement date is usually also the day that the keys are handed over and you are free to move in.
Contact me today for all the answers to your questions and i’ll even get you a fantastic rate on your mortgage.