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Buying and selling your property :
The sale or purchase of your own house may be the largest personal financial transaction you will ever make. It is, therefore, important that you know about the transaction, the form of documentation involved and the costs and expenses involved. The real estate salesperson is employed by the vendor (seller) to effect the sale of a property. The salesperson will advise the vendor on price and methods of selling. The vendor should keep in close contact with the salesperson who will advise on progress in marketing the property.
The Agreement for Sale and Purchase
A contract for the sale and purchase of a house should always be in writing. The form of contract will usually be prepared by a real estate salespersont, then signed by the purchaser and submitted by the salesperson to the vendor for signing. If you are involved in both the sale and purchase of a property, you must ensure that the settlement date, other dates for confirming conditions, and the terms of both contracts are complementary and that suitable clauses are included to protect you. Pay attention to the description of chattels in the contract and to all dates and conditions, Copies included.
The deposit
The contract will state how much deposit you will need to pay. Normally this is paid to the real estate agency effecting the sale, by cheque or electronic transfer. The deposit is a sign of good faith on the part of the purchaser. If the contract to purchase is conditional on, say, arranging finance or selling an existing property and these conditions are not satisfied, then the deposit is refundable in full to the purchaser. Once the contract is made unconditional the deposit is credited to the vendor as part payment of the total purchase price.
Costs of buying
(a) Government charges for title search and registration - usually handled by - paid for by the purchasers solicitor.
(b) local authority planning, building consent and general information search fees
(c) valuation reports ($400 approx ) and/or loan application fees ( $200, will depend on your lender )
(d) legal fees for completing the purchase and any mortgage documentation- $500-$600 + dispersments = $850 - $1000 approx.
(e) Government stamp duty on transfer documents (in certain cases).
The costs involved in selling your property include:
(a)Real estate agent's commission  approx 2 - 4% of purchase price, dependant on marketing plan
(b) Government charges by way of title search and registration fees on releases of any mortgages
(c) legal fees for completing the sale and discharging any existing mortgages. Up to $1500 for both sale and purchase?
Your solicitor will be able to estimate the approximate costs and fees involved in the transaction. Legal fees for a sale and purchase will vary depending on the complexity of the transaction and the number of mortgages involved.
The majority of residential property sales are exempt from G.S.T. However, to avoid any confusion the purchase price on the contract should be inclusive of any G.S.T. All fees, commissions and disbursements incurred will attract G.S.T.
Title to the property
Title to the property is held under the Land Transfer Act. Your solicitor will obtain/search a copy of the Title which will show the current owner's name and any charges or encumbrances, such as a right of way or drainage easement, which are registered against the Title.
Identification of property and location of house
The land boundaries are shown in the sketch on the certificate of title, and more specifically on the deposited plan, copies of which will be supplied to you. You should check carefully, particularly if you are purchasing a bare section, that the land shown in the Title is the land you are intending to buy. Difficulties can arise, particularly in older subdivisions, when buildings are not entirely within the section and encroach over the boundary into an adjoining property. If existing buildings appear close to any boundaries or if you have any doubts at all you should check the position with your solicitor as soon as possible. Remember that the vendor is not bound to point out the boundaries. You may need to consider having a survey done at your own expense.
Local authority requirements
When buying a property we suggest you talk to the local council . All local authorities now make available Land Information Memoranda which cover the usual range of preliminary enquiries. Wellington City Council will provide this for a fee of around $400 and takes 10 working days to complete it. For a lesser fee they will provide you with a Property Report taking 3 working days. OR Council can answer your questions over the counter.
Identify yourself as an intending purchaser of the property know its address and (if possible) its legal description and the present owners' surname. The enquiries you make will depend on whether you are buying an established house or a vacant section on which to build whether you intend making alterations to the property, and whether the area concerned is already well established, with regard to roading and kerbing, drains, sewers and power reticulation.
You should learn details of the zoning under the Transitional Plan and any proposed changes relating to the property and other properties in the immediate vicinity. You may ask
what can be built in respect of the zoning which applies
what may be built on adjacent properties which could affect you
what you can use the property and adjacent properties for, and the
Council's requirements are if you are planning alterations.
The Council Engineer should be able to advise whether there are sewerage or drainage problems in the area. You may want to know whether the Council has restrictions on the cutting down of existing trees. Is the Council aware of any instability affecting the land? Land which was formerly used for dumping, or any land where fill has had to be used, can be unstable. If you are purchasing a property intending to subdivide it you must confirm that you are able to do so without unacceptable conditions.
Or if you are purchasing a block of flats in a single title, intending to obtain separate title. Are there any health, drainage or building requisitions, demolition orders or upgrading orders on the property? Is sewerage connection available? Do public drains cross the property? Other questions you may want to ask Council include:Is street widening contemplated and, if so, how might this affect the property? Are any public works planned for the area?
If adjacent land appears to be a park or reserve, is it really so, or might there be some development there in the future?
What is the amount of annual rates which apply? If the property you are purchasing is one of a block of flats, is each unit separately rated or are units rated as a single dwelling?
If the property has a swimming pool, is it fenced in accordance with the Fencing of Swimming Pools Act 1987, or does the pool have an exemption under that Act?
In the Northern Suburbs we rarely come across any problems as these suburbs have been more recently established.
Finance for buying your property
If you are purchasing a property you may require mortgage finance. Your Mortgage Broker can explain to you the various sources of mortgage finance, terms and conditions for payment and lending criteria. If mortgage finance is required, the contract you enter into to purchase the property should be conditional upon you arranging suitable mortgage finance.
House owner's and house holder's insurance
The building itself (but not the contents) will usually be covered by what is often known as a House owner's" policy, which gives a more comprehensive cover than a simple fire policy.You should ensure that the cover is adequate check this from time to time as inflation may add to the value of your house. You may also consider what is known as "replacement" insurance. This involves paying a higher premium but covers not only the indemnity value of the house, but also its total replacement cost. This includes additional costs, for example, removing damaged portions and architectural fees in preparing plans for reinstatement. If you have a mortgage or mortgages, the mortgagee or mortgagees should be shown as the person or persons in whose favour the cover is held. Your first mortgagee may insist on holding the insurance policy as part of its security.
Insurance companies will require that any open fires, woodburners, have a certificate of fitness ( usually issued by a chimney sweep ).
The Householder's policy, covers the contents of your house, including carpets, drapes and furniture. Make sure that you notify the insurance company of your intended change of address, and that your household effects are insured during your move.
Mortgage repayment insurance
This type of life insurance assists the family while money is still owing on a mortgage. Upon the death of the person insured, the proceeds of the policy will be used to pay all or part of the mortgage debt Your mortgagee may lend you a further sum to cover the single premium payable under a mortgage repayment insurance policy.
General rates
Your solicitor and the vendor's solicitors are required to see that all general rates on the property are paid in full up to the date of settlement.
Power and Telephone connections
You arrange these directly with the appropriate power company and, Telecom there maybe some advantage to you in taking over the vendor's existing connection and phone number.
Settlement of the sale or purchase of the property
Settlement is the date on which the balance of the purchase price for a property is paid and the vendor gives possession to the purchaser. The exchange of cheques and titles is completed between the solicitors acting for the vendor and the purchaser. If you are purchasing a property you will need to lodge your funds with your solicitor before the settlement date. You should ask your solicitor before settlement what arrangements are being made for the transfer and uplifting of keys to the property. These will either be handed to the purchaser's solicitor at the time the balance of the purchase moneys are paid or left with the real estate agency for collection following settlement.
If you are selling a property you must vacate it no later than the settlement date. A vendor should also leave the purchaser a forwarding address for any mail. A "change of address" redirection can be registered with N.Z. Post at no charge for three months.
Legal formalities:
Immediately after settlement of the purchase of your house your solicitor will attend to the normal legal formalities of registering the transfer and other documents relating to your purchase, and will report to you. Registration of the transfer of ownership of the property and other dealings normally takes the Land Transfer Office some weeks to complete.