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Purchasing A House – Its A Big Decision

February 28th, 2013 -

PURCHASING A HOUSE – IT’S A BIG DECISION

Purchasing a property is likely to be one of the biggest decisions you will make both in terms of value and size. This can be both exciting and daunting especially for first home buyers.

Before purchasing a second hand car most people will get this checked by a mechanic, make sure it is registered and has a current warrant of fitness. Therefore why would you not be as thorough when purchasing a property?

We strongly suggest that at the stage you are negotiating to purchase a property either through an agent or directly with the seller, you should obtain legal advice prior to signing any agreement.

As a purchaser there are a number of fundamental conditions you need to consider putting into any agreement that you sign.

Conditional upon Finance:

Some purchasers have obtained pre-approval from their bank up to a certain amount, otherwise the agreement should be made conditional upon your bank approving any funding you require to complete the purchase. The Bank may require a valuation of the property as part of it’s approval.

Conditional upon a Building Report:

This enables you to get the property fully checked by a qualified builder before committing yourself to purchasing the property.

Conditional upon a LIM:

What is a LIM? This is short for Land Information Memorandum which is a report obtained from the local City Council and provides all the details about the property that the Council holds on its file. This report will confirm such things as whether any required consents or permits have been obtained for building work completed at the property, for example, alterations to the house, construction of garages, carports, drainage work, electrical work. This report will also confirm whether there are other characteristics in respect of the location of the property, such as being in a flood prone area.

These are just some of the main conditions to consider. There are other considerations, for example, if the property is on a Unit Title or a Cross Lease Title there are other considerations and checks that need to be made by your Solicitor.

Although there are costs involved in obtaining builder’s reports, valuations and Land Information Memorandum reports, compared to the value of the asset you are purchasing this can be money very well spent now to give you peace of mind in the future.

We are very experienced in all aspects of Property Law and if you would like to discuss with us any aspects of purchasing a property you can contact us on smilne@farry.co.nz or (03) 477 8870

13th February 2013

S Milne, Partner, Farry & Co. Law Dunedin

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