Found a property you want to buy? Here's what a sale and purchase agreement is, what to look out for, and how your lawyer and mortgage adviser can help.
A sale and purchase agreement is a legally binding contract. Even if it's a commonly used form, the terms and conditions can have a big impact on you. Your lawyer or conveyancer should check the agreement, explain your obligations and advise you on the conditions you need before you sign.
It's the written contract between a buyer and seller that sets out the agreed terms of a property purchase. A commonly used agreement is often prepared through the real estate agent, but different forms and additional clauses can be used.
Real estate agent: helps communicate offers and negotiate terms with the seller. The agent usually works for the seller, although they must deal fairly with buyers.
Lawyer or conveyancer: reviews the contract, advises on legal risks and conditions, and manages the legal process.
Mortgage adviser: helps with the finance side, including timing for bank approval and what the lender may require.
Conditions are requirements that need to be dealt with by specified deadlines. An offer can be conditional or unconditional. Your lawyer will advise which conditions are appropriate and what they mean for you.
If you're borrowing to buy, the bank may need to approve the property as security and confirm that all its lending requirements are met.
How we help: we'll discuss how much time the lender is likely to need and recommend a suitable finance timeframe to discuss with your lawyer. Your lawyer will advise on the actual wording and deadline in the agreement.
Depending on the property and your situation, conditions might relate to a building inspection, LIM, title, valuation, sale of another property or other due diligence.
Your lawyer will help you decide which checks and protections you need and explain how the conditions operate. We won't draft or interpret those legal clauses.
Pre-approval usually relates to your financial position. It doesn't automatically mean the bank has approved the particular property you're buying. You may still need a finance condition and time for the bank to complete its assessment. Read our Pre-Approval Explained guide.
The word deposit gets used for two different things during a purchase. They are related, but they're not always the same amount.
This is the amount recorded in the sale and purchase agreement, payable at the time specified in that agreement. It might be due when the agreement is signed or when it becomes unconditional.
It's often around 10%, but the amount and timing can be negotiated. Your lawyer will explain exactly when and where it needs to be paid.
This is the full amount of your own funds going towards the purchase, such as savings, eligible KiwiSaver funds and any accepted gifted contribution.
The contract deposit forms part of this amount. Any remaining contribution is generally arranged through your lawyer for settlement, alongside the mortgage funds.
Tell your lawyer and mortgage adviser before signing. You may not have enough cash available to pay a large contract deposit straight away, even if your overall home deposit is sufficient. Your lawyer can discuss the deposit amount, timing and any clauses needed, while we help coordinate the lending side. KiwiSaver withdrawal timing and requirements need to be checked with your provider and lawyer.
We'll help coordinate the finance approval and lender requirements. Your lawyer guides the other conditions and tracks the contractual deadlines.
Once the conditions have been satisfied or otherwise dealt with under the agreement, your lawyer advises on confirming the agreement unconditional. This is an important commitment.
Your lawyer arranges the legal and payment steps for settlement, including the balance of your contribution and the mortgage funds.
The exact process and deposit payment date depend on your agreement. Your lawyer will explain what applies to you.
We'll discuss your borrowing position, whether the property is likely to need additional lender checks, and how much time may be needed for finance approval.
We'll send the relevant information to the lender, work through any finance conditions, keep you updated and coordinate with your lawyer so they know when finance has been approved.
Your lawyer remains responsible for legal advice, reviewing the agreement, advising on contractual conditions and confirming the relevant contractual steps.
For independent consumer guidance, read the Real Estate Authority's sale and purchase agreement guide.
We can help you understand the finance side before you commit, and work alongside your lawyer to keep the lending process moving.
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General information only. Personalised advice depends on your circumstances.
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