What do we ask a lawyer when buying a house?
Wednesday, 7 November 2018
My husband and I are older first-home buyers and others seem to expect us to know what we're doing because of our age, but to be honest we probably feel as clueless as the young couples we see at open homes. I know we need a lawyer, but I don't have the first clue what I'm supposed to ask them or what they're supposed to help with, apart from the actual contract paperwork. What tips can you give us?
First of all, congratulations on setting off to buy your first home. It's a big achievement, no matter your age. You're right in thinking that lawyers or conveyancers aren't just there to dot the i's and cross the t's on your contract. Your lawyer is a source of knowledge and advice, who can offer you valuable support throughout your property buying journey. We often hear from lawyers that a client has phoned at the 11th hour, having already signed a sale and purchase agreement, and just needs someone to push the paperwork through.
While some may choose to go down this road, I highly recommend you take full advantage of the years of industry experience your lawyer or conveyancer has to offer and ask questions that will help you make informed decisions when it comes to buying a home. If you're not sure where to find a lawyer, you can ask family or friends for recommendations or check out www.propertylawyers.org.nz (part of the New Zealand Law Society) to find one in your area.
When engaging a lawyer or conveyancer, here are some questions you should ask. Are you a conveyancing specialist? It might seem obvious, but you really do want a lawyer that specialises in property transactions and knows the ins-and-outs of what you're wanting to do. You may already have a great family lawyer, but if this isn't an area they specialise in, then look elsewhere – you could even ask them for a recommendation.
**READ MORE:
* What do I do about insurance?
* Why can't we buy this house?
* Is it a bad idea to sell a house in winter?**
How much do you charge? Different lawyers and conveyancers have different fee structures, and pricing can vary dramatically, so it pays to have a clear understanding of what they will charge you from the get-go, and when it will be due.
What clauses should I add? Your sale and purchase agreement can include clauses, such as a finance clause that means the offer is subject to you getting loan pre-approval from your bank. Talk to your lawyer about your individual circumstances and what clauses should be included in your contract, in order to best protect yourself. Talking about this early on will save you time when it comes to making an offer and the real estate agent or salesperson asks what clauses you'd like in the agreement.
Can you explain the LIM to me? A LIM is a council file that includes all the information held about a particular property. These files can be chunky, complex and full of very detailed information about resource consents, zoning information, natural features that affect a property (like flooding) and more. Ask your lawyer or conveyancer to look over these documents and explain them to you, so you fully understand all aspects of the information. Your lawyer will know what to watch out for when reading through the documents and is the best person to spot any red flags for you.
What do I need to know about a unit title property? If you are buying a unit title property the seller must provide you with certain sets of information. Talk to your lawyer about the information you are entitled to and ask their advice on whether you should seek any further information.
Will you check my sale and purchase agreement before I sign it? Don't sign anything before your lawyer or conveyancer has read over it. Remember, a sale and purchase agreement is a legally binding document and there's no going back once you have signed on the dotted line. Buying a home is a big financial decision, so it's well worth taking the time to ensure you've done your due diligence and received the advice you need.
What will happen on settlement day? Settlement day is when the property transfer goes ahead and the house actually becomes yours. This day is the culmination of a lot of hard work and stress, but before you pop the champagne, a number of things need to happen in sequence between your lawyer, the seller's lawyer, and your bank or lender. This can take time, so it's a good idea not to be sitting outside the home at 9am with a moving truck. You can find a helpful settlement checklist on settled.govt.nz, the independent government website for buyers and sellers.
Kevin Lampen-Smith is the chief executive of the Real Estate Authority (REA), the independent government agency that regulates the New Zealand real estate industry. If you have a question about buying or selling property, send it to susan.edmunds@stuff.co.nz For independent guidance and information on buying or selling, check out settled.govt.nz.