Your Legal FAQs about making an offer on a house in New Zealand

What does ‘drawing up an offer to buy a house’, mean?

Whether you’re buying a house with the help of a buyer's agent or working directly with the seller's real estate agent, both are trained to draw up the agreement and can insert conditions that you will need to satisfy as part of your due diligence requirements.

What are the typical conditions that are included in an offer?

Once you are ready to make your offer, talk to the agent about drawing up an offer that includes the following conditions:

Solicitors approval conditions

It is quite common to find that the agent will include a solicitor's approval clause in the agreement. Depending on individual agents and agencies these clauses can vary in what they include. While some approval clauses are broad in scope, enabling Solicitors to effectively rewrite agreements, others can be quite narrow in what they include and are limited to approvals around the “conveyancing aspects” of the agreement, which effectively limits how much your lawyer can make to an agreement. 

Regardless of the type of solicitors approval clause used, it is a good idea to have one included if you haven't had us look at the agreement first.

Finance conditions

You may have a finance pre-approval offer from a bank but this only means approval as to how much you can borrow. Your lender will still need to approve the finance for the specific property you are buying, so always have a finance condition in your offer, regardless of whether you’ve got a pre-approval or not.

Building report conditions

You definitely want a condition relating to a building report. This is a very expensive purchase so make sure you get the house checked out first by a reputable professional. We are here to help you with any issues that may arise. 

Land Information Memorandum conditions

The Land Information Memorandum, or LIM, is the report the council has on file about the house. Much like a building report, this is an important part of the due diligence and will tell us what records the council has for the property and whether there are any matters that would adversely affect your decision to proceed with the purchase. 

Insurance conditions

If the property you are buying is in Canterbury then it is usual to get an offer of insurance on the property before you confirm your due diligence is satisfied. If you are getting a loan from the bank then Insurance on the property is mandatory and because there have been a lot of earthquake-affected properties in the Canterbury region it is not a given that an Insurance company will be prepared to insure the property so getting an offer of insurance before going unconditional is critical in the Canterbury region.

EQC assignment clause conditions

Many properties in Canterbury built prior to the Earthquakes may have sustained Earthquake damage and often an assignment of the EQC claim will have been made by the Vendor (or the Owners before them). Talk to the Agent about including an EQC assignment clause which means you will have the benefit of any residual (leftover) rights that may be available under the existing EQC claims. 

How long does the offer process take?

With the exception of the solicitor's approval clause, most conditions are usually satisfied within ten working days of the date of the agreement. Where possible it is good to have fifteen working days (particularly if you are obtaining KiwiSaver). Your ability to negotiate a different time frame will depend on how much interest a Vendor has in their property. 

The solicitor's approval clause usually only needs two to three working days to approve.

If you are in any doubt about the above conditions or making an offer, feel free to contact Your Legal team and we can walk you through the process.

How much do you pay for a house deposit? 

If you are using cash to pay the deposit, then the seller (vendor) will usually want a 10% deposit, although the amount is negotiable. If you are using KiwiSaver for the deposit make sure you discuss this with the Real Estate agent so they can record that you will be paying the deposit from your KiwiSaver, as special rules apply to the use of your KiwiSaver for a deposit. Sometimes people use a combination of cash and KiwiSaver.

We can walk you through the process for this.

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