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The Purchase Process – What to expect

The purchase process – what to expect and the value your lawyer adds

Below is a helpful summary of the process of the purchase of a property and what a conveyancing/ property lawyer will do for you as the purchaser.

Pre- Agreement

It is always advisable to have a contract checked by your lawyer before you sign it, especially for contracts where there are amendments to the standard terms or there are uncommon Further Terms of Sale. However, many clients sign before having it checked by a lawyer due to time constraints. Which although may secure the acceptance of an offer, can lead to purchasers being locked into badly written Agreements.


If you have found a property to purchase without an Agent and you want your lawyer to draw up the Agreement for Sale and Purchase for you, this can be done so long as you give your lawyer the necessary details – the property address, who the vendor is, what you and the vendor have discussed as a purchase or price and settlement date. Your lawyer can then ensure that the appropriate conditions are entered into the Agreement to protect you.

If you are purchasing through an Agent and want us to act for you, you would put down the name and details of one of our property team on the back details page of the Agreement for Sale and Purchase. The members of our property team can be found by looking on our website under ‘Contacts’ or by emailing our support team. It is best to either email or call to check that the lawyer you have chosen is available to do the work.

Your solicitor will then receive the contract, either from the real estate agent and check through it, noting such things as: the purchase price, deposit, the key dates for the satisfaction of any conditions, the settlement date and the terms and conditions of the contract.  After checking these details with you, your lawyer will then start the process of getting the conditions (if any) ticked off. The purchaser needs to arrange such things as their finance, insurance and a building report. Your lawyer will require you to send them the insurer’s certificate of currency and your lender’s letter of confirmation of funds. Both documents need to specify your full name(s), the address of the property being purchased, and the dates of cover. The solicitor will do such things as order and check the LIM Report and title and report to you on the key information. Your solicitor will also check through the EQC and insurance claims information where applicable.

Going unconditional

Generally, once all the conditions for an Agreement have been satisfied (ie the Agreement is signed by both parties and the conditional period for being satisfied with the LIM, finance, insurance etc is up), the contract becomes unconditional. (An agreement signed at auction will also be unconditional due to the finance and other such matters having been satisfied and ready by the purchaser before bidding).

Once unconditional, both parties are then essentially locked into the agreement and the purchase will be going ahead. In practice, the deposit is usually paid when the contract becomes unconditional – to the trust account of either the vendor’s solicitor or the real estate agent.

The lawyers for each side then begin preparing what is necessary for the transfer of title. The lawyer for the purchaser sets up the edealing in the Land Information New Zealand online database (LINZ) (an online dealing that transfers the title from the vendors to your names using the online property system).

The vendor’s solicitor sends their settlement statement – a document that goes through how much money in total is required to purchase the property. Usually the final settlement figure would be made up of the purchase price minus the deposit (if paid), and the apportionments of rates between the parties. The purchaser reimburses the vendor for the amount of rates for each day they are in the property that the vendor has already paid for (for instance, if the vendor has paid the whole of the 4th instalment of rates but settlement occurred midway through that instalment, the purchaser would reimburse the vendor for the rates paid from settlement to the end of the instalment). It is all accounted for in the final settlement amount.

Your lawyer go through the following with you before settlement in order to have everything in place:

  • Your loan documents sent to them by your lender. Your lawyer would then prepare and advise you on the loan agreement before you sign them. The lawyer has an obligation to both you and the bank and has to protect the bank’s interest by ensuring that they have fully disclosed the loan details to you so that when you sign them, you are fully informed.
  • Other settlement documents that must be signed before settlement such as the signing of a Client Instruction and Authority form and the Deed of Assignment of EQC claims.
  • Your lawyer will go through the finances with you. This includes going through the settlement statement and a trust statement. A trust statement shows the debits and credits for your matter, with credits being such things as a mortgage advance or funds for the purchase received from you, and debits include such things as disbursements, legal fees, and other costs. The trust statement will show you how much you need to transfer to your solicitor’s trust account by the settlement day in order to settle. It is common practice for all costs and fees, and of course the settlement figure to be deducted from the settlement funds provided. If any extra funds are needed from you to top-up the amount you’re receiving from the mortgage, your solicitor will give you advanced notice as the solicitor will need those funds in their trust account as cleared funds at least one day prior to settlement, to ensure they have them there ready to be used. It is imperative that all funds are ready to be used as any delays in settlement caused by the purchaser will incur penalties.

Settlement day

On the settlement day, your solicitor will receive confirmation from the bank that the loan amount agreed to has been transferred to the firm’s trust account. Your lawyer will then ensure that the settlement funds required by the vendors has been transferred to their lawyers trust account and undertakings that this transfer has been done will be sent. All costs will also be paid off such as LINZ fees, rates, legal fees and other disbursements if applicable. Once the vendor’s solicitor has received confirmation of the settlement funds being received, they must authorise the release the keys to you and also release the title on Land Information New Zealand so that your names go on in place of where the vendor’s names had been. Your lawyer would ensure that the names are changed and that the mortgage is registered. The property is then yours!

Having an experienced and dedicated property lawyer is vital in ensuring that the purchase process goes as smoothly as possible and that your interests as the purchaser are protected.

Published by
Charlotte Grimshaw