First Home Buyers Glossary
We understand that buying your first home can be a daunting process – especially when some of the terminology may be foreign. Here at Pier Law, we’re here to help and simplify things as much as possible. Here’s a quick glossary of terms commonly used and what they mean:
Agreement for Sale and Purchase
The base Agreement (also known as “the Contract”) which regulates the dealings between the parties and sets out default rights and obligations of both seller and buyer.
Terms inserted into the Contract to give the purchaser (and the vendor) time to ensure they are overall happy with the property, before they commit to the transaction. Conditions commonly include finance, insurance, building report, title and Land Information Memorandum, however can be tailored to meet an individual’s needs. For more information on how conditions operate, click here.
This is the term used to cover the buying and selling of residential property.
This is paid to the Agent or seller’s lawyer when the Contract becomes unconditional and can either be a specified amount or a percentage (commonly 10%). It is important to discuss with your lawyer in advance where this money is coming from i.e. whether it is from cash in your bank account or from your KiwiSaver funds.
First Home Grant
For first home buyers that meet certain criteria, the Government will provide a Grant to assist with your purchase (ranging between $3,000 and $5,000 per person for existing properties and $6,000 to $10,000 per person for new builds). There are strict criteria and procedures that are involved, so we suggest you speak to your lawyer at the start, who can assist with this process and applications.
That 3% to 10% that is taken from your pay each week is put into a pool. This pool can be, in certain circumstances, used to help with purchasing your first home. Again, there are strict requirements and your lawyer will be happy to assist with this process.
This is security that your Bank will take over your property in exchange for lending you the money to complete the purchase.
The buyer – the person that is looking to purchase the property from the seller.
The point at which you have satisfied your conditions and you are now bound to complete the transaction.
On the specified date, you will complete the transaction – the balance of the money and property changes hands, which is facilitated by the lawyers. Possession of the property is also given at this time. Celebrations are recommended.
The seller – the person that is currently the legal owner of the property.
To download our First Home Buyer Checklist, click here.
Article written by Tita Elliott.