What inspections should I carry out?
The same inspection process is typically carried out by buyers regardless of whether it’s a residential, commercial or rural property.
The buyer will typically want to have some or all of the following checks and inspections carried out before the contract is agreed:
Title search — this is usually done by the buyer's lawyer to check who the legal owner of the property is and to see if anyone else has any claim over the property.
Valuation report — normally required by a lender, this report is an estimate of the property's worth on the current market.
Land Information Memorandum (LIM) report — provided by the local council, this report provides information on things such as rates, building permits and consents, drainage and planning.
Building Inspection report — these are becoming more common and help determine how sound the building is and what might need to be repaired.
Engineer's report — similar to the above but more focused on the section and structure of the property.
What sort of deposit will I need?
Generally, the larger your deposit for a property, the more likely you are to get your loan application approved. In most cases, you will need at least a 20 percent deposit. For more information, contact your bank or a mortgage broker.
Conditional vs unconditional?
Conditional refers to the sale and purchase agreement having a set of conditions that need to be met, such as the buyer's existing property being sold, a building inspection being carried out, or finance being secured.
Unconditional refers to when all conditions in the sale and purchase agreement have been met. When a sale and purchase agreement becomes unconditional it is a legally binding document.
When does the buyer pay the deposit and full property purchase price?
When the buyers and seller have agreed on all parts of a Sale and Purchase Agreement, the buyer pays a deposit (usually 5 or 10 percent) to the salesperson’s trust account. The salesperson then takes their commission from the deposit when the contract becomes unconditional. The buyer pays the balance of the purchase price on the day of settlement – usually through their lawyer.
Points to consider when buying a lifestyle property
Where does the water supply come from – town, rain water tanks, bore?
What are the rates?
Is rubbish/recycling collected from the gate?
Where are the closest schools and bus routes?
How far to the nearest town?
Is there mobile reception here?
How fast is the broadband?
What services are available? – Is there a septic tank?
Which council/district body is this property under?
Could the property be subdivided in the future?
Points to consider when buying a farm
How many stock units can the farm hold in summer and winter?
Where does the water for troughs come from - bore, stream, well, tanks?
How many paddocks are there and are they centrally raced?
What is the state of the fencing?
What type of milking shed are on the property?
How many Fonterra shares are there with the farm?
Is it being sold as a going concern?
How much hay/silage is cut from the farm each year and from which paddocks?
What is the current cost of buying: weaner calves, yearlings, and heifers?
Who are the local stock agents?
Is GST involved in the purchase?
We are not GST registered and want to put in an offer that is GST inclusive - how do we do this?