Starting your search for a home can almost feel like starting a new job.
Everyone seems to be throwing around unfamiliar terms and acronyms that leave you going ‘huh’?!
Thankfully, we’re here to help.
Have a read and we’ll get you up to speed, quick smart! Even better, bookmark this page for future reference.
Vendor
The property owner who is selling their home.
Certificate of Title
Every property has one; it’s a legal document that outlines important information about a property including the name of the owner, the legal description, previous transactions and boundaries, rights and restrictions, such as an easement, covenant or mortgage.
Land Information New Zealand (LINZ) handles all land transfers and keeps Title records.
We recommend having your lawyer review the Certificate of Title before making an offer on a home (more on unconditional and conditional offers soon!).
Sale and Purchase Agreement
This is a legally binding contract between a buyer and selller for the sale and purchase of a property. It sets out all of the terms and conditions of the agreement.
Most real estate agencies use a standard “Agreement for Sale and Purchase of real estate” form, approved by the Real Estate Institute of NZ and the Auckland District Law Society.
Learn more about the Sale and Purchase Agreement and what it contains here.
Unconditional offer
An offer to purchase a property with no conditions or limits, beyond the terms outlined in the Sale & Purchase Agreement. An unconditional offer is legally binding, so if accepted, both the buyer and seller must proceed with the transaction.
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Conditional offer
Where a buyer offers to buy, or a vendor offers to sell a property where something must happen within a defined period, before the sale proceeds unconditionally. For example, a buyer makes an offer on the condition that their bank agrees to fund the purchase of that property.
Conditional offers favour buyers, because it allows them time to ‘lock in’ a home before they’re 100% committed to going ahead with the purchase (before proceeding unconditionally).
Settlement Date
The day where the sale and purchase of a property is completed – the final exchange of property and payment. Once settlement has taken place, the home is officially yours!
The settlement date is typically four weeks from the time the sale and purchase agreement has become unconditional.
Deposit
To secure the purchase of a home, you’ll likely need to pay a deposit to the real estate agent. It’s typically 10% of the value of the property, but it depends on what you’ve agreed to in the Sale and Purchase Agreement.
Cross-lease
While you’ve likely heard of a the term cross-lease before, it’s a commonly misunderstood form of title.
A cross-lease is there is more than one property on a piece of land. Each owner owns an undivided interest in the land (in shares) and leases the land and improvements (buildings) from the other owner/s.
A cross-lease title comes with a “flats plan”, which outlines areas of the land that are shared by all owners (like the driveway) and which areas are to be used exclusively by the individual owners.
In most situations, an owner must obtain their neighbours permission before any major building work or renovations take place, however the neighbour cannot unnecessarily withhold their consent.
Due Diligence
This simply means researching a property before committing to buy it. You can make an offer to purchase a property subject to due diligence.
You're covered!
If you’ve heard other jargon splashed around that you aren’t 100% on, let us know in the comments and we’ll sort you out.
