What you’ll need to do to get the deed done

23 February 2018

Your property dream is about to become reality and it’s nearly time to celebrate! 

You’ve come a long way! You may have scoured endless listings, traipsed through open homes, navigated stacks of paperwork, survived negotiations and your offer has been accepted — the house is almost yours. 

There are still a few things to be organised before the deal is finalised, though. Fortunately, your lawyer can take care of a lot of the details. Here’s our guide to each step of the house settlement process.        

What happens in the lead up to settlement day?

Settlement day is a key step in the home-buying process, and the day when legally the ownership of the property changes from the previous owners to you. Yes!

Luckily for you, there isn’t much you need to do on settlement day as most of it will be taken care of by your lawyer.  Before settlement day, however, there are a number of things to take care of to ensure settlement day goes smoothly:

  • Getting insurance for your new home.  Adequate house insurance is often a condition set by the bank before they will lend you money. An Insurance Adviser or Broker can help ensure you have the right insurance. Find out more about Home Insurance and Life Insurance. Make sure you ask for a ‘Certificate of Insurance’ and give a copy of this to your lawyer, as it is critical to have proof of insurance as part of the bank releasing your mortgage funds to purchase your new home.
  • Checking your money from your KiwiSaver account will arrive on time.  Make sure you have sorted out your KiwiSaver first home withdrawal with your provider if you’re planning to use some of the funds for settlement — get the payment organised at least 15 days before settlement.
  • Connect or re-direct utilities:
    • Water
    • Gas and electricity
    • Internet / telephone
    • Pay TV
    • Mail / newspapers

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What happens on settlement date?

On settlement day, you need to pay the rest of the purchase price (the value of the house minus what you’ve already paid as a deposit). In most cases, the money will be coming from a bank or a mortgage lender. The lawyer will take care of drawing down your loan from the bank.

Your lawyer will also register the change of ownership from the vendor to you and register the lender’s mortgage on the title.        

Pre-settlement inspection

As the buyer, you have the right to inspect the property before the settlement date. This is to make sure there are no nasty surprises and ensure the house is in the same condition as when the agreement was declared unconditional. It’s in your best interests to do this, even if it seems like an inconvenience for you and the seller. It’s better to discover potential issues now than later on. You can arrange an inspection with your real estate agent.

What to check at a pre-settlement inspection

Organise an inspection a couple of days before settlement — try not to leave it any later. If you do discover any issues, it could take some time to get sorted. The following pre-settlement inspection checklist might help. Among the things to check for are:

  • The property is in the same condition since the sale and purchase agreement was signed — i.e. there is no new damage.
  • That the appliances and fixtures work properly.
  • Chattels: The seller is obliged to leave light fittings, stove, floor coverings and other chattels on the chattels list within your sale and purchase agreement (such as alarm systems, heated towel rails). This inspection is your chance to check the chattels are there and in the same condition as when you signed the agreement.
  • Vacant possession: Unless the property is being sold tenanted, the seller is required to give the purchaser vacant possession before settlement.  It’s important to remember — if the house is tenanted, the tenants must have at least 48 hours’ notice of an inspection.

If you find problems with the property during your pre-settlement inspection, contact your lawyer straight away and get advice on the next steps.   

Using your KiwiSaver savings is a great way to help you get into your first home quicker. Talk to an Adviser about joining or switching to the AMP KiwiSaver Scheme.

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AMP Wealth Management New Zealand Limited is the issuer of the AMP KiwiSaver Scheme. For a copy of the AMP KiwiSaver Scheme Product Disclosure Statement or Fund Update Booklet please visit amp.co.nz.

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