Getting your offer accepted is a massive moment. Then about 48 hours later, the questions start. What do I need to do? When does the bank need to confirm? What's unconditional mean again? This is the part of the process where clients feel the most uncertain and we’re here to hold your hand and answer the questions!
Here's a clear run-through of what happens between "offer accepted" and "keys in hand".
Conditional vs Unconditional
When your offer is accepted, it's almost always conditional to start with. That means the sale is agreed in principle, but there are conditions that need to be met before it's locked in. The three most common conditions are finance, a LIM report and a building inspection.
The finance condition gives you a set number of working days (usually five to ten) to get your bank to formally confirm they'll lend you the money. The LIM report provides all the information the local council holds on the property. And finally, the building inspection condition gives you time to get a professional inspector through the property.
The sale isn’t final until all conditions are satisfied by you, the purchaser!
At times there can be other conditions inserted into the agreement for the benefit of the vendor or the purchaser. It’s important that, regardless of the conditions, you have a lawyer check over anything before you sign!
What the Bank Is Doing During This Time
If you've already got pre-approval, this step moves faster. But the bank still needs to formally assess the actual property. They'll do a valuation — either a desktop valuation using recent sales data or a physical valuation (called a registered valuation) where someone visits the property. We will let you know well in advance if you are likely to need a registered valuation.
They're checking that the property is acceptable security for the loan. Most are. But occasionally a property can have issues - it might have a leaky building history, a title problem or zoning complications
Once the valuation is done, your adviser gets the formal approval. That's what allows you to go unconditional on finance.
Going Unconditional
This is the big one. Once you satisfy all of your conditions, the contract becomes binding. Your lawyer will handle this part. Now you and the vendor are committed - neither party can pull out without consequences.
Before you go unconditional, make sure you're actually happy with the building report and that the bank has confirmed the loan in writing. Don't go unconditional on a handshake - get it confirmed with your lawyer.
Between Unconditional and Settlement
Settlement is when you actually become the owner. In NZ, this is typically no less than a couple of weeks after the unconditional date, but can be virtually any date agreed upon by both the purchaser and vendor.
During this time your lawyer is doing the behind-the-scenes work - checking the title, arranging the transfer of funds, making sure the bank's mortgage is registered correctly. You'll need to arrange house insurance before settlement, because the bank requires it. Most lenders want to see evidence of insurance before they'll release the funds.
Your adviser will keep you up to date with what you need to get done in this window.
Settlement Day
Your lawyer handles the settlement. You don't need to be physically present. The bank transfers the funds, your lawyer transfers them to the vendor's lawyer, and the property transfers into your name. Usually all of this happens by lunchtime but can sometimes be a bit later in the day too.
Then you get the call - or the text - and you pick up the keys from the real estate agent!
One Final Thought
This part of the process moves fast and involves a lot of moving parts that you, as the purchaser, often don’t see - but trust your professionals and it’ll all happen smoothly!
If you're heading into this process and want to know what to expect, I'm happy to walk you through it.
Book a call with Adam here to learn more: https://www.mymortgage.co.nz/call-with-adam/
