When buying a property, there are a bunch of important things that happen in the background but rest assured there are a team of professionals you can assemble who will deal with all this stuff so you can just focus on getting the house!
1) Mortgage adviser
We may be biased but we reckon it’s always a good idea to get a great mortgage adviser on your team! So what exactly does a mortgage adviser do? A mortgage adviser typically will look at your overall situation and make their best recommendations for you based on what you want to achieve. Mortgage advisers are paid by banks for bringing them business, so there is usually no fee for you to use their services - win/win!
When buying your first home, a mortgage adviser will walk you through the entire lending process. They’ll give you an idea about how much you can borrow, get a pre-approval in place, arrange loan offers from the best home loan providers (mostly major banks), negotiate your interest rates and cash back offers, recommend the best loan structure for you, liaise with all the other people involved in the transaction and keep in touch once you have purchased a home to continue to make sure you always have the best loan structure for your situation.
A good mortgage adviser will also tell you if you aren't quite ready to buy and put a plan in place to help you get there. It may be that we need a bit more deposit or clearing some other debt first. Either way, if you are planning on buying your first home we recommend getting in touch with a mortgage adviser before doing anything.
2) Real estate agent
Once you get your pre-approval (woo-hoo!) it’s time to house hunt. Once you’ve found what you are looking for a real-estate agent will be involved. Most people understand the function of a real-estate agent. They basically facilitate the transaction of a property and will be the ones who will assist you in making an offer.
A real estate agent will provide a sale and purchase agreement.
3) Solicitor or Conveyancer
During the negotiation process, a solicitor (or sometimes a conveyancer) will need to get involved. They will usually look at the sale and purchase agreement before you sign it, recommend inserting any conditions based on your situation and the property etc.
Your solicitor or conveyancer will be involved throughout the process, liaising with the vendor's solicitors to ensure each party meets its obligations set out in the sale and purchase agreement.
Later on in the process they will handle settlement day, ensuring funds are transferred to the appropriate places etc.
If you are using Kiwisaver to purchase your home, your solicitor will be involved in helping to withdraw it prior to settlement day.
4) Registered valuer
Depending on your financial situation and the property you are purchasing your bank may require a registered valuation. This is usually organised by your mortgage adviser. In most cases you cannot appoint your own valuer as this process needs to be independent.
A registered valuation is usually required by the bank to make sure that the property is worth a certain amount so that you are within loan-to-value ratio limits. You can read more about that here.
A valuation is also always required with a deposit below 20% and can be required in certain circumstances with more than 20% deposit.
5) Building inspector
We always recommend having a building inspector look at the property you are purchasing before finalising the transaction. Usually you would include a condition on your sale and purchase agreement so that you can have this done before finalising the purchase. Your solicitor will make the best recommendation here.
A building inspection is done to ensure the house is in safe and sound condition, and so that you are aware of anything that may need remedial work. It will often include a meth test to make sure methamphetamine is not present in the property.
The report should go to your solicitor to look over so that they can inform you of anything that you may need to be aware of but you also need to take a good look through to make sure you are happy with the state of the property you are purchasing.
6) Accountant (for business owners, self-employed and rental property)
Occasionally an accountant may be involved in the sale process if you are a business owner, self-employed or looking to buy a rental property. They will help prepare financial statements you may need etc.
It takes a lot of background work in getting your home across the line but just remember there are a team of professionals ready to guide you through the process and handle the tricky bits, and the best part is you usually start off the journey with a mortgage adviser like us!
Check out Part 4: What’s it all going to cost?