There is a common misconception that conveyancing is ‘easy’ and that you should be able to get your house purchase done ‘on the cheap’ by anyone claiming to be competent in this field. In this post, we will try to bust a few of those myths and at the same time, explain a few of those confusing terms which you will hear used often in connection with your house purchase.
To many, the term ‘conveyancing’ itself is a confusing one. After all what exactly does it mean? Put simply, it is the process by which we, as your conveyancing lawyer, help you ‘convey’ or transfer ownership of a property from the existing owner (the vendor) to you (the purchaser) as the new owner. At the same time, in the vast majority of cases, we will also be instructed to act for your bank to register
This again is an area where many
You see, when you finish paying off your loan(s) to the bank and you no longer owe any money to the bank, you have in fact cleared or paid off your loan, but the security for that loan is a different issue altogether. The mortgage you hear referred to is the security registered by your conveyancing lawyer to give your bank security for the money it has advanced to you by way of loan. In order for the ‘mortgage’ to be removed once you have repaid the loan in full, it is necessary for someone to write to your bank requesting that the mortgage security be released. Once you have paid off the loan and discharged or removed the mortgage from the title, you can truly be said to be ‘mortgage free’.
In some cases, even though your loan has been repaid, it is still a good idea to leave the mortgage security in place on the title. If, for example, you were contemplating buying an investment property or upgrading the kitchen or the bathroom in your home, you might want to borrow funds from the bank to help with this. Having the mortgage still in place over the title saves you the time and money of registering new security for the further advances, whatever the purpose of those advances might be.
The phrase ‘equity’ is another term which often confuses some people. The equity you have in the property is calculated by taking it’s current market value of your home and deducting any loans you owe to your bank. The net figure you arrive at will represent the equity which you have in your home.
This can become particularly important if you wish to buy an investment property as a part of your retirement plan. In many cases, rather than having cash savings to put toward the deposit, you might borrow against the equity you have in the family home. The purchase price is often therefore 100% borrowed, partly against your ‘equity’ in the family home and then partly against the security of the investment property itself.
If you want conveyancing done well, and everything explained in Plain English by an experienced practitioner with 30 years’ experience offering guaranteed fees at competitive rates you don’t need to look any further. Just enter your details on our contact page and we will get back to you, usually within 24 hours at the latest.
THE VENDOR DIDN’T CLEAN THE HOUSE
So you bought a house and the vendor didn’t leave it clean and tidy. It’s a story we hear all too often. A vendor doesn’t bother to clean the house properly and sometimes, not at all. Surely there’s a legal obligation to leave a home neat and tidy and to give it a proper clean. Right? Sadly, no there is no legal obligation contained in the widely used Auckland District Law Society form for the sale and purchase of property to leave a house clean and tidy.
BUT SURELY THERE’S A MORAL OBLIGATION
Most reasonable vendors will leave a home in a clean and tidy condition for the new owners. But if they do not do a proper job, or just don’t clean the house at all, legally, you don’t have a leg to stand on once settlement has occurred.
IF THERE IS EXTENSIVE RUBBISH AROUND THE SECTION
Sometimes a purchaser will tell us prior to settlement that there is rubbish on the section, sometimes even car bodies or parts. If you buy a home where there is extensive rubbish on the land or in the home and you want it removed prior to settlement, have your agent make this a condition of the contract.
PUT IT IN THE CONTRACT
Likewise, if you would like the house left clean and tidy before you take over, have the agent write in the agreement that it is an essential term of the agreement that the vendor leave the home in clean and tidy condition. That way, it becomes a contractual obligation, which can be enforced. If the vendor fails to leave the home clean and tidy prior to settlement or fails to remove that rubbish from around the section, we can require retention until it is done, or sometimes a deduction to allow you to get it done.
If you want quality legal advice from a specialist Christchurch conveyancing lawyer give me a call or go to our contact page and drop me a line and we will get back to you within 24 hours. We have 27 years’ experience helping clients with the conveyance of their new home purchase.
SELLING AT AUCTION
Selling property at auction has become almost the norm these days. From a vendor point of view it is often a clever ploy because if there is anything at all dodgy about a property it forces the buyer to do their due diligence and maybe ‘take a punt’ on that unpermitted old conservatory or load bearing wall removed without consent! If buying through the usual conditional contract structure a buyer is more likely to require a vendor to deal with such issues by obtaining a ‘certificate of acceptance’ from the relevant council or for older structures, having a report from a qualified professional added to the LIM file. From a purchaser’s perspective however, it can be an expensive exercise if you do a full due diligence exercise on a property at your own expense.
Vendors via their agent will traditionally provide a Land Information Memorandum (LIM) and sometimes, but not always, a building inspection report. For Canterbury properties it is also now common for all relevant EQC and Insurance related information pertaining to the earthquakes to be provided too. Of course, for a purchaser all of this means having a lawyer look through the auction pack and advise if there are any obvious issues with the information provided. It often adds up to in excess of 100 pages of information to be digested and reported on.
It might also mean a purchaser obtaining a building inspection report at their own cost too if one is not provided and you feel it sensible to obtain one or your lender requires one. As a purchaser it is also necessary to have your finance 100% sorted and, having insurance in place from the fall of the hammer if successful. For obvious reasons, if buying in Canterbury, having insurance in place is absolutely vital! On occasion you may even need a valuation for your lender. For first home buyers there is also the need to make sure you have Kiwi-saver preapproval and Homestart too if hoping to use those sources of funding.
FREE AUCTION REPORT
We won’t sugar coat it, if your conveyancing lawyer does the due diligence on the information provided properly and does not just give it a cursory glance, there is a bit involved. But if you are unsuccessful at auction two, maybe even three times and you get a bill from your lawyer for say $400 plus GST every time, it can get expensive very quickly. Add to that the possible cost of a building inspection report and valuation and you could be considerably out of pocket after a failed bid at auction.
so one of the services we offer for those looking at a property conveyance at auction is to review the particulars and conditions and all associated information and provide a written report, at no cost to our client. When you add that to the fact that when you are successful at auction our price for your conveyance is guaranteed once advised to you, and we have a lot of happy auction buyers. In our experience, the vast majority of people for whom we perform this service remember us and come back to us for their conveyancing when eventually successful, whether at auction or otherwise.