Checking property meets bank lender criteria

Sign on the dotted line

You've found a house! What next?

After going through house after house, you’ve finally found one that you want. But what are the next steps to making sure that this house is right for you, and how do you get it?

Check that the lender is happy with the property

You’ve probably got a conditional approval, but before you can make a firm offer, you need to confirm with the lender how much they’re willing to lend on this property.

If all else checks out, you can make an offer conditional on finance, and this is where you would confirm financing with your lender.

Hopefully, you’ve also already checked whether you're eligible for support in buying a home (especially if it’s your first home), for example using your KiwiSaver savings or Kāinga Ora Grants.

Talk to your lawyer

Before you submit your offer to the vendor, consult your solicitor. If you don’t have a solicitor yet, check out our guide about finding a solicitor in our Useful Links tab below.

They’ll provide much needed support at this stage of your house buying process, ensuring that you’ve completed your due diligence on the property (e.g. checking the LIM report), and checking that your offer contains all the conditions you want to include (unless you’re planning on going unconditional, which you should also consult your lawyer about).

Complete your checks on the property

These checks can be completed during your due diligence period (see Conditional vs Unconditional offer guide here) however if these documents are on hand already, it won’t hurt to review these before you make an offer

Title Search

The Certificate of Title is the legal document that records the boundaries of the land and any restrictions on its use. Examples of restrictions of use may be the ability to build more houses on the section, or maximum building area, which may give you problems if you’re wanting to add a deck or extension at a later date. Your lawyer should advise you of all these things as part of your due diligence.

If you’re buying at auction, where the sale is deemed unconditional, you will be provided with copies of the LIM report and Certificate of Title when you register your interest with the real estate agent.

Talk to the council

Check with the council to see the zoning around the house and whether there are any changes or developments planned in the area. This should be available online, but if not, you should be able to contact the planning department easily to obtain the information.

Check the LIM (Land Information Memorandum)

A LIM contains all the information about the property that the council formally holds. This will include building consents that have been issued, erosion or subsidence, roads and flooding or any contamination of the land that is known. These reports are available from the council.

In some instances a real estate agent will have copies to provide to you, but if they don’t have a copy available, you will need to order your own, which may take time to come through, so get onto this as soon as you can.

Check the valuation

All homes have a Rateable Valuation (RV) which is a quick way to understand whether the asking price is fair. Homes can sell for above, or below it though as it is just an indicative value based mainly on recent house sales. Rateable Values are generated by a company called QV.

Get a builder’s report

A builder’s report will check things like whether the house is structurally sound, if the wiring is in good condition and if there’s any risk of leaks. You’ll need to find a builder or a building inspection company to carry this out for you.

Get a full valuation

A full valuation is where a qualified valuer visits the property to provide a market value of the property. They'll look through the house, assessing its features, overall condition as well as the surrounding neighbourhood. You may decide that you don't need a valuation but sometimes your bank will want one as part of the terms of your approval for a home loan. The bank may also require you to use a valuer that is on their Approved Valuer list.

Understand the sale and purchase agreement:

A sale and purchase agreement is a legally binding contract between you, and the seller. It will contain all the important information about the sale – the price, any conditions, chattels being sold with the house, the settlement date etc.

Usually, this is drawn up by the seller’s solicitor, and needs to be signed by both parties.

However, before you sign anything, it’s vital you review this document with your lawyer, and make sure you understand what it says. In particular, if the seller has included any conditions on their end of the deal, you need to be on top of what these are, and the timeframe you have to complete them.

Make an offer

Ready to make an offer but not sure if it needs to be conditional or unconditional? See the guide [here].

A deposit is paid either on acceptance of the agreement by the seller or on the agreement becoming unconditional (depending on the terms of the offer).