What happens after you accept an offer on your home?

A quick overview of the process

Once you and the buyer have agreed on the price and terms, you will sign a sale and purchase agreement. This is a legally binding contract, even if the sale is conditional.

Depending on the agreement, the buyer may need to satisfy conditions such as obtaining finance or a satisfactory building inspection. Once the conditions have been met or otherwise dealt with under the agreement, the sale becomes unconditional.

The buyer pays a deposit according to the terms of the agreement. Your lawyer or conveyancer then helps prepare for settlement, when the balance of the purchase price is paid and ownership is transferred. ⁠⁠

The time between accepting an offer and settlement varies. It depends on the conditions and the settlement date agreed by you and the buyer.

Step 1: Accepting an offer

An offer is generally presented in writing on a sale and purchase agreement. As well as the price, it will include details such as the proposed settlement date, any conditions and the chattels included in the sale.

You can accept an offer, reject it or make a counteroffer. Your agent can help you understand the offer and negotiate with the buyer, but the decision is yours.

Price is important, but it is not the only thing to consider. An offer with fewer conditions or a settlement date that suits your plans may be more appealing than a higher offer with less certainty.

Before signing, ask your lawyer or conveyancer to review the agreement and explain what you are committing to. Once you and the buyer have agreed on the terms and both signed, you are generally in a legally binding contract. ⁠

What if your property sells at auction?

A successful auction sale is generally unconditional, and the seller and buyer sign the auction sale and purchase agreement when the auction ends. The buyer should have completed their due diligence and arranged finance before bidding.

The deposit and settlement date will be set out in the auction agreement, so check these with your agent and lawyer or conveyancer. ⁠

Step 2: Understanding the sale and purchase agreement

The sale and purchase agreement records the details of the transaction. It will usually include:

• The names of the buyer and seller
• The property address and type of title
• The purchase price and deposit
• The settlement date
• The chattels included in the sale
• Any conditions and the dates by which they must be satisfied
• Other obligations, including what happens if settlement is delayed.

Before you sign, the agent must give you the Real Estate Authority’s New Zealand Residential Property Sale and Purchase Agreement Guide and ask you to confirm in writing that you have received it. ⁠

Check what stays with the property

Chattels are items included in the sale, such as curtains, a dishwasher or heat pump. Check the agreement carefully so both parties understand what is staying and what you intend to take.

If an included item is not working, discuss this with your agent and lawyer or conveyancer so its condition can be recorded in the agreement. This can help avoid misunderstandings before settlement.

When is the deposit paid?

The agreement sets out the amount and when the buyer must pay it. Depending on the terms, this may be when the agreement is signed or when it becomes unconditional.

A deposit is often around 10% of the purchase price, but the amount can vary. It is usually held in an agency trust account and may be released before settlement, subject to the applicable requirements. The agency will usually deduct its commission from the deposit. Ask your agent and lawyer or conveyancer how this will work for your sale. ⁠

Step 3: Working through the conditions

A conditional agreement is legally binding, but the sale is subject to one or more conditions being satisfied by the dates specified in the agreement.

Common buyer conditions include:

• Finance: The buyer needs to confirm their loan or other funding.
• Building inspection: The buyer wants a satisfactory report on the property.
• LIM report: The buyer wants to review information held by the local council.
• Valuation: The buyer or their lender requires a valuation.
• Sale of another property: The buyer needs to sell their existing home.

You may also have agreed to conditions, such as completing particular repairs. Your lawyer or conveyancer can explain who is responsible for each condition and the relevant deadlines. ⁠

Your agent may need to arrange access for inspections or valuations. If a deadline is approaching and more time is needed, speak to your lawyer or conveyancer as soon as possible. An extension is not automatic; any change needs to be agreed and documented.

If a condition cannot be satisfied, the outcome depends on the wording of the agreement and the steps taken by the parties. The buyer may be able to cancel under the relevant condition, but they cannot assume they can withdraw simply because they have changed their mind.⁠

What does unconditional mean?

A sale becomes unconditional when the conditions in the agreement have been satisfied or otherwise dealt with in accordance with its terms.

This is an important milestone, but it is not settlement. Both parties still need to meet their remaining obligations and the buyer must pay the balance of the purchase price on the agreed settlement date.

Step 4: Preparing for settlement

Settlement day is the date when the buyer pays the remaining purchase price and the legal transfer is completed. It is usually also the day the buyer takes possession, although your agreement may provide otherwise.

Your lawyer or conveyancer will work with the buyer’s representative to prepare the paperwork and financial arrangements. They may need you to:

• Provide identification and tax information
• Sign the authority to transfer the property
• Arrange for any mortgage to be repaid and discharged
• Confirm details needed for the settlement statement
• Provide information about rates and other property charges.

Contact your bank and lawyer or conveyancer early, particularly if you have a mortgage or another loan secured against the property. ⁠⁠

Get ready to move

Once the sale is unconditional, it is a good time to confirm your moving plans. If you are required to provide vacant possession, make sure you allow enough time to move out before settlement.

Your checklist may include:

• Booking a moving company
• Packing belongings and checking storage areas
• Removing rubbish and unwanted items
• Arranging final utility readings and payments
• Redirecting your mail with NZ Post
• Preparing keys, garage remotes and security information
• Keeping the property insured until settlement is complete.

Leave the property tidy and check your agreement for any additional cleaning requirements. Unless otherwise agreed, the property and included chattels should remain in the required condition through to settlement.

Step 5: The pre-settlement inspection

The buyer will usually inspect the property before settlement. Your agent can help arrange a suitable time.

The inspection gives the buyer an opportunity to check that the property and included chattels are in the expected condition and that any agreed work has been completed. It is not intended as an opportunity to identify problems that already existed when the agreement was signed.

The inspection is often held at least two working days before settlement, allowing time to address any issues. If a problem arises, contact your agent and lawyer or conveyancer promptly. ⁠⁠

If the property is tenanted, access and inspection rights can be different. Discuss the arrangements with your property manager or lawyer and respect the tenant’s rights.

Step 6: Settlement day

On settlement day, the buyer’s lawyer or conveyancer arranges payment of the balance of the purchase price. Your lawyer or conveyancer manages the seller’s side of the transaction, including the transfer of ownership and repayment of any mortgage.

The settlement statement will account for relevant payments and adjustments, which may include council rates or body corporate levies. Your lawyer or conveyancer can explain how these apply to your property.

You generally do not need to meet the buyer to complete settlement. Your lawyer or conveyancer will let you know when the transaction has settled.

When do you hand over the keys?

You can arrange to leave the keys, garage remotes and relevant access information with your agent before settlement. The agent will release them to the buyer once your lawyer or conveyancer confirms settlement has been completed.

Do not assume settlement has occurred simply because the agreed day has arrived. Wait for confirmation before handing over possession.

Selling a tenanted property

If you are selling an investment property, the sale and purchase agreement should make clear whether the property is being sold with a tenancy in place or with vacant possession.

If the tenancy continues, the new owner becomes the landlord. Your lawyer or property manager can help arrange the transfer of tenancy information and bond records, and account for any rent paid in advance.

If the buyer requires vacant possession, you must comply with New Zealand tenancy law. Selling a property does not automatically end a tenancy, and the notice requirements depend on the circumstances and type of tenancy. Get advice before committing to a vacant-possession date. ⁠⁠

What can delay settlement?

Most sales proceed as planned, but issues can arise. Common causes of delay include:

• A condition not being satisfied by its deadline
• Finance or funds not being ready
• Incomplete legal paperwork or identity checks
• Mortgage discharge or title issues
• Agreed repairs not being completed
• Disputes about damage, chattels or vacant possession
• Delays transferring funds on settlement day.

The best way to reduce the risk is to stay in contact with your agent and lawyer or conveyancer, respond to requests promptly and raise any concerns early.

If settlement is delayed, your agreement may set out consequences such as interest or compensation. Your lawyer or conveyancer can advise you on your position.

What should you do after settlement?

Once your lawyer or conveyancer confirms settlement is complete, there are a few final things to organise:

• Confirm your utilities and other services have been closed or transferred.
• Update your address with your bank, insurers, government agencies and other providers.
• Redirect your mail and update subscriptions or delivery accounts.
• Confirm the right time to cancel your property insurance.
• Keep copies of your sale and purchase agreement, settlement statement and mortgage discharge records.

Planning to sell your home? Talk to us

Selling a property involves more than agreeing on a price. From assessing offers and managing conditions to preparing for settlement, your local LJ Hooker agent can guide you through the process and keep you informed along the way.

If you are considering selling, start with an obligation-free property appraisal. Your local agent can provide insights into your property, recent comparable sales and buyer activity in your area.