Buying And Selling A Property On The Same Day
Deciding to move house is an exciting and big decision. You finally find the perfect property and now what? If you haven’t put your house on the market already, then you will now be looking at arranging for the marketing and sale of your property. You will be signing two contracts – one for the sale of your property and one for the purchase of the new property.
There is often a lot to work through and a number of people that you are dealing with – real estate agents, your solicitor, builder, mortgage broker/bank, the Council (to name a few).
Here are some tips/things to think about when you are looking at buying and selling:
- Have your solicitor review the Sale and Purchase Agreements
Regardless of what order it happens in (whether you find a replacement property first, or whether you receive an offer for the sale of your house) we would recommend having your solicitor review the Sale and Purchase Agreements before signing.
It is important that both contracts include a condition that each contract is conditional upon your unconditional sale/unconditional purchase. There may also be other conditions to include in your purchase offer for example, such as obtaining unconditional finance approval, satisfactory builder’s report, insurance cover, reviewing and approving the LIM report and title search/approval.
- Timing of Conditions
As both contracts will be confirmed at the same time, the dates for confirmation of your conditions will need to match. For example, if your purchase conditions are due ten working days after signing, then the condition in your sale contract will need to be due on or after this date.
- Settlements on the same day.
When the Sale and Purchase Agreement is signed, the Agreements will include the settlement date which could be either a specified date (ie 1st May) or it could be a timeframe after conditions are confirmed (ie 15 working days after confirmation of the conditions).
The difficulty in the settlement date being specified as a timeframe, is that there is no guarantee that the settlement dates for both your Sale and Purchase will align.
Unless you have bridging finance for your purchase, both settlement dates will need to be the same. Our advice would be for both contracts to have the exact same settlement date.
If the property you are selling is to a first home buyer, then please note generally speaking, the necessary timeframe if they are withdrawing their KiwiSaver would be a minimum of 15 working days from the date that their contract is confirmed as unconditional. It is important that the settlement date timeframes are realistic so that there are no issues with delays.
- Finance Requirements.
Our advice would be as soon as both contracts are confirmed as unconditional, to make an appointment with your bank/contact your broker to finalise all of the rates for your lending.
Once the rates are finalised, often you may need to make an appointment with your bank to satisfy any of your bank’s requirements. Once all requirements are met then your bank will prepare the loan documents which will be emailed through to your solicitors to prepare for you to sign prior to settlement.
To avoid any delays with the upcoming settlement date, our advice is to make all of these arrangements as soon as possible once the conditions are confirmed so that there is plenty of time for loan documents to be received, prepared, signed by you and returned to your bank prior to settlement.
- Timing on Settlement Day
On the day of settlement, once the settlement funds are received for your sale, and we receive new lending from your bank (if applicable), we would be in a position to complete settlement of your purchase. For this reason, the timing on settlement day cannot be guaranteed.
If you have a moving company booked, please be aware that there is no guarantee that you will receive the keys for the new property by a certain time.
In making arrangements with your bank as soon as possible as above, you would be giving yourselves the best chance in avoiding any potential delays on the settlement date.
Shifting can be a stressful experience, particularly if you are buying and selling on the same day.
