Buying/selling a Home: Do I Need a Lawyer?

Tony Buckwell
February 8, 2018

Buying and selling real estate has many legal pitfalls for the unwary. While a skilled and experienced real estate salesperson will be familiar with many of the legal issues involved in selling your home, they can’t offer you proper legal advice. Therefore you’ll need to appoint a conveyancing lawyer (also known as a solicitor) to help.

If you don’t have a lawyer, your salesperson should be able to explain how you can find one and possibly provide a selection of reputable professionals in your area.

While you definitely need a lawyer to complete the settlement of your sale, you technically don’t need a lawyer to sign a Sale and Purchase Agreement. However, it’s wise to contact your lawyer as soon as you have decided to put your property on the market.

When selling, if you want your salesperson to send a copy of the offer to your lawyer before you sign, let your lawyer know what’s happening beforehand. Make sure they can act quickly when it arrives (as they might be busy or on holiday). You need to be pushing forward with your salesperson as soon as they receive a written offer.

Here are some key things to remember:

  • In New Zealand, a verbal contract for real estate is not binding on either party, so it must be in writing.
  • In NZ, almost all property sale contracts are written on the standard contract approved by the Auckland District Law Society (except auctions and tenders).
  • By law, a real estate salesperson must present all written offers to the seller.

You might need to contact your lawyer immediately if your sale is unusual in some way. Some examples are:

  • You have agreed to buy another property.
  • You have tenants in the property.
  • You are in a relationship break-up.
  • You are in default on your mortgage.
  • You are in the process of subdividing your property.

If you need to be out of town during the selling process, you may also need to talk to your lawyer about signing a power of attorney document so that someone else can sign urgently required documents in your absence.

Many lawyers offer a fixed-fee service for sale and purchase transactions (also known as “conveyancing”). They are usually happy to include a pre-contract consultation as part of that fixed-fee service. I suggest you give them a call as soon as you think you might sell, and they will guide you through the process.

Although a real estate transaction looks straightforward from the outside, and most sales go through without any problems, there are times when things may go wrong. Your lawyer is there to avoid these sorts of issues, or to help you if anything goes wrong.

Your lawyer’s primary responsibilities are:

  • To make sure the contract protects your interests.
  • To liaise with the buyer’s lawyer about paying the deposit, and satisfying any conditions.
  • To liaise with your bank to release your mortgage in preparation for settlement.
  • To liaise with your body corporate, if applicable.
  • To complete settlement on the day that keys are handed over to the buyer.
  • To pay off your mortgage after the sale is completed.
  • To cover other issues such as your rates, insurance, wills, etc.
  • In general, most lawyers will deduct their fees from the sale proceeds.

As you can see, solicitors have a critical role to play when buying or selling a property. Although the cost of using their service can seem high, in reality, it is a small price to pay when weighing this up against the potential costs of a transaction that goes bad.

I like the old expression – “If you think a good lawyer is expensive, you should see how much a bad one can cost you!”

That’s all for this post. Catch you again soon!

Tony.

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