Most house purchases in New Zealand are made subject to conditions. Your offer, once accepted, is a sale and purchase agreement with a set of "if this, then that" clauses attached. They let you check the house, the money and the paperwork before you're committed, and they come with dates. Missing one of those dates can cost you the right to cancel, so it's worth knowing what they are before you sign.

The exact wording depends on the agreement your agent or lawyer uses, so read the version you actually sign. What follows is the general pattern.

The usual conditions

  • Finance. The sale depends on you getting a loan approved, usually on terms you can accept. This is the condition most people don't get wrong, but it still needs a date.
  • Building report. A pre-purchase building inspection, with the right to cancel or renegotiate if the report finds something serious. See what a building inspection checks.
  • LIM. A Land Information Memorandum from the council, and the right to act on anything it shows. See what a LIM covers.
  • Title and easements. Your lawyer checks the record of title and any registered interests, such as easements or covenants, before you're committed.
  • Insurance. Some agreements make the sale depend on being able to get insurance at a reasonable cost. This matters more for houses in flood-prone or coastal areas.
  • Sale of your own home. If you need to sell first, this is a condition that protects you if your own sale falls through. It usually comes with a tight timeframe.

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Why the dates matter more than the wording

Each condition has a date by which you need to satisfy it or waive it. If you do nothing, the condition can lapse, and in many agreements that means you lose the right to walk away on that ground. That's why the most common problem is usually timing: a report that arrived after the deadline, or a finance approval that nobody chased.

Work backwards from the dates. Councils take time to issue a LIM. Building inspectors fit a booking around their diary. Lenders can take longer than you expect, especially for self-employed applicants or where the valuation comes in lower than the price. Put every date in your calendar when the agreement is signed, with a reminder a few days before.

Waiving a condition

A condition can be satisfied (the report came back fine, the loan is approved), or waived (you've decided to go ahead regardless). Both should be written down and signed. A verbal "we're happy with it" isn't enough. Your agent or lawyer will normally send the paperwork.

Be careful about waiving a condition because you're worried about losing the house. Once you've waived the right to walk away on a finance or building condition, the only way out is usually to renegotiate or to accept the consequences of the agreement.

Negotiating after a report

A building report or LIM almost always turns up something. A roof that's near the end of its life, a deck without a code compliance certificate, or a previous leak that's been repaired but not documented are all common. These are normally negotiating points rather than reasons to cancel.

When you go back to the seller, be specific. Get a quote for the repair or the cost to fix it, and ask for either a price reduction or a specific piece of work done before settlement. Keep the conversation about the issue, not about the house in general.

Keep track of the offer and the conditions

When you're juggling several conditions and more than one property, it's easy to lose track of what's been satisfied and what's still open. A written record of each offer, the conditions attached to it, their dates and what's been done about each one is more reliable than memory.

OurHouse has a due-diligence checklist and an offer tracker on each watchlist item. You can log an offer with the conditions attached to it (finance, building report, LIM and the others) and the date they fall due, then update the offer as it's countered, accepted, lapsed or withdrawn. It doesn't replace your lawyer or your agent, but it means you're looking at the same list they are.

Before you sign

Ask your lawyer to review the agreement before it's signed, not after. Check the list of conditions, the dates, what happens to your deposit, and the settlement date. If anything isn't clear, ask for it to be written in plain language. It's a small cost compared with the price of losing a condition by accident.