Home Buying Jargon – What You Need to Know With Jo Marshall

COMMON TERMS YOU’LL HEAR WHEN BUYING A HOME

When buying a new home—whether it’s your first, an upgrade, or an investment property—you’ll encounter a maze of jargon. Decoding these terms can feel overwhelming and stressful. Let us help make sense of it all and guide you through the process, taking some of that pressure off your shoulders.

So, what are some of the terms you might come across, and what do they mean?

PRE-APPROVAL

This is issued once your application (with all the required supporting documents) has been assessed by the bank. A pre-approval gives you confidence when making offers, knowing the bank has already signalled its support. You’ll still need to confirm that the property (the “security”) is acceptable to the bank, so make your offer subject to finance.

FINANCE DATE

The deadline by which you must obtain an unconditional loan approval from the bank.

PRE-PURCHASE BUILDERS REPORT

Although not always mandatory, a builders report is strongly recommended. It details the property’s structural condition, flags potential future issues, and notes general maintenance needs. If concerns arise, the bank may ask to see this report.

DUE DILIGENCE

The period during which you complete investigations to ensure the property suits your needs, identify any risks or liabilities, and fully research all aspects of the purchase.

DEPOSIT

The amount specified in the Sale and Purchase Agreement, usually (but not always) payable once the agreement becomes unconditional. While any figure acceptable to both vendor and purchaser is possible, 10 % of the purchase price is typical. Discuss this amount with your adviser and/or solicitor—especially if you plan to use KiwiSaver funds for the deposit. Note that the deposit in the agreement may differ from the overall contribution you’re making to the purchase.

UNCONDITIONAL

The point at which all conditions are satisfied and you commit to the purchase. Your solicitor will confirm everything is in order before you go unconditional. After this, you are legally bound to buy the property.

SETTLEMENT DAY

The big day! It can be hectic—often it’s move-in day—but take a moment to celebrate reaching your home-ownership goal. Congratulations!

While these are just a few of the terms that you will come across they are the most commonly discussed.  Remember to ask the professionals that are there to support you in your Home Ownership journey, if there is something that you are not sure of.  We are all here to help guide you!

Article by Jo Marshall