At some point in the buying process, someone is going to put a document in front of you and ask you to sign it. That document is the sale and purchase agreement, and it is the most legally significant thing you will touch during the entire transaction. Most buyers have a vague idea of what it is. Far fewer understand what they are committing to when they sign it.
What Is a Sale and Purchase Agreement?
A sale and purchase agreement, or S&P, is the legally binding contract between a buyer and a seller. It captures everything the parties have agreed to. The price, the deposit, the settlement date, and any conditions that need to be met before the sale becomes unconditional. Once both parties sign, it is a contract. Not a letter of intent. Not an expression of interest. A contract.
In New Zealand, most residential transactions use the standard Auckland District Law Society and Real Estate Institute of New Zealand agreement form, known as the ADLS/REINZ agreement. It is a standard format, but that does not make it a light read. Get familiar with it before you sit at a table with a real estate agent and a pen.
Key Elements of the Agreement
The agreement identifies both parties, gives the legal description of the property, states the purchase price, and sets out how and when the deposit is paid. It also records the settlement date, the day the remaining funds are transferred, and legal ownership passes to you.
The chattels section lists any movable items included in the sale. That’s whiteware, curtains, blinds, light fittings, and so on. What you saw at the open home is not automatically what you get on settlement day. It must be written into the agreement. Disputes over chattels are surprisingly common and almost always avoidable. A practical example: a buyer assumes the heat pump stays because it was there at every viewing. The agent never put it in the agreement. It is gone on settlement day, and there is no legal recourse. Get it in writing.
There is also a GST declaration. For most residential purchases by a private buyer for personal use, GST does not apply. But the section still needs to be completed accurately. An incorrect declaration can create complications at settlement that nobody wants to be dealing with at that stage.
Understanding Conditions
Most offers made by first-home buyers are conditional. That means the sale only proceeds if certain conditions are confirmed within a set timeframe. The three most common conditions in a residential purchase are finance, builder’s report, and LIM.
A finance condition gives the buyer a set number of working days, usually five to ten, to confirm the lender will approve the loan for this specific property. Pre-approval is not the same as confirmed loan approval. Lenders still need to assess the property itself before issuing formal approval, so having a finance condition in place is essential even when pre-approval already exists. Do not skip it.
A builder’s report condition gives you time to get an independent inspection done and the right to walk away if what the inspector finds is not acceptable. What counts as unacceptable is a judgement call, not a set standard, so talk to your solicitor about how this is framed in your specific agreement before you sign.
A LIM condition gives you time to order a Land Information Memorandum from the council and review what it contains. The LIM covers consents, compliance history, natural hazards, and more. We have covered LIM reports in detail in a separate blog. If you have not read it yet, do so before you make your first offer, because a LIM is not something to skim.
Timeframes and Working Days
Each condition has a set number of working days attached to it. Working days exclude weekends and public holidays, which matters more than most buyers realize. A five-working-day finance condition signed on a Wednesday does not expire the following Monday. It runs until the following Wednesday at the earliest, and any public holiday in between extends it further. Know your dates.
If a condition cannot be met in time, you can ask for an extension, but the seller has to agree. It is a negotiation, not a right. The best way to avoid needing one is to move quickly from day one and keep your solicitor and mortgage adviser in the loop throughout.
Going Unconditional
When all conditions have been satisfied or waived, the agreement becomes unconditional. At that point, both parties are locked in. The buyer cannot withdraw without financial consequences, and the seller cannot accept another offer. There is no door left open on either side.
Only confirm your conditions are satisfied when you genuinely are. Not because the deadline is close. Not because the agent is pushing. If something is not sitting right, call your solicitor before you confirm anything.
The Role of Your Solicitor
Get your solicitor involved before you sign. Not after. Many buyers treat legal advice as something you do once the deal is already done, which defeats much of the purpose. Reviewing the agreement before you sign is when you can change things, request additional conditions, query clauses, or make sure what you are agreeing to is what you think it is. Several firms also offer no-cost S&P checks for buyers who ask.
Solicitor fees for a residential purchase vary, but they are a modest cost relative to the size of the transaction and the protection that good advice provides. Have someone chosen before you start making offers, not after you have already found the property you want. Check out Convey Law for a fixed price quote. https://www.conveylaw.co.nz/
What Happens Between Unconditional and Settlement?
Once you are unconditional, the focus shifts to settlement. Your solicitor handles the transfer of funds and the title change. Your lender prepares the loan documents for you to sign. One thing buyers sometimes leave too late: property insurance. Most lenders require confirmation of cover before they release funds, so sort it before settlement day, not on the morning of.
You are also entitled to a pre-settlement inspection before the keys are handed over. Use it. Check that every chattel listed in the agreement is still there, that the property is in the same condition as when you signed, and that any repairs agreed to have been done. If something is wrong, you have a lot more leverage before settlement than you do after it.
To understand how the S&P fits into the full buying journey, read our blog on the traditional buying process here. Our suburb reports give you the data on where values sit before you make an offer, and our tools can help you get a clearer picture of what your budget allows. Visit our website at nextmoveproperty.co.nz and check them out for yourself.
A Process Worth Understanding
The sale and purchase agreement is not just a formality. It is the legal foundation of the whole transaction. Understanding what it contains, what your conditions mean, and what going unconditional commits you to puts you in a far better position than most buyers who sign it. Read it. Get advice before you sign it. And never let someone else’s timeline push you into a decision you are not ready to make.
If you have questions about how the finance condition works or where pre-approval fits into this process, reach out at info@nextmoveproperty.co.nz, and we can point you in the right direction.