The Sale and Purchase Agreement
📝 The Contract That Buys a Home
The sale and purchase agreement is the legally binding contract used to buy or sell property in New Zealand. It sets out the price, who is buying and selling, the deposit, the settlement date, what is included, and the conditions that must be met. Because it is binding once signed by both parties, understanding it, and getting legal advice before you sign, is one of the most important steps in any property purchase.
What the Agreement Covers
- The parties, the property, and the agreed price.
- The deposit amount and when it is paid.
- The settlement date, when ownership and the balance change hands.
- The chattels included, like the oven, curtains, or heat pump.
- The conditions that must be met for the sale to go ahead.
✅ Conditional and Unconditional
One of the most important ideas is the difference between a conditional and an unconditional agreement. Conditions are things that must be satisfied before you are fully committed, and they protect the buyer.
Common Conditions
| Condition | What it protects |
|---|---|
| Finance | That your lender will actually approve the loan for this property |
| Building report | That the property is sound, via an inspection |
| LIM report | That council records reveal no nasty surprises |
| Insurance | That you can insure the property |
| Sale of your own home | That you can sell before committing, where included |
From Conditional to Unconditional
While conditions are unmet, the agreement is conditional, and if a condition cannot be satisfied you can usually withdraw without penalty, following the agreement terms. Once all conditions are met or waived, the agreement becomes unconditional, and you are fully committed to buy. Going unconditional is the point of no return, so never do it until finance is confirmed and your checks are complete.
💰 Deposit, Settlement and Chattels
The Deposit
The agreement sets a deposit, often a percentage of the price, usually paid once the agreement becomes unconditional. It is typically held in a trust account, not handed straight to the seller. The deposit is part of the purchase price, with the balance paid at settlement.
The Settlement Date
Settlement is the day the rest of the money is paid and ownership transfers to you. The date is set in the agreement, and your lawyer and lender coordinate the funds. Being clear on the settlement date matters for arranging your loan, insurance, and the practical move.
Chattels and What Is Included
The agreement lists the chattels included in the sale, such as the stove, light fittings, curtains, or a heat pump. Anything not listed may not be included, so it is important the agreement records exactly what stays with the property. Disputes often arise from assumptions about what was included, which a clear agreement avoids.
💡 Getting It Right
Use a Lawyer Before You Sign
The strongest protection is to have your lawyer or conveyancer review the agreement before you sign, or to make your signing conditional on legal review. They check the conditions are right, the dates work, and you understand your obligations. Property is one of the largest purchases you will ever make, and the cost of legal advice is small against the risk of a problem in the contract.
Practical Tips
- Get the conditions you need: finance, building report, and LIM are common protections; do not skip them under pressure.
- Allow enough time: make sure condition dates give you time to actually complete each check.
- Check the chattels list matches what you expect to be included.
- Never go unconditional until finance is confirmed and checks are done.
- Be careful at auction: auction sales are usually unconditional, so checks must be done beforehand.
Pair this with our guides on conditional offers, building inspection reports, and reading a LIM report. Final word: the sale and purchase agreement is the binding contract that buys a home, covering price, deposit, settlement, chattels, and conditions. Get legal advice before signing, secure the conditions you need, and never go unconditional until finance is confirmed and your checks are complete. This is general information, not legal advice.
🎯 Test Your Knowledge
Quiz on The Sale and Purchase Agreement (20 Questions)
Related guides
- Reading Your Employment Agreement, a related guide in the same area.
Related tools and guides
- Deposit at risk calculator: what failing to settle genuinely costs.
- Property legal fees calculator: the lawyer the agreement makes essential.
- Settlement apportionment calculator: the rates and levies split on the day.