Steps to Follow After Signing a Property Contract

So, you’re almost at the finish line! You’ve gone through the process of getting on the property ladder, made an offer on a house, and it’s been accepted. While this is definitely cause for celebration, you’re not out of the woods yet. You’ve simply entered a new phase of the home-buying process, formally known as being “under contract.”
So, what’s next? This is a common question for many first home buyers and investors. Let’s break down what being under contract means and what more you have to do to finally own your home. Here’s what to expect when you’re under contract.
You’re Not Committing to Buying the Home
The good news about being under contract is that you’re not bound to pay anything at this point. It’s simply a chance to give yourself time to undertake all your research and due diligence before you hand over any money. Working with SM Property and a mortgage broker or bank is essentially free, so there’s no money exchanged between you and the developer when you put a home under conditional offer. The only cost involved initially is the legal review, which is a requirement once you enter your due diligence phase.
What Does ‘Under Contract’ Mean?
When a property is under contract, it typically includes certain conditions that you included in your offer, such as finance approval, solicitor approval, building inspections, or a due diligence clause. Once your offer is accepted, it’s time to satisfy these conditions, and time is of the essence. When a property is under contract, it means the buyer has accepted your offer, but the sale isn’t final yet. Several things still need to happen before closing.
At this point, the property will be listed as pending. Before the sale is finalized, all contingencies in the contract must be met by both parties. This could include home appraisals, inspections, and title reports. If either you or the seller fails to meet those conditions, the contract becomes void, and you can both back out of the sale.
Review the Contract
Ensure you send your contract to your solicitor for review. If your contract includes a due diligence clause or solicitor approval clause, your solicitor can advise you against the content of the offer, allowing you to negotiate changes or cancel if necessary. They will discuss the risks and protections of the contract and highlight any concerns. Don’t worry too much if there are significant clauses in the contract—remember, it covers “worst-case” scenarios. We’ll also email your solicitor a signed copy of the agreement to maintain transparent communication.
This is a good time to reassess your pre-approval amount if it needs to change. If you’re considering extending your pre-approval amount, now’s the time to discuss this with your broker—we’ll email them a signed copy of the agreement as well.
Ask Questions
If you have questions, now’s the time to speak up! It’s important to voice any concerns or specific requirements you may have. The due diligence period is the best time to discuss these with your new build specialist, agent, or solicitor.
Do Some Due Diligence
It pays to fully investigate a property. When you’re under contract, you have the opportunity to undertake due diligence. Due diligence is a comprehensive check of a property undertaken by a prospective buyer. This can help confirm the physical state, specs and plans, legal standing, and actual market value of a home.
It’s important to undertake due diligence so you know exactly what you’re buying. That way, if any issues arise, you’ll be better prepared to deal with any costs or concerns that come up. This could involve informal research about the area or accessing some certificates of title and LIM reports. The aim is to give you important information about the property.
While it’s your responsibility to carry this out, remember to chat with your solicitor about due diligence early in the process. They can advise you on what to look for, what documents to review, and help ensure all your bases are covered. We’ve put together a Due Diligence guide to help you through this process.
Prepare All Closing Funds and Documents
It’s time to withdraw your first home grant, if applicable. If you’re using your KiwiSaver as part of your deposit and you’ve ensured you’re eligible, now's the time to withdraw. You’ll need to let your solicitor know, and they’ll guide you through the process.
What if I’m an Investor?
When you apply for an investment property home loan, most lenders will want to see a rental appraisal. If you’re buying an investment property, this is when you should get one. You can get one by having an agency assess your property. They’ll look at similar rental properties in the area and compare your property to estimate the amount of rent you’ll likely receive.
You can talk to your property manager to get a sense of the type of tenant, rental amounts, and rental demand in the area of your property. At SM Property, we always operate with a conservative rental appraisal and ask that of our property managers too. That way, there’s a good buffer if the number shifts, as these can vary depending on what’s happening in the market at the time. If you buy a new build that’s not ready for two years, the rental market could change in that time, so be prepared for some movement.
Decision Day
If all goes well, you’ve done your due diligence, and you’re confident in your purchase, it’s time to go unconditional!
This is where you notify your lawyer and let them know whether you want to proceed or withdraw. If you do, you’re officially unconditional. From here, your solicitor will inform the seller’s lawyer of this in writing, and you’re committed to the sale. This is when you’ll pay the deposit listed in the agreement to secure your property.
It’s Time to Settle
This is the day you pay the balance of the purchase price, and the property becomes yours. Here are a few things you’ll need to tick off before you move into your new property:

• Touch base with your mortgage broker and ensure your lending is in place.
• Sort out your insurances - house & contents, and potentially personal life or income cover.
• Do a pre-settlement inspection. This is a walkthrough of the property—make sure you are happy with the final product.
• Start packing and purchasing any extra pieces of furniture needed.
• Wait for titles and code of compliance to be finalized—after these are issued, settle by paying the remainder of the purchase price.
  On settlement day, not much actually happens for you. The paperwork should already be signed, and the money should be ready to go; it’s just up to the lawyers to do their job. Then, once the transfer of funds and ownership is complete, your solicitor will notify you, and you can pick up your keys and move in!
  Got any more questions? If you need some help navigating the home-buying process, contact us today. You can also visit our Instagram for more tips and tricks on the home buying process.