13th July

How to guide: A guide to selling residential property

Using a Real Estate Agent

In New Zealand, properties are commonly sold through licensed Real Estate Agents and the agents usually prepare the sale and purchase agreements. This process differs from many countries, where the agents market the property, but the agreement is drawn up by the parties’ lawyers. The agent is employed by you and works on your behalf and is paid when the property sells, normally on a commission basis. It is important that you choose an agent who knows your area and is licensed to sell. The Real Estate Authority (REA) has a public register of all people licensed to perform real estate agency work. Should you decide to use an agent to sell your property, they will require you to sign a listing authority. We recommend that, before you sign the authority, you ask us to review the details as we may be able to assist you in negotiating more favourable terms. It is also important to note that the REA’s Code of Professional Conduct and Client Care requires an agent to make reasonable enquiries about any defects your property may have and disclose these to potential buyers.

Methods of Sale

You can choose to sell your property by advertised price, deadline sale process, invitation to tender, auction or by negotiation the best method may be market related, or may depend on your particular circumstances. We can assist in guiding you on the differences before making your decision. Some methods of sale can be completed privately, but some require the use of an agent. Selling privately can save you money, particularly when you have a ready and able buyer, but you need to know what you are doing and understand the advantages, disadvantages, and risks. We can help you with this process. If the property is sold by auction, the buyer who places the highest bid above your reserve price wins the auction and must complete the sale. If selling by another method, the buyer will normally enter into the agreement conditionally on carrying out a due diligence on the property, and finance approval.

​For more of our best tips and tricks on selling a residential property in New Zealand, read on...

Before You Sign the Agreement

When a seller signs an agreement, they give certain warranties which, if breached, may allow the buyer to make a claim for compensation. Failure to disclose certain types of information may also, in some cases, be a misrepresentation by sellers. Whilst many agents have significant experience in drafting sale and purchase agreements, it is sometimes the case that a seller may require additional terms to be inserted into an agreement to protect them from future claims. Any additional terms must be inserted before the agreement is signed and presented to a prospective purchaser. As there have been many recent developments in property law, even experienced property sellers may benefit from advice. We can review a draft agreement very quickly at short notice and can supply you with clauses as required to protect your interests for your specific circumstances. Inserting these clauses in the first draft, although not critical, strengthens your position and increases the likelihood that the purchaser makes an offer accepting the same as opposed to you countering on additional terms once an offer has been made which may affect your bargaining position or even risk the sale.

Contract terms

New Zealand is well served with sets of standard property sale and purchase agreement documents. There are several sets of these covering the usual forms of transaction, including the ordinary negotiated sale and purchase, sales by auction and sales by tender, all published by the Auckland District Law Society and adopted throughout New Zealand, in conjunction with the Real Estate Institute of New Zealand. It is essential that agreements are correctly completed and tailored for each individual transaction, including by way of insertion of correct information, deletion in some cases of some of the standard provisions, which may not be appropriate for your particular transaction, and the addition of appropriate extra clauses to protect your interests. Where extra clauses are added, it is essential that these are checked beforehand to ensure that they are in the form which legally serves your best interests, and factual situation: not all similar looking clauses actually operate the same way or serve the same interests. These are some of the reasons why we strongly recommend that any proposed agreement is sent for inspection before it is seen by the buyer or signed by anyone.

We have extensive experience in negotiating and settling the terms of the REINZ/ADLS sale agreements and bespoke terms, including providing training on the same to property professionals. This precedent is constantly evolving, the latest 11th edition was published on 8 February 2022. We are up to date with the changes and have already prepared clauses necessary to protect our clients interests and address matters we have found beneficial to deal with as a result of our extensive industry experience.


A chattel is any moveable item that is not permanently attached to the land or building, which a seller intends to include in the sale. These are an important, but often neglected part of the agreement. There are a number of chattels that are pre-printed and automatically included in the agreement unless varied. These include floor coverings, blinds, curtains, ovens and numerous other items. Additional items may be added to the chattels list if seller intends to include them. Sellers must spend time carefully reviewing the chattels in the agreement. If a chattel is included in the agreement, it must be left at the property on settlement and must be in the same condition that it was in at the time the agreement was signed. If any chattels which have an operational function are included in ‘Schedule 3’, these must in working order on settlement, if any relevant items are not in working order and you wish to sell them as is take care to ensure they are specifically dealt with.

Unit Titles

Where the property is a unit title, there are special obligations on the seller. These include a requirement for a pre-contract disclosure statement to be supplied to buyers before they enter into any agreement. The statement must be in the correct form and contain the required statutory information. No later than the fifth working day before the settlement date, the seller must make a further disclosure which again must provide the required information including a certificate from the Body Corporate confirming whether there is an unpaid debt due to or claimed by the Body Corporate addition. In some circumstances a buyer may request additional disclosure.

Preparing for Sale

As well as ensuring that the property presents well for marketing purposes, there are some legal steps which need to be taken. These include having your property title reviewed to ensure that there are no old mortgages, caveats, notices of claim or other interests registered against the title. We can obtain an up to date search of the title from Land Information New Zealand (LINZ) and review this for you. We can also take steps to have problematic memorials removed.

It is also prudent to obtain a Land Information Memorandum (“LIM”) from Council. The LIM will include matters such as zoning, building consents, requisitions and whether there is any unconsented work at the property or any warranty breaches which should be rectified or brought to the attention of buyers prior to sale. We can assist in managing this as necessary including drafting terms to exclude the LIM condition from the agreement, speeding up and smoothing out the sale process and also we can advise if any remedial action should be undertaken pre-sale or draft a disclosure and acknowledgement of the same in the agreement regulating the sellers risks, depending on the circumstances.

Repairs and Alterations

It is important that a property is clean, tidy and free of rubbish, and that essential maintenance and remedial compliance work has been completed. Significant expenditure should not be incurred without careful consideration of the return on investment.

Leaky Homes

There can be major issues if a property is what is technically classed as a “leaky home”. The property may not have an active leak but may become leaky as a consequence of the kind of materials it is made of. In many cases, leaky homes require major rebuilding which can drastically affect the value of the property. Please see our website, or ask for a copy of our guide “What is a leaky home”, if you would like some more information on this and so that we can discuss this with you before the property is marketed.

Investment Properties

Where a property is tenanted, it is important to establish whether the property will be sold with the tenant remaining at the property or with vacant possession. If the tenant is to move out on settlement, the correct notice must be given in accordance with the terms of the tenancy. Consideration must also be given as to when viewings of the property can take place, ensuring that any obligations to the tenant are met, during this process.


We strongly advise you to keep the insurance on your property fully in force, until after the sale price has been paid in full and the transaction has been settled and completed in all respects. We also advise that you maintain insurance on your household contents and make sure that your contents cover will properly protect you for the value of your possessions while they are being moved from your house to a new location, and also that they will be covered at the new location.

The Settlement Date

When the agreement is signed, the parties nominate the intended settlement date. This is the date that balance of the sale price is paid and normally, the date when the seller moves out of the property. If the seller is purchasing a new property, it is important to align both of the settlement dates, so that the seller can move into the new property on the date that they move out of the sold home.
Where the need arises, a settlement date can sometimes be changed by mutual agreement between the parties, however, this cannot be guaranteed and a seller may be required to pay a significant financial penalty if they cannot move on the agreed date.

Inland Revenue Department

All owners of land must supply their IRD number to LINZ on or before the date of settlement. We will ask you to provide your number to us prior to settlement. If you do not have an NZ IRD Number, you will be required to get one before you can settle, and this can take a number of days to complete. It is also important to note that, under the ‘brightline test’, if the property is not your ‘main home’ you may be liable to pay tax on any financial capital gain. We suggest that you obtain advice from your accountant in this respect but we will be able to assist with general legal advice.

Mortgage Repayment

If there is a mortgage to repay, we will engage with the lender to obtain a discharge of the mortgage prior to settlement. The lender will also supply us with a statement detailing the amount to be repaid. It is important that you make contact with the lender to get an estimate of the amount to be repaid as you may need to make provision to put aside additional funds from the net proceeds of sale to cover early repayment fees and/or fixed break costs, should these apply.


In the standard agreement the buyer is entitled, after giving reasonable notice in writing, to enter the property on one occasion prior to the settlement date for the purpose of examining the property and chattels which are included in the sale and checking that everything is there and their state of repair. We suggest that this be arranged for a day or two before settlement. These arrangements are usually made through the agent.

Rates and Utilities

We will arrange for the water meter to be read on the settlement date and we will retain funds from the net proceeds of sale to pay the account. Water rates from that date onwards will be the responsibility of the new owner. General rates will be apportioned in the settlement statement so that you will only pay your share up to the date of settlement. We will organise with the Council for future instalment notices to be sent to the buyer. Arrangements for power, telecommunications and other providers are handled by sellers directly and you should make arrangements for disconnection directly with your suppliers, check that sufficient notice is given in accordance with your contract terms to mitigate incurring unnecessary costs.

Unit Titles and Leasehold Property

Payment for your share of Body Corporate levies, and if the property is leasehold or has tenants, the rent and other payments, are normally calculated and apportioned in the settlement statement.


We will receive the settlement funds from the buyer, repay the lender, pay any outstanding rates and outgoings, retain funds for the final water invoice and discharge the mortgage. Any net proceeds from the sale will be deposited into your nominated bank account. If you are using the net proceeds of sale to purchase a new property, we will retain the funds and use them to complete the settlement on the purchase. Once settlement has taken place, we will advise you and the agent.

Keys and Moving Out

We do not recommend that keys to the property are released to the buyers until after the purchase price has been paid in full and settlement arrangements completed. If a special arrangement is required, we recommend our clients to consult with us so that the arrangements can be made on a basis which is appropriate and will not prejudice their interests.

Settlements are dependent on a number of factors and usually take place early afternoon. Settlement must take place and possession must be given by 4pm on the settlement date.

Post Settlement

As part of the settlement, we will register the change of ownership of the property and advise the Council and Water provider of the settlement of the sale.


Under Anti-Money Laundering legislation, we are required to verify your identity and take copies of your identification documents and proof of address. We are also required to hold documentary proof of the bank account into which we deposit any payment. If we do not already hold these documents, we will ask you to bring in these documents when you meet with us.

We have prepared this Guide to outline some key issues for property sellers and answer some frequently asked questions. The Guide is general in nature and every transaction is different, but we hope that you will find that the information is handy, helpful and it may answer some questions for you. It may also help you avoid a few problem areas. It is not a substitute for proper legal advice. Do let us know if you would like to find out more on these or any other matters where we may be able to assist.

Contact us today.