Paying The Deposit - Now The Land Is Ours, Nearly

Real estate agents would have you believe you have to pay the deposit upon signing of the Sale and Purchase agreement. There's no point doing that unless both parties are signing and even then this is a negotiable. The agents of course want to get the deposit, because they're the first ones who will get paid out of it. The deposit goes in to their Trust Account and should be held there until the deal goes unconditional. Once it goes unconditional, the Real Estate Agency deducts its commission or part thereof.

When selling privately, the cheque can be paid to the vendors solicitor and held in their Trust Account. In a previous sale, I remember my solicitor paying over the deposit to me once the deal went unconditional. She took her fees out at settlement.

On this current deal, our solicitor advised not paying the deposit. There were many risks she needed to point out to us first. We paid the deposit today. It feels like the section is ours but we don't go unconditional until tomorrow and we're still waiting for confirmation of finance.

There's been lots of lessons already on this project. We rushed it. We didn't do our research properly before making an offer (e.g. we didn't look at the sales history on the property). We didn't allow enough time between signing and going unconditional to complete due diligence. Our solicitor really wants us to meet the other cross-lease owners to see if they're going to be supportive or not. It would also have been useful to meet the neighbours at the back, whose driveway we need to come down with the relocatable house.

We're going to go with the ex-Castor Bay house, the one for $30,000. The house mover checked out the section today and confirmed he can get the house on there no problems. Next step is to pay the deposit and get the Auckland City Council out to inspect the house. Our solicitor wants to check out the contract first though. It was a relief to find out the house removal company does insure the house until it is in our possession, and whilst they want the final installment paid before delivery, it's held in their solicitor's Trust Account and refunded if they drop the house and wreck it.

More learnings around land titles: The title at the moment is a "residue" title. Once we've got Code of Compliance on the new house, we have to have the property resurveyed and a new flats plan drawn up, and new title documents. These Title documents have to go to the other cross-lease owners for signing. This is when we incur and have to pay their lawyers' fees. Whilst, the Council may still grant a reasonable building consent even when the other cross-lease owner might have opposed it; things can come unstuck at the new Title stage. An opposing cross-lease partner could at this point withhold agreement, forcing costly legal action. And, we'll need that new title to refinance over the land with house. Without it a mortgage is only secured over the land only. Oops!

So, we move in to tighter budgetry conditions from tomorrow as uncertain weather on the horizon threatens to wash away all that lovely capital gain we thought we'd secured.