STOP: I can’t complete a house purchase

Buying a house is a big deal, it’s a major milestone for most people, and worthy of a celebration, but if you find yourself having second thoughts about a property or are wanting to back out of a property deal completely, celebrating will be far from your mind.

When can I stop a house purchase?

A signed Sale and Purchase Agreement is a legally binding contract between you and the seller, which becomes unconditional once the allocated time for meeting your conditions has been reached. When a house purchased in an auction, the contract is unconditional at the drop of the hammer. An unconditional agreement is extremely difficult to end without being sued by the vendor. Prior to entering into an agreement, it is highly advised that you let a property lawyer review the agreement prior to signing it. 

You should not be relying on your pre-approved finance as being a bullet proof, these may only be active for a certain period and afterwards you may have to reapply. You need to keep this in mind if the settlement date is after your pre-approval expiring, as you find that your finance is declined when you reapply.

What are the consequences of pulling out of a house purchase?

People pull out of property deals for many different reasons. Lack of funds, a change in circumstances such as losing your job. This can result one or all of the following happening;

• Forced to buy the property
• Lose your deposit
• Pay interest from the day of settlement (check the Sales and Purchase Agreement for interest rate)
• Cover vendor costs for reselling the property and the difference in the sale price

Weston Ward & Lascelles have decades of experience advising clients on property law and conveyancing in Christchurch NZ. Helping people purchase their dream home is the ideal scenario, but the other side of the coin are the people who are unable to complete a purchase. It is a distressing and stressful time for these clients, and our property legal team work to achieve the best possible outcome so they can move on with their lives.

If you would like any advice about your situation, our free pre auction package review, or Christchurch conveyancers, please call 03 379 1740 for further information.