Buying your first home:
The 10 steps in order

Most first home buyers think the hard part is finding the house. It usually isn't. The hard part is knowing which step you're on, what has to happen next, and what you can still undo.

Buying a home in New Zealand runs through ten steps. Here they are on one map. Each step links to its section below.

Start with why, not with listings. A home has to fit the way you actually live: your work and commute, your family, your weekends, how much time you want to spend on maintenance. A house that looks perfect at the open home but fights your lifestyle every day is the wrong house.

And it has to fit where you're going, not just where you are. So before anything else, decide what this home's strategy is for the next few years.

A long-term family home

You're buying for years, not for the next move. Space, schools and the neighbourhood matter more than the cheapest way in.

A stepping stone

A first home for a few years, before something bigger. What it will sell for later matters as much as how it feels now.

A home as an asset

Property is also an asset. Maybe part of it is rented out, or you're buying where you expect the area to grow. Be clear what the asset is for, and what lifestyle it has to support while you live in it.

Whichever it is, remember that plans change. Jobs move, families grow, life happens. A good choice still works if your plan shifts halfway through.

Then be honest about condition and maintenance:

• How much maintenance are you ready for? Time, money and weekends all count.
• Does it need to be brand new? A new build needs very little maintenance in its first years, and you usually pay for that.
• Are you handy? If you can fix and renovate yourself, a home that needs work can be the better buy: you pay less for it and keep the benefit of what you improve.

Your lifestyle and your strategy then point to the type of home: standalone, townhouse or apartment. Each one trades freedom against ease of upkeep.

Standalone house

The most freedom, and all the maintenance is yours.

Townhouse

Often newer, with less upkeep. May have body corporate fees.

Apartment

The most affordable way in. Always a body corporate, so check the building’s finances too.

Last, split your list into must-haves and nice-to-haves: location and commute, schools, bedrooms, parking, a yard, sun, a quiet street. The must-haves come straight from your lifestyle and your strategy. Everything else is a nice-to-have, however good it looks on the day.

The goal is a home that fits this stage, not a perfect one.

Before you look for your home, learn the market. You're not buying yet. You're training your eye, so that when the right house comes along you recognise it, and you recognise the wrong price too.

Three habits do most of the work.

Sold prices, not asking prices

An asking price is what a seller hopes for. A sold price is what a buyer actually paid. Many listings show no price at all (auction, tender, deadline sale, “by negotiation”), so sales history on homes.co.nz is your best guide.

The area's future

Look at how the area is developing: new roads and transport, schools, zoning changes. The council's district plan shows what's coming. Infrastructure shapes what a suburb will be worth to live in, and to sell in, years from now.

5 to 10 open homes

Go just to compare, with no intention of buying. After five to ten, you start to feel what a home is worth. Visit the areas you like in the evening, at the weekend and in rush hour too.

Set up saved searches on Trade Me Property, OneRoof and realestate.co.nz, and let the market come to you for a few weeks.

Then you'll know a bargain from a sales pitch.

Buying a home is a team effort, and most first buyers meet their team too late: in the week they find the house. Line them up before you need them, and choose them the way you'd choose anyone you trust with your money.

Mortgage adviser

Compares lenders, helps with the application and structures the loan. Optional: you can go to a bank directly, but a bank can only offer its own products. On most home loans the lender pays the adviser a commission, so you don't pay a fee. Ask about clawback before you sign.

Solicitor

Reviews the agreement and runs settlement. Find one before your first offer, not after: they suggest your conditions and help with the KiwiSaver withdrawal.

Building inspector

Checks the house before you commit. Their report is often the difference between a good buy and an expensive surprise.

Then there's the person you'll talk to most: the real estate agent. Helpful, knows the area, sometimes the first to hear about a listing. But the agent works for the seller. That's not a criticism, it's their job. It just means the rest of your team has to be on your side.

You can also hire a buyer's agent, who works for you rather than the seller. Worth considering if you're short on time or new to the area, but only if you trust them. Ask how they're paid.

Your team should work for you. Make sure they do.

Get this right before you fall in love with a house. There are two numbers here, and they are not the same: what a bank will lend you, and what you can really afford.

The maximum debt-to-income ratio (DTI) for an owner-occupier is 6 times gross income, but a bank may approve less, depending on your financial position. That's a ceiling, not a target. Inside it, the bank looks at three things.

Income and expenses

Tested at the bank's test rate, which sits above the rate you'll actually pay.

Income stability

Self-employed borrowers usually need two years of financials, though some lenders accept one.

Account conduct

Usually the last three to six months. Card limits count even if you never use them, and so does buy-now-pay-later.

Then run your own test. Check what your repayment would be at a higher rate than today's. If it still fits your life, with room for the unexpected, that's your real limit.

Pre-approval is the bank's preliminary yes: we're ready to lend you up to this amount. With a deposit of 20% or more it's usually straightforward. Below 20%, it depends on the bank and on the month. If pre-approval isn't possible, the bank can assess a live deal instead: your application against a specific home, usually with your offer conditional on finance.

From here on, keep your finances quiet. No new loans, no higher card limits, no buy-now-pay-later.

Banks notice everything, including that card limit you forgot about.

Now you search for real, against your why from step 1. Open homes are designed to make you feel at home: fresh paint, good furniture, the smell of coffee. That's staging, and its job is to sell. Your job is to look past it, for two things.

And always ask why they're selling. A job move, a growing family and a leaking roof are three very different stories behind the same listing. Then ask how long it's been on the market, whether there's a LIM or a building report, and for a townhouse or apartment, what the body corporate fees are.

Write notes after every viewing. By the fifth house, they all blur together. The price you pay and the problems you miss today decide what this home is worth to you years from now.

A good deal starts not when you sell, but when you buy.

You've found the one. The offer is a written proposal on the Sale and Purchase Agreement, usually made through the agent. It sets the price, your conditions, the dates by which each condition must be met, and the settlement date.

Once both sides sign, the agreement is binding. Your conditions give you time to check the house properly before you're fully committed. The checks usually take 1 to 3 weeks, depending on the property.

Building inspection

A professional look at the structure, moisture and everything you couldn't see at the open home.

LIM

The council's report on consents and code compliance certificates (CCC), natural hazards, zoning and rates. It can take up to 10 working days, so order it early.

Title

Checked by your solicitor.

Valuation

Often required by the bank, to confirm the home is worth what you're paying.

Finance

The bank's final approval for this property. More in step 7.

Insurance

The home has to be insurable from settlement day, or the bank won't lend.

A problem found in the checks isn't automatically the end. You can negotiate the price, ask the seller to fix it, or withdraw if the condition allows. Your solicitor advises which.

Conditions are your safety net. Use them.

This runs alongside step 6, and it's the step most often confused with something you already have. Pre-approval feels like a yes, and it is: a yes to you. Final approval is a yes to you and this specific property.

Between the two, the bank also checks that nothing about you has changed. A new job, a new car loan or a drop in income can change the answer.

With a finance condition, approval has to land before you go unconditional, and if the bank declines, you can withdraw. Without one, at auction or with an unconditional offer, finance must be sorted before you commit.

Pre-approval is a promise. Final approval is the signature.

Every check is back and every answer is fine. You confirm through your solicitor that the deal is unconditional. From here, changing your mind gets very expensive.

After unconditional, you can still walk away. It just costs a lot.

Pulling out now is a breach of contract. It can cost you your deposit, and the seller can claim their losses as well. That's why every check before this point matters so much. Here is what you can still do at each stage:

Before you sign

You can walk away for any reason. All you lose is what you've spent on reports.

Signed, conditions open

You can withdraw only under a condition that hasn't been met. Your solicitor confirms how.

Unconditional

You can still pull out, but it's a breach of contract. It can cost you your deposit and a claim for the seller's losses.

Going unconditional is also when you pay the deposit under the agreement. It's easy to confuse with the deposit your bank talks about, and they are two different things.

Then you prepare for settlement: decide your loan structure (fixed portions for different terms, floating, offset), sign the loan documents with your solicitor, confirm the insurance starts on settlement day, and check the settlement statement line by line.

Cold feet are cheaper before unconditional.

Settlement day is when the money moves and the home becomes yours. Most of it happens between the bank and the solicitors. Your part comes a few days earlier.

Two to five days before, you do a pre-settlement inspection. It's your last chance to see that you're getting what you paid for. Check that:

• The home is in the same condition as when you bought it.
• The chattels are all there.
• Any agreed work is done.
• Taps, lights and heating work.

Report any problem to your solicitor before settlement, not after. Once the money has moved, fixing it gets much harder.

On the day, the bank pays the seller through the solicitors, and your solicitor registers the title in your name with LINZ, the government land registry, along with the bank's mortgage. Then the agent hands over the keys, usually around midday. Some movers will take a same-day afternoon booking, but settlements do run late. It's safer to book them for the next day. And set up power, internet and water in your name beforehand.

Keys at midday. Furniture tomorrow. Champagne today.

The keys are yours. Congratulations. Now the next stage starts: you're running a loan and a home, and both reward a little attention.

Settle in and automate your payments

The mortgage usually comes out automatically. Set up direct debits for rates and insurance, and put a little aside each month for repairs. The first year in a new home usually finds something to fix.

Plan the next few years

Know when each fixed term ends, and decide in advance, not in the week the bank's letter arrives. If you can, pay a little extra: even small amounts cut the total interest a lot. Fixed portions usually limit how much extra you can pay without a fee.

Review your rates and LVR regularly

LVR is your loan as a percentage of the home's value. With less than a 20% deposit, it starts above 80%, and the rate or fees may be higher. Once it drops to 80% or below, through repayments or price growth, ask the bank to review your terms.

A good mortgage adviser often tracks all of this for you: refix reminders, structure reviews, LVR.

Ready for the next step?

Wherever you are on the map, the next step is always clearer with your own numbers in front of you.