Preparing to buy your first home - Part 1: Understanding the jargon

Buying your first home can be daunting, there is a lot of jargon and everyone is trying to get their cut.

Preparing for what you are doing will make the process a lot easier for you.

The team at DUX financial has been providing advice to first home buyers for 16 years, and so have a lot of tips to make sure it’s as stress free as possible. Below is the first tip to start with.


- any offer you make needs to have a deposit on the contract (lets call this the contract deposit). Don’t get this confused with the deposit the bank needs (lets call this the finance deposit), which needs to be at least 10%.

The contract deposit is the amount you pay to the vendors lawyer when you go unconditional. The agent typically wants 10%, and this is ok, but if you don’t have this in cash it can be a pain.

For example if you are offering 600K, you would be expected to come up with 60K. if your finance deposit is 50K from KiwiSaver and 10K from cash, then you can only put down the 10K as a deposit, as it takes up to 10 days to get the KiwiSaver out once you go unconditional, and you need to pay the contract deposit within 3 working days.

The agent may suggest you get an overdraft or borrow from family, but we don’t recommend this as its just a cost to you. 

We suggest you write down the contract deposit you can pay on the S&P agreement, and then put a note below this that the rest of your money is in KiwiSaver.

The vendor is looking at the price offered and deposit will be well down the list of what they are looking for when it comes to winning an offer.

If you have any questions on the house buying process that we can advise on as a quick tip, get in touch, and for assistance with buying and financing your first home, don’t hesitate to get in touch with the DUX team.

BlogAlan Borthwick