Document background
The Earnest Money Contract is a crucial document in New Zealand property transactions, designed to protect both buyers and sellers during the initial stages of a property purchase. It is typically used when a buyer wishes to demonstrate serious intent to purchase a property while maintaining certain contingencies and completing due diligence. The document details the earnest money amount (usually 5-10% of the purchase price), holding arrangements, conditions for release, and the rights and obligations of all parties. This contract type is particularly important in New Zealand's property market, where it provides a structured approach to property transactions while complying with local property law requirements and commercial practices. It serves as a stepping stone to the final sale and purchase agreement, offering protection to both parties during the transaction process.
