Top 5 tips when buying a home

Buying a home can be a real minefield. To help you through the process we have put together our top 5 tips.

1. Talk to your lawyer before signing your contract.

The Sale and Purchase Agreement is a legally binding contract once signed by you and the seller.  Talk to your lawyer about your concerns and what you want to achieve so they can write the clauses to achieve what you want. Short simple clauses are often better, particularly with the building clause.  Beware the “vendor right to remedy”, which may require you buy the house if the vendor says they will address the matters – whether they do or not.  The need to “provide the vendor your report if withdrawing” is to challenge your reasonableness and take advantage of your commissioned building report.  As a vendor make sure you know what has to be done to remedy before you warrant to remedy, as a proper remedy may be really expensive or not even possible if around council compliance matters.

2. If the report your given is not in your name – you can’t rely on it.

Any report that is provided to you that has not been undertaken for you should be treated as a guide only. The types of reports that should be in your name include LIM reports, building surveys (report), valuation report and engineers reports. If your name is not on the report, than the author may have no liability to you.

3. Only use an Accredited Building Surveyor.

The house inspection industry is not regulated by law.  Anybody can set up as a house inspector with all sorts of pseudo credentials being used.  There is no NZ formal qualification for pre-purchase inspectors or titles such as a Qualified inspector or Certified home inspector.  A Licenced Building Practitioner is only licensed to do certain building works – not building inspections.  Members of BOINZ, NZIBI, or NZIB are members by merely signing up – and does not require Standard compliance, qualifications or Professional Indemnity. NZIBS members known as Registered Building Surveyors must have Professional Indemnity, however mostly specialise in weathtertightness cases.  Qualifications vary so you may want to clarify their qualifications and whether the report will be to the inspection standard.  An Accredited Building Surveyor is accredited through a BOINZ process to ensure you have an industry assessed expert undertake a Standard compliant survey.

We are seeing some horrifying examples of sub-standard reports being used as pre-sale and pre-purchase reports, which have proven to be substantially flawed when compared with an Accredited Building Surveyors report.  The worst case we recently saw was a report that warranted the house had no significant maintenance due for a 5-year period and was in fact a high weathertightness risk,  plaster clad home that we found evidence of leaking in multiple areas and rot damage!  The home will likely require at minimum a full re-clad and partial rebuild.  In instances like these the home owner, real estate salesperson and inspector are lining themselves up as defendants – and who wants to be a party to that issue!

4. The agent is not your friend.

Realise the agent is working for the seller to get the best sale in the shortest possible time.  However, a good quality agent will know the importance of you being informed when purchasing, so have your own team of suitably qualified professionals working for you to rely on.

5. A Land Information Memorandum (LIM) report does not tell you about unauthorised work.

With the recent earthquakes, insurers seem to be taking a much keener interest in unauthorised work, particularly relating to the foundations or structure.  A LIM will not tell you about unauthorised building work unless the Council knows about it and decides to tell you.  The only way to know if all the work is authorised is to get all the plans from the Council property file and check how it has evolved and whether it matches what is now there.