Get a pre-purchase inspection to know what you're buying, and when to walk away.
When time is tight, or you've missed out on several homes, it can be tempting to skimp on getting a full builder's report. This is risky. Get an independent pre-purchase inspection to:
- Avoid expensive mistakes, eg discovering the house needs rewiring after you move in.
- Give you negotiating power, eg if work needs doing that isn't a deal breaker.
- Help you prioritise, eg knowing to budget for a new roof before spending on the kitchen.
A pre-purchase inspection— or building report — looks for signs of any problems. It's up to you to follow up on any issues the report raises — with questions to the seller or more expert advice.
Possible issues
A property's age, location and building materials affect where there's most likely to be problems. Use this tool to discover potential hot spots on the property you're thinking of buying.
Property tool checker(external link) — Settled
Building report from vendor
Some sellers include a building report with the documents about the home. It's best not to rely on this. You're unlikely to have any come back if the report misses anything. This is because the vendor is the client — not you. A buyer's pre-purchase inspection can flag issues not listed in the vendor's report.
Pre-purchase inspection
The standard pre-purchase inspection is a Residential Property Inspection NZS 4306:2005. This is a visual inspection of the property. This means it won't identify any problems concealed behind finished surfaces, eg plumbing, framing, insulation or wiring.
During the inspection, the inspector looks for signs of any problems, eg:
- borer
- rot
- damp
- structural damage
- drainage issues
- dodgy wiring
- faulty pipes.
They will take photos of problem areas and comment on them in the report. This includes signs of gradual deterioration as well as things that may be an issue now.
Some inspectors are happy for you to go to the inspection. This is chance to take your own photos and see any issues firsthand. Going along may cost slightly more — the inspection is likely to take longer than if they were doing it alone.
Building consent
A pre-purchase inspection may identify where work has been done on the original house, eg a dug out basement, a new room or deck. It will not tell you if the renovations have building consent. Find this out from council records and/or a LIM report.
LIM report — Prepare to make an offer
Work requiring consent(external link) — Building Performance
A pre-purchase inspection looks for clues. You may need to find out more based on what's found.
Example — No consent = no deal
Matt and Dave's building report suggests the toilet in the property they're keen on has been moved in a renovation. Their pre-purchase building inspector advises them to check the work has the necessary consent. Dave orders a LIM report from the council. It doesn't list consent being given— which Dave knows can cause problems with insurance. He asks the council what they would need to do to get the work signed off. It's more than Matt and Dave are willing to take on. They decide to keep looking.
Find a pre-purchase building inspector
Choose a pre-purchase building inspector (also called a pre-purchase building surveyor). Check they can do a NZS 4306 pre-purchase inspection — the NZ standard — and have up-to-date knowledge and skills.
Ask to see proof of their indemnity insurance. This protects you if they make a professional mistake, eg miss something. Check your contract to see what their insurance covers, too.
It's best to use a member of:
- Building Officials Institute of New Zealand — pre-purchase building surveyors (external link)
- NZ Institute of Building Inspectors(external link)
Make sure the person inspecting the property is qualified. Think twice about using an ex-builder mate.
Specialist reports
Get a more thorough inspection if you suspect:
- earthquake damage
- the property is vulnerable to natural hazards, eg tsunami, flooding and slips
- it may be a leaky home
- there is a question over boundaries.
Speak to a registered building surveyor. Explain what you're concerned about and ask what kind of inspection they are qualified to carry out. If they don't have the right expertise, they may refer you to an engineer.
Find a registered building surveyor(external link) — New Zealand Institute of Building Surveyors
Find an engineer(external link) — Engineering New Zealand
Understand your report
A thorough building report will list everything that could be wrong with the property — from minor fix-up to major work. Don't be afraid to go back and ask what things mean.
This guide explains common jargon.
Glossary of building terms(external link) — Building Guide
Follow up on problems
If there are problems, ask:
- What could happen if the problem is left?
- How urgently does the problem needs fixing?
The pre-purchase inspection may not be able to say for sure if something is wrong. For example, higher than normal moisture levels could signal serious rot or less severe damp on a wet day. You may need to follow up to find out more, eg:
- ask the vendors more questions
- hire a licensed building practitioner to access the area behind a wall, or in the ceiling
- get a report from a registered building surveyor
- or a geotechnical or building engineer's report.
It's a good idea to ask a builder or other tradesperson to estimate how much any repairs would cost. Use this information to decide:
- what you're prepared to fix yourself
- what you might ask the seller to do as a condition of your offer
- if you'd rather walk away from the sale.
Example — Negotiating a dodgy pipe
Nikaia and Greg have their heart set on a 1940s ex-state house. The pre-purchase property inspection shows black piping that is known to leak has been used to replace one of the original pipes. As the rest of the house appears to be sound, the couple talk to the vendor about the tricky pipe. The vendor agrees to replace the black piping and provide a plumber's certificate to show the work has been done to code. Nikaia and Greg ask their lawyer to make this a condition of the sale and put in a formal offer.
Red flags
Any of the following could be expensive to sort out:
Black plastic piping: Check for them if the house was built or re-plumbed around the late 1970s to early 1980s. They are known to leak. Insurers are unlikely cover damage caused by this piping, if you knew they were there.
Weatherside: This weatherboard is known to leak. If the house was built in the early 80s it may have Weatherside.
Plaster-style monolithic cladding: Used in the 1980s to the mid-2000s, many "leaky homes" have this cladding. Exterior walls typically have an unbroken or smooth finish.
Asbestos: Used widely from mid-1940s until the mid-1980s. It may be on ceilings, roofs, under lino, fences. If asbestos is found at a property, get specialist advice on what risk it poses, how it could be removed, how long it will take to remove, and the removal cost.
Problem building materials(external link) — Settled
Learning about leaky buildings(external link) — Settled
Problems with an inspector or surveyor
When you hire a pre-purchase building inspector or other expert, you're protected by the Consumer Guarantees Act. The person you're hiring must:
- do a professional job
- give you the type of report you ask for
- do it in a reasonable timeframe
- charge a reasonable price.
When you're in a rush to put in an offer, it's natural to want to hurry the inspection. Most building inspectors try to work with your timeframes. But be realistic about how long it will take to do a thorough job.
If you have any problems, eg you question an invoice, aren't happy with how the report is laid out, first try to work it out with your surveyor. If you don't get anywhere, the Disputes Tribunal or District Court may be your next step.
How to make a claim(external link) — Disputes Tribunal
You can also report them to their professional organisation, if they are a member.
Building Officials Institute of New Zealand (BOINZ)(external link)
New Zealand Institute of Building Surveyors (NZIBS)(external link)