3 unexpected costs to prepare for when buying your first home

When I made an offer my first home, I was so relieved. Finally, I would have four walls to call my own.

Then I realised I’d made a crucial mistake. We’d forgotten to keep a small slush fund for the costs that come up during the sale.

Those costs can run into the thousands, and we only just managed to scrape it together. Sure, you’ve just saved up tens of thousands for the house deposit, but you still need to have a few thousand more on hand and ready to pay all the people who will make your dream a reality.

So learn from my mistakes, and make sure you don’t fall at the final hurdle. Here’s some core costs to prepare for.

1. A builder’s report

Please don’t buy a home without one of these. For anywhere between $300-$600 a qualified inspector can tell you if a building is leaky, has maintenance that’s been ignored for so long it’s become damage, has mould issues, or has a structural issue. As in, a few hundred bucks could save you tens of thousands down the line, sometimes more.

Make a builder’s report a condition of sale, so that you only have to pay for one if the buyer likes your offer. To make sure you get someone who’s qualified for the job, check out The New Zealand Institute of Building Surveyors and the Building Officials Institute of New Zealand.

2. A LIM report

This one helps you figure out the past and future of your property. It’s the information the council holds on your house, including what work has been consented, and if there’s been problems with flooding, or land slips. The costs of this one vary – sometimes the seller already has the LIM, and will let you look at it for free. Sometimes you need to pay $300-$400 for a copy from the council. Or sometimes the council will let you look at their copy for free.

Be hard-nosed about this. Just because you’re ok with work that’s been done without a consent, doesn’t mean it won’t come back to haunt you. It can cause problems getting insurance or a mortgage for your house, or put off buyers in the future. See if you can convince the seller to get a Certificate of Acceptance before selling, to bring it up to code. You don’t want to be stuck with footing that cost yourself.

3. A lawyer

There’s a lot of paperwork that goes with buying a house, and you’ll need a lawyer to at least rubber stamp it. But again, you probably want more than a rubber stamp. You need to see this as an investment in avoiding future problems that could be ruinous. It might seem like a big fee now, but it’s nothing compared to how things could go it you try to scrimp on it.

A good property lawyer should pull information on the land title, make sure all the boundaries are correct, and that you understand what type of title you’re buying. It can be anywhere from $250 to $3000. Find a good one by looking at the Law Society’s list of property lawyers.

- Frances Cook is the host of the personal finance podcast Cooking the Books. She is not a financial adviser, and all information is general in nature. For individual advice, see a financial adviser.

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