Why first home buyers need building reports
Whether you’re buying a home that’s just been built or something that’s had a storied history, it’s probably smart to get a building report.
They’re the easiest way to become fully aware of a property’s imperfections, ranging from structural issues to predicting what part of the house might get damp in winter. Here’s the lowdown on why people get them, and how much they cost.
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What does a building report cover?
You might be asking yourself, “are pre-purchase building inspections worth it?”
A building report is your one-stop-shop for knowing both the good and the bad about a home that you’re interested in. If you want to rely on a building report, you should make sure that a registered building inspector with professional indemnity insurance is the one you pick for the job.
Building reports cover:
- Issues with the building’s structure - Existing issues around moisture, asbestos, retaining walls and other concerns for the property - Areas of the house that need maintenance - Whether or not your house may be a leaky building - Whether the house suffers from problems that will affect its condition over time
Pre-purchase inspections are non-invasive but you can expect the report to detail the results of moisture testing, defective plumbing and more. Inspections should be very thorough and will not only cover off potential problems with a property but also mention bits of the house that are in good condition.
A report isn’t just all words either: there will be accompanying photos taken by the inspector of various areas around the building.
A building report is also a good way to find out if work has been done on the property that you’re intending to buy. Often, a qualified inspector will be able to tell you if there’s been any major construction done to a home.
You can then take that tidbit to your lawyer, who will be able to cross-reference the property’s LIM report and make sure that any work identified had the necessary consents. This sort of background information helps you build a better picture of the condition of your home, and of the vendor’s ability to fulfil their warranties should you both enter into a sale and purchase agreement.
How much is a building report?
As we’ve advised, it’s best to make sure that a qualified building inspector (and not just a mate who’s into DIY) looks at a property that you’re wanting to buy.
In the event that something is wrong with the house that should have reasonably been uncovered by a competent inspection, you're unlikely to have legal recourse if your property inspector was not a professional with indemnity insurance.
Much like Land Information Memorandums or publicly accessible Council records, sometimes the vendor’s real estate agent will have a building report handy. However, you can only legally rely on a report that you have obtained - if you accept the vendor’s and find a problem later, then you have very limited options.
Even though these inspections and reports can be costly, they provide the information that you need to make an informed decision on buying a property.
The average price of an inspection and report can run you upwards of $370 for a home that’s around one bedroom and can top out at over $1000 depending on the size of the property. It’s a good idea to get a quote from the inspector that you’re planning to use before committing to a report so you aren’t surprised by any hidden builder report costs.
If you’re unsure about how long a building report takes, the house inspections themselves usually take a few hours but a report could take a week or so to write up.
When to get a building inspection
Because a building report contains so much crucial information about a home, our advice is to get one after you’ve found a house that you’re seriously considering. These reports don’t come cheap!
If you’re not sure about when to get a builder’s report, our recommendation is after you’ve signed a sales and purchase agreement for a home. One way to protect yourself as a buyer is to make the agreement conditional on a building report; if an inspection brings up any issues, then you will have cause to terminate the agreement if the vendor can’t fix them.
Building report conditions are fairly commonplace, so your lawyer and the vendor’s lawyer should be able to arrange for this to be accommodated to give you peace of mind.
If you’re wanting recommendations for a building inspector to get the ball rolling, the New Zealand Institute of Building Inspectors and the Building Officials Institute of New Zealand are great places to find someone.
Do you have other questions about buying your first home or about what common sale and purchase agreement conditions are? Check out our first home buyers hub , with advice on everything from LIM reports to KiwiSaver first home grant eligibility.
