Pre-Purchase Building Inspection: Do You Need One?

What is a pre-purchase building inspection?

A pre-purchase building inspection, or property inspection, is an inspection of a property that is undertaken prior to its purchase. The aim of the inspection is to identify any potential structural issues with the home.

For example, while a house may look structurally sound and in good condition, a building inspection could identify issues with the foundations or roof, or hidden pest/water damage.

Depending on the results of the building report, it could influence your decision. For example, if there is an estimated $30,000 of work that needs to be undertaken, it could be factored into the price negotiation. Or, you may find you are no longer interested in the property at all.

Of course, if you find the house is in excellent condition, it gives peace of mind going forward with the purchase.

Is a pre-purchase inspection the same as a LIM report?

No, a LIM report is separate from a pre-purchase building inspection.

A council’s LIM report is a record of information on a property. It includes standard information, such as rates and building consents. But it also contains details about risks such as erosion, contamination, drainage, landslips and flooding.

A LIM report can also alert you to illegal construction work on a property, or the fact that it might be a leaky home.

While property vendors often have LIM reports for potential purchases to study, if the LIM is at all out of date, it’s worth getting your hands on an up-to-date copy. You can order a LIM through the local council or through a lawyer.

→Related article: Help for First Home Buyers: What’s on Offer?

What does a pre-purchase building inspection cover?

What is included in the inspection will depend on who carries it out, and what level of inspection you opt for. However, commonly, a full pre-purchase inspection will look for issues such as

• Borer
• Rot
• Damp
• Structural damage
• Drainage issues
• Dodgy wiring
• Faulty pipes.

During the inspection, you can expect your provider to inspect:

	Outside	Fences, drives, paths, retaining walls, clothes line
	Under-floor area	Foundations, piles, timber framing, insulation, ventilation and ground moisture
	Services	Plumbing, drainage, electrical and other specialist services
	Outbuildings	Garages, sheds, glasshouses and sleepouts
	Exterior	Cladding systems, weathertightness, foundations, windows, doors and timber finishings
	Roof space	Structure, insulation, underside of roofing
	Roof	Roofing materials, gutters and chimneys
	Interior	Inspect each room to identify condition of floor, walls and ceilings, along with the presence of services and systems

Cheapest Home Loan Rates for First Home Buyers

The table below displays some of the 2-year fixed-rate home loans on our database (some may have links to lenders’ websites) that are available for first home buyers. This table is sorted by Star Rating (highest to lowest), followed by company name (alphabetical). Products shown are principal and interest home loans available for a loan amount of $500K in Auckland. Before committing to a particular home loan product, check upfront with your lender and read the applicable loan documentation to confirm whether the terms of the loan meet your needs and repayment capacity. Use Canstar’s home loan selector to view a wider range of home loan products. Canstar may earn a fee for referrals.

Compare Cheapest Home Loan Rates for First Home Buyers

How much does it cost?

There isn’t a fixed price for a building inspection but, typically, a full written report will cost upwards of the mid-to-high $300 mark. That’s at the bare minimum. For larger homes, you can expect to pay hundreds of dollars more than this.

Who is a building inspection carried out by?

Essentially, anybody can set up as a house inspector and claim standard compliance. So anyone can do a building inspection. But, that doesn’t mean just anyone should.

If you want true peace of mind, it pays to employ a qualified building inspector that carries out their work in accordance with the New Zealand Property Inspection Standard. Importantly, you should always opt for an inspector who has professional indemnity insurance. This means that if an issue arises with the home after you’ve bought it that should have been identified in the report, you can potentially claim compensation.

While your tradie friend can give his opinion, the professional you use for your home inspection should be a member of an organisation such as the NZ Institute of Building Inspectors, the NZ Institute of Building Surveyors, or the Institution of Professional Engineers New Zealand.

Ensure you choose the inspector

Some real estate agents may suggest an inspector, or provide a building inspection report that was carried out by an inspector of their choosing. However, to ensure a fair and trustworthy inspection, you should choose your own suitably qualified inspector to carry out the report.

While most sellers are trustworthy, there have been reports of estate agents who have employed “their own selected and favoured inspectors to provide soft vendor reports on behalf of sellers”.

These reports may not be up to standard, or may brush over issues that are more serious than you are led to believe.

→Related article: The 11 Red Flags to Look For at a Home Inspection

Do I need a pre-purchase building inspection?

Yes, you should always get a pre-purchase building inspection before purchasing a home. A house is a big financial commitment and one that typically requires your life savings and a hefty mortgage. If you’re throwing all your money and sinking yourself into debt for a property, you need to know its a solid investment.

Think how you’d feel if you skimped on an inspection to save a few hundred dollars, only to face repair bills of thousands of dollars to fix defects that would have shown up on a building report?

And even if there are no major structural issues, knowledge of any possible problems can give you an upper hand during price negotiations.

When do I need to get the report done?

If you’re buying at auction, you need to get the report done prior to bidding. As, typically, auction sales are unconditional.

If you’re buying a house through other methods, you can make an offer that is conditional on a satisfactory building inspection. As part of the process, you may also be able to add a clause that allows you to negotiate the sale based on the inspection results. For example, a reduced price, or repairs that need to be carried out before the sale goes through.

I’m worried about missing out, should I skip the pre-purchase inspection?

The property market has run hot over the past few years. And amid the fervour, there have been reports of people skipping pre-purchase inspections in an attempt to get deals over the line. Fearing that putting in conditional offers will see them miss out.

While it can be tempting to skip a pre-purchase building inspection, don’t. And if you are pressured by the vendor or their agent to bypass one, treat it as a red flag. After all, being advised to not inspect the thing you’re buying is hardly a good sign.

At the very least, if you feel going conditional will impact your offer being accepted, you should get an inspection done prior to making the offer. Because if you bypass an inspection, and the property has significant issues, you have little option but to pay up the cost of repairs.

Cheapest Home Loan Rates for First Home Buyers

The table below displays some of the 2-year fixed-rate home loans on our database (some may have links to lenders’ websites) that are available for first home buyers. This table is sorted by Star Rating (highest to lowest), followed by company name (alphabetical). Products shown are principal and interest home loans available for a loan amount of $500K in Auckland. Before committing to a particular home loan product, check upfront with your lender and read the applicable loan documentation to confirm whether the terms of the loan meet your needs and repayment capacity. Use Canstar’s home loan selector to view a wider range of home loan products. Canstar may earn a fee for referrals.

Compare Cheapest Home Loan Rates for First Home Buyers

About the author of this page

This report was written by Canstar Content Producer, Andrew Broadley. Andrew is an experienced writer with a wide range of industry experience. Starting out, he cut his teeth working as a writer for print and online magazines, and he has worked in both journalism and editorial roles. His content has covered lifestyle and culture, marketing and, more recently, finance for Canstar.