Legal and Negotiation Processes
Preparation and Planning
Settlement and Post-Purchase
The Market and Compliance
Viewing and Inspecting Properties

How To Use The Step Guides
Buyer Introduction
Your Current Scenario
Understanding Real Estate Market Dynamics and Influences
Assessing the Benefits of Owning vs. Renting
Assessing Your Readiness and Financial Planning for Homeownership
Establishing a Budget for Property Purchase
Deciding to Work With A Mortgage or Financial Adviser
Deciding on Whether to Proceed with Home Buying
Analysing Financial Capacity for a Mortgage in New Zealand
Getting Pre-Approved for a Mortgage
Proceeding As a Cash Buyer
Attending Property Seminars and Workshops
Exploring Various Mortgage Options in New Zealand
Property Sale Types in New Zealand
Anti Money Laundering Rules and Regulations
Determining Long-Term Goals and Future Plans for Property Buying
Costs Associated with Buying a Property
Creating a List of Must-Haves and Nice-to-Haves
Potential Purchasing Partners for Property Buying
Researching the Housing Market in Your Desired Area
Location and Commuting
Understanding Property Taxes in New Zealand
How to Compare The Values of Similar Properties
Exploring Property Listings and Conducting Online Research for Buying Property
Interacting with Real Estate Agents
Arranging Private Viewings of Properties
Guide to Attending Open Homes and Viewing Properties
Arranging Professional Property Inspections
Seeking Comprehensive Legal Advice Before Making an Offer
Choosing the Right Conveyancing Lawyer when Buying Property
Understanding Legal Obligations and Rights as a Buyer
Considering Community Amenities and Infrastructure
Conditional Offers Versus Unconditional Offers
Formulating an Offer Strategy
Buying a Property at Auction
Buyer First Mover Advantage Offer Strategy
Engaging in Negotiation of Purchase Terms
Ensuring Compliance with Agreement Conditions When Buying Property
Discussing Agreement Details with Your Legal Advisor
Undertaking a Geotechnical Report
Reviewing Property Inspection Reports for Potential Issues

Requesting and Analysing a LIM Report
Requesting and Analysing a PIM Report
Things to Do During Due Diligence Period to Prepare for Move
Advantages and Disadvantages of Using a Moving Company
Organising Home and Contents Insurance
Settlement Day Procedures
How to Deal With Settlement Delays in Property Transactions
Planning Interior Layout and Design
Settling In and Post Purchase Steps
Purchasing Necessary Furniture and Appliances
Tools and Services To Help Manage Your Property & Finances Post Purchase
Re-evaluating Your Budget Three Months Post-Property Settlement

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Buy / Step 42 of 54

Reviewing Property Inspection Reports for Potential Issues

What to look out for in your building inspection report

Buying a property in New Zealand is an exciting venture, but it also comes with a fair share of due diligence. One of the most critical aspects of this process is reviewing inspection reports to identify potential issues that could affect your investment. In this comprehensive guide, we'll take you through the key problems to look out for, such as leaky buildings, asbestos, methamphetamine contamination, flooding, dampness and mould.

Pests such as termites (also known as white ants), borer beetles, rats and mice can cause extensive damage if left unchecked. Your inspector should be on the lookout for signs of infestations including droppings, damaged woodwork or nesting materials within the property.

Once you've unearthed potential issues from your property inspection report, it's crucial to follow a strategic and thoughtful course of action. Here are the key steps you should take:

Seek Expert Advice

Before making any decisions, it is important to consult with professionals who specialise in the area of concern identified. For instance, if an issue with the building's structure is flagged, a structural engineer should be your go-to expert. Similarly, for electrical issues, seek advice from a certified electrician. These professionals can provide further evaluations and give you a more detailed understanding of the problem at hand.

Estimate Repair Costs

After getting a clear picture of what needs fixing, the next step is to get quotes for the repair or remediation work required. This can help you understand the additional financial burden that may come with purchasing the property.


Armed with a comprehensive understanding of the property's condition and potential repair costs, you're now in a stronger position to negotiate. You can either use your findings to negotiate a lower price or request that certain repairs be completed prior to purchase.

Consider Walk-Away Points

It's critical to recognise when certain issues might be insurmountable obstacles rather than challenges that can be managed or rectified. Decide upfront what constitutes a deal-breaker for you and be prepared to walk away if such issues are identified.

Electrical wiring and plumbing systems are like the nervous and circulatory systems of a house; they must function correctly to ensure safety and convenience. The age and condition of these systems should be clearly outlined in the inspection report because outdated or poorly maintained systems can be hazardous and expensive to upgrade.

Proper insulation is crucial for comfort and energy efficiency in New Zealand's variable climate. The inspection report should detail the type and condition of insulation present in walls, ceilings and under floors. Insufficient insulation can lead to higher energy bills and reduced comfort levels within the home.

Before diving into the potential issues, it's essential to understand what an inspection report entails. An inspection report is a document prepared by a qualified building inspector who evaluates the condition of a property. It should provide a thorough assessment of the building's structure, materials used and any areas that require repair or may pose future problems.

New Zealand has had its share of leaky buildings - structures that allow water ingress due to poor design or construction. This issue can lead to structural damage and toxic mould. When reviewing an inspection report, look for signs of water damage such as staining, bubbling paint or timber rot. It's also wise to check if there have been any recladding efforts which can indicate past problems with leaks. You can get moisture readings done as a part of the building report process. For plaster houses, also ask/check if they have a cavity system in place.

The ever-evolving geographical landscape of New Zealand, shaped by its seismic activity and diverse terrain, necessitates a careful consideration of ground stability when purchasing property. This aspect is especially important due to its potential to directly influence the long-term safety, durability and value of your property.

What Should Your Inspection Report Address?

The inspection report should offer detailed insights into the land's history and current condition. Specifically, it should address whether the land has any history of:

  • Subsidence: This is when the ground beneath a property starts to sink, potentially causing one side or corner of the property to collapse or dip. The causes for this can vary from natural soil erosion to human activities like mining.
  • Slippage: Also known as landslides, slippage occurs when layers of soil or rock slide down a slope, which can pose a serious threat to any buildings or structures in its path.

Both subsidence and slippage could significantly undermine the stability of your foundation over time, leading to structural problems that may require costly repairs.

Why is Ground Stability Important?

Understanding the ground stability of your prospective property can help you make an informed decision about your investment. Here's why:

  • Safety: Unstable ground could lead to serious structural damage in the event of an earthquake or heavy rainfall.
  • Maintenance Costs: Frequent ground movement could lead to ongoing maintenance issues and repair costs.
  • Resale Value: Properties with known ground stability issues may be harder to sell in the future.

A material once celebrated for its durability and resistance to heat, asbestos was a popular choice in New Zealand's construction industry until the late 1980s. However, it was later discovered that asbestos can pose significant health risks when its microscopic fibres become airborne and are inhaled.

If you're considering purchasing an older property, it is crucial to ensure that your inspection report includes a comprehensive asbestos check. This check is not only about ticking compliance boxes, but also safeguarding your well-being and that of those who will share the space with you.

The Health Implications of Asbestos

When asbestos fibres are inhaled, they can lodge into the lungs and cause serious diseases over time. These include:

  • Asbestosis: a long-term lung condition similar to chronic obstructive pulmonary disease (COPD)
  • Mesothelioma: a rare and aggressive form of cancer that affects the lining of the lungs or abdomen
  • Lung cancer: particularly among people who smoke and have been exposed to asbestos
Dealing with Asbestos: Safety and Financial Considerations

If asbestos is found on the property, it's essential to consider both safety measures and financial implications. Here are key points to ponder:

  • Safe Removal: Asbestos must be removed by trained professionals adhering to specific safety protocols. Never attempt to do this yourself.
  • Disposal: Asbestos waste should be disposed of at approved facilities to prevent environmental contamination.
  • Cost: The expense associated with safe removal and disposal can significantly impact your renovation budget. It's important to factor this into your financial planning.
  • Insurance: Some insurance policies may not cover damages caused by asbestos removal. Check with your provider before proceeding.

In recent years, methamphetamine (meth) contamination has been increasingly recognised as a serious issue affecting properties across New Zealand. The residual effects of meth use or production can seep into the very fabric of homes, permeating walls, floors and surfaces. This poses a significant health hazard that can have long-term implications for those living in the affected property. This Toxicology condition can be added in the Sale and Purchase Agreement if you believe there has potentially been an issue with usage at this property.

Identifying Meth Contamination

Identifying meth contamination isn't always straightforward. However, your property inspection report may provide some clues. It could mention the presence of chemical odours, which are often described as sweet, acidic or solvent-like. Similarly, unexpected stains on walls, floors or ceilings could be a result of chemical spills or residue from meth use or production.

Here are some common signs of potential meth contamination:

  • Chemical odours: A strong smell resembling nail polish remover or cat urine
  • Stains: Unusual yellowish stains on walls, floors or ceilings
  • Chemical waste: Evidence of chemical waste containers and stained glassware
  • Ventilation modifications: Unusually large ventilation systems in small spaces
Potential Health Hazards

The health risks associated with meth contamination are substantial. Exposure to meth residues can lead to a range of symptoms such as headaches, dizziness, nausea, skin irritation and respiratory problems. In more severe cases it can affect the nervous system and even lead to behavioural changes.

Addressing Meth Contamination

If you suspect your potential property might be contaminated with meth, it's crucial to engage professionals to conduct thorough testing. Should the test results confirm the presence of meth contamination, your next step will be decontamination. This is a complex process that should only be undertaken by certified professionals following strict safety protocols.

Flood risks are a potential concern for any property owner or prospective buyer in New Zealand. Given our nation's diverse topography, which includes coastal areas and river basins, along with occasional extreme weather events, both natural and man-made flooding can occur.

What to Look For in an Inspection Report

An inspection report should provide a comprehensive assessment of the risk of flooding. This assessment should be based on the property's location and its history of flooding, if any. More specifically, properties located in low-lying areas or near bodies of water may be more susceptible to flooding.

When reviewing the inspection report, here are a few key points to consider:

  • Property Location: Is the property located near a body of water or in a known flood-prone area? If so, this could increase the potential risk of flooding.
  • Historical Data: Has there been any recorded instances of flooding at this property or in the immediate vicinity? Past events can often be indicative of future risks.
  • Topography & Drainage: Does the property sit on a slope that might facilitate water runoff during heavy rain, or does it have adequate drainage systems in place to manage excess water?
Identifying Signs of Past Flood Damage

While reviewing an inspection report, be vigilant for any mentions of water marks at the base of walls or doors. These signs could signify past flood damage, hinting at potential structural issues and mould growth.

Here are some telltale signs:

  • Water Marks: Look for any visible lines or stains on walls, floors or doors that indicate the level reached by floodwater.
  • Dampness & Mould: Excess moisture from flooding can lead to damp conditions and mould growth.
  • Warped Materials: Flooding can cause wood floors, doors or window frames to warp. Check for any signs of warping or irregular shapes in these areas.

Dampness and mould are common problems in many New Zealand homes due to its maritime climate which favours humidity. These issues not only cause discomfort but can also lead to health problems and degrade building materials over time. An effective inspection will highlight any areas with poor ventilation or visible signs of mould growth.

The structural integrity of a property serves as its backbone, ensuring safety and longevity. This crucial aspect of a building cannot be overlooked during inspections. Any potential structural issues could lead to significant safety concerns and hefty repair costs down the line.

What to Look for in Inspection Reports

When you receive your inspection report, it's critical to look for key indicators of structural problems. These can include:

  • Uneven floors: If a floor appears uneven or feels "bouncy" as you walk on it, this could suggest underlying structural issues. These may be due to shifting foundations, degraded joists or other complications beneath the surface.
  • Cracks in walls or foundations: Minor cracks can be a normal part of a building settling over time but larger, more prominent cracks, especially those in foundations, may indicate serious structural faults that need immediate attention.
  • Rusted steelwork: Steel is often used in construction for its strength and durability. However, if steel components are rusting, they may lose their integrity and become a safety concern.
  • Degraded support beams: Support beams play a pivotal role in maintaining a building's structure. If these beams are degraded or damaged, it could compromise the entire structure's stability.

Always remember to take these potential issues seriously. While some may seem minor at first glance, they could signal deeper problems that might be costly to rectify.

As you journey into the realm of property ownership, it's essential to be mindful that your investment doesn't end at the point of purchase. An often overlooked yet integral part of successful property management is the commitment to regular maintenance. This involves setting aside funds specifically for this purpose, especially if you're considering a property with identifiable but manageable issues.

Why is Regular Maintenance Vital?

Prevention is Better than Cure: Regular upkeep can nip minor issues in the bud before they become major, costly problems. For example, a small leak might seem insignificant initially but left unchecked, it could lead to substantial water damage.

Preserve Your Property’s Value: Maintaining your property not only ensures its functionality but also contributes to its aesthetic appeal and overall value. A well-maintained property is more attractive to potential renters or buyers and can command a higher price in the market.

Safety and Compliance: Regular maintenance can help ensure your property adheres to safety standards and regulations, protecting you from potential legal liabilities.

Setting Aside Funds for Maintenance

While budgeting for your property purchase, it's wise to include an allocation for ongoing maintenance costs. This will serve as a financial cushion when unexpected repairs or upgrades are needed.

Forecast Maintenance Costs: It would be useful to have an estimate of yearly maintenance costs which typically range from 1% - 3% of the property’s initial price.

Factor in Age and Condition: If you’re leaning towards an older property or one with known issues, consider setting aside a larger portion for maintenance.

Plan for Major Repairs: Roof replacements, plumbing overhauls or significant landscaping work are examples of big-ticket items that you may need to plan for in the long run.

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