07 Aug Check Before You Sign
Buying a home wisely involves much more than checking out if you like the kitchen and deciding if you’re paying a fair price.
Homes can come with hidden dangers. They could be leaky or have been used as a P lab.
There could be asbestos in the walls, rotten piles or suspect earthquake repairs.
What’s more, there could be natural hazards such as being sited on a flood plain, or having contaminated soil.
No house is perfect, and the good news is there are tests for all of these issues, which are almost always fixable — at a price.
For example, you may have to pay $20,000 or more for the removal of asbestos and more for recladding. But if you’re buying the property for $50,000 to $75,000 less than the identical property next door, it might still be worth buying and bringing it up to standard.
These hidden problems can even be a good bargaining wedge during the negotiation process.
The first step to identifying hidden dangers is to get a property inspection report, says Darin Davenny who runs Property Check and is president of the New Zealand Institute of Building Surveyors.
This will cover many of the standard hidden dangers and identify if a home buyer should seek further specialist tests.
In older homes, says Darin, one of the biggest hidden dangers is borer. The old adage goes, he says, that borer isn’t a problem if they don’t stop holding hands.
The reality is that the entire sub floor structures of some homes are at risk of collapsing due to borer damage, he says.
Fixing the problem requires the removal of floor coverings and uplifting of the floor for the rebuild. This can be expensive.
Rotten piles, floors that aren’t level and subsidence aren’t all obvious to the human eye but should all be identified in a pre-purchase inspection report.
“We consider ground conditions and check for settlement of the house itself,” says Darin.
Re-piling and levelling a 150sq m villa could set a home buyer back $30,000.
Another related hidden danger is sub-floor dampness, especially in pre-1970 houses, says Darin.
Once identified, it may not be that expensive to solve, costing around $1500 for polythene to be laid under the house.
More of a worry is the hidden cost of repairing a leaky home.
Building surveyors can highlight the risks during their pre-purchase inspection, says Darin.
If the house is at risk, then an additional specialist test is required. That involves drilling into the exterior cladding and putting probes into the framing to measure the moisture content and check for decay.
A test such as this will cost around $2500 says Darin.
It’s not at all unusual to find asbestos in pre-1985 homes, says Darin.
Again, the risk should be identified in a pre-purchase inspection report. If so, samples can be sent away for specialist laboratory testing, which could cost around $500.
It might cost around $20,000 to remove asbestos cladding. But the thing to be aware of, says Darin, is that if there is asbestos on the exterior, the interior may also have it on the walls and ceiling or elsewhere.
Another hidden danger in many parts of the country is poorly executed earthquake repairs.
It’s not unusual for homeowners to find out after purchase that the foundations have been filled, the filling painted over, and they subsequently fracture or separate, says Darin.
There are other dangers that a lawyer can identify on the Land Information Memorandum (LIM) and council file on the property.
This can identify issues such as flooding and other natural hazards as well as hidden problems such as unconsented works.
A new practice is vendor disclosure where the vendor has reports done.
From a vendor’s point of view, this might help sell the house.
Lawyer Nick Kearney, of Schnauer and Co, says: “People (who) are willing to spend $850,000-plus on a property should be prepared to spend a little bit of money doing a lot of their own due diligence. “It’s simple ‘caveat emptor’.
Also, allowing purchasers to rely on vendors’ experts, and vendors’ LIM reports opens up a legal minefield.”
Finally, buyers find it expensive to run so many tests on properties they might or might not win at auction. When the market is hot and competition is high, buyers may not want to spend the money.
If the property is of a style that might have such problems, it can be a good idea to negotiate after the auction and enter into a conditional contract in order to do the necessary testing.
This article was written by Diana Clement https://www.oneroof.co.nz