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Building Inspection Report Guide for NZ Buyers and Sellers

The Role of a Building Inspection Report

This article provides a Building Inspection Report Guide for both NZ Buyers and Sellers, which is an important tool in the buying and selling process. 

Building Inspections are a comprehensive assessment of the structural integrity and overall condition of a property.  We delve into the intricacies of what these reports encompass and the nuances of their coverage, therefore a critical tool for both buyers and sellers.

The Role of a Building Inspection Reports.

What is Generally Covered in Building Inspection Reports

Structural Assessment

  • Visual Inspection of the foundation, walls, roof, and floors.
  • Identification of any visible damage, wear and tear, or potential structural issues that may impact the property’s stability over time.

Plumbing and Electrical Systems

  • Visual examination of plumbing and electrical components.
  • Potential detection of faults, leaks, or safety concerns.

Moisture or Dampness

  • Identification of any dampness issues.
  • Identification of potential mould growth areas.
  • Assessment for prevention of future structural damage.

Pest Inspections

  • An optional assessment for the presents of rats, ants or other pests.
  • Recognition of potential threats to the property’s integrity.

Building Code Compliance

  • Checking whether the building rules and NZ Building codes are being followed.
  • Identification of non-compliance issues that require attention.
What is Generally Covered in Building Inspection Reports

Limitations – What’s Not Covered in Building Inspection Reports

Hidden Defects

  • Some defects may not be obvious or visible at the time of inspection. An example would be inspecting an area that is not accessible, without invasive inspection.
  • Understanding or recognition that certain issues may manifest post-inspection.

Cosmetic Issues

  • Cosmetics, such as decor, are not part of the inspection or report, since the focus is on structural and functional aspects.

Specialist Inspections

  • The report is not replacing specialised inspections.
  • Specialised inspections include issues like asbestos or lead, which require their own assessment.
  • Geological concerns may necessitate additional inspections.

Future Predictions

  • Reports provide a snapshot of a property’s condition at a specific point in time.
  • Predictions about future issues are beyond the reports scope.
  • Understanding that changes to the property post-inspection, are not covered. An example would be heavy civil works post inspection may have impact on the property.

Common Misconceptions About Building Inspection Reports

  • All Inclusive Assessment – building inspection reports are not exhaustive and all inclusive. Some issues may go undetected during a standard inspection.
  • Property Value Guarantee – a favourable report does not guarantee the property’s future value.
  • Inspectors Liability – inspectors have limitations in predicting future issues. Their future liability is restricted to the scope of the inspection, which generally is specified in the report.
Common Misconceptions About Building Inspection Reports

The Importance of Qualified Inspectors

  • Qualifications and Experience – Engaging qualified and experienced inspectors is paramount. Building Inspectors bring a wealth of knowledge and expertise to the inspection process. They ensure a thorough examination that instills confidence in the property report.
  • Referrals and Reviews – put in the effort to seek referrals and read reviews about inspectors prior to engagement. Peer and client feedback offer valuable insights.
  • Communication Skills – inspector’s communication skills are important. Clear explanations facilitate better understanding of the report.

Building Inspection Report Costs – Financial Preparedness for Buyers

  • Inspection costs – factors influencing inspection costs should be explained and understood.
  • Compare Inspection Quotes – obtain and compare quotes from multiple inspectors. Place emphasis on balance cost considerations with inspector’s qualifications and experience.
  • Incorporate Inspection Costs into the Budget – Buyers and sellers should include inspection costs in the overall budget, ensuring financial preparedness for the property transaction.
  • Consult your mortgage broker and they will help you become financially prepared for your home loan application.

The Inspection Process – What to Expect

  • Pre-Inspection – a clear understanding of the pre-inspection and its important. Develop a clear understanding of the scope and limitations of the inspection.
  • On-Site Inspection – clarify the inspectors assessment criteria to both visible and accessible areas.
  • Report Delivery – understand and agree on a timeline for report delivery. Prompt delivery of findings allows for timely decision-making.
The Inspection Process - What to Expect

A Buyer’s Perspective – Using Reports Strategically

Negotiation Tool

  • The building inspection report can be a powerful negotiation tool for buyers.
  • Identified issues may be used to re-negotiate the purchase price.

Informed Decision Making

  • Promotes and enables informed decision making.
  • Emphasis on the importance of understanding the property’s condition before committing to purchasing.

Future Planning

  • The report aids in future planning for potential repairs or renovations.
  • Provision of a roadmap for addressing identified issues.

Seller’s Perspective – Preparation for the Inspection

  • Pre-Listing Inspection – obtaining a report prior to listing offers the selling a proactive opportunity to address potential issues before listing.
  • Enhancing Marketability – a “clean” inspection report enhances a property’s marketability, and instills confidence in prospective buyers.
  • Transparency – transparency during the selling process is important, since providing a building inspection report upfront establishes trust.

Buyers Next Steps to Address Building Inspection Report Findings

  • Prioritising Issues Reported – Prioritise identified issues based on severity. Not all issues reported may need immediate attention.
  • Seeking Professional Advice – Buyers are encouraged to consult with professionals for further guidance where warranted. Experts in their particular fields can provide insights into potential solutions.
  • Re-negotiation Strategies – Develop effective re-negotiation strategies based on report findings.
  • Balance – Maintain “fair balance” between buyer expectations and seller concessions.

Building Inspection Report Findings – Next Steps for Sellers

  • Addressing findings proactively – recognise the benefits of proactively addressing identified issues which could streamline the selling process.
  • Transparency and Disclosure – it is a legal requirements to disclose issues raised with estate agents, and if private sale, with potential buyers. Honesty builds trust with potential buyers.
  • Professional Repairs – enlist professionals for repairs and improvements which are beyond the sellers DIY skills. Professionally addressed issues contribute to the property’s appeal.
Building Inspection Report Findings - Next Steps for Sellers

In the dynamic realm of New Zealand’s real estate, navigating the complexities of property transactions requires a comprehensive understanding of building inspection reports. These reports, serving as a cornerstone for both buyers and sellers, unveil the intricacies of a property’s condition. From structural assessments to strategic improvements, the insights gained from these reports empower stakeholders to make informed decisions, fostering transparent and successful real estate transactions.

Contact our mortgage brokers who have the qualifications, skills and experience to ensure that appropriate and relevant budgeting items, such as a building inspection report, are incorporated when applying for a mortgage.