A building inspection report helps you understand the visible condition of a property before you buy it. Also called a builder’s report, property inspection report or pre-purchase house inspection, it may identify defects, maintenance concerns and areas requiring further investigation.
For first-home buyers, this information can help you make a more informed decision before becoming unconditionally committed to a property. It may also identify repair costs or property concerns that should be discussed with your lawyer, inspector, insurer or mortgage adviser.
A standard building inspection is generally visual and non-invasive. It does not guarantee that a property is free from problems, and it does not replace a LIM, council records, legal advice or specialist reports.
This guide explains:
A pre-purchase building inspection report records an inspector’s observations about the condition of a property at the time of the inspection.
The inspector examines the visible and accessible parts of the building and records defects, signs of deterioration, maintenance concerns and anything that may require specialist investigation. The exact scope will depend on the service ordered, the property and which areas the inspector can safely access.
The report is intended to help you understand the property’s physical condition. It is not a valuation and does not tell you whether the purchase price is appropriate.
A building inspection report may cover visible and accessible parts of the:
The inspector may use photographs and moisture readings to support the findings. Ask what equipment will be used and whether areas such as the roof cavity, subfloor or roof exterior are included.
An inspector may notice signs of a plumbing, electrical, structural or weathertightness problem. However, further assessment by an appropriately qualified specialist may be required before the nature or cost of the problem can be established.
A standard builder’s report is generally visual and non-invasive. It may not identify problems that are:
The report describes the property at a particular point in time. It cannot guarantee that new problems will not develop or predict exactly how long every part of the building will last.
Other possible disadvantages of a builder’s report include its cost, the time needed to arrange it and the possibility that it identifies a need for additional specialist reports. You may also pay for an inspection and then decide not to purchase the property.
These limitations are not reasons to disregard the inspection. They are reasons to understand exactly what was checked, what was excluded and which findings require further investigation.
No. A building inspection report and a Land Information Memorandum serve different purposes.
A building inspection report examines the visible physical condition of the property. A LIM contains information held by the local council, which may include records concerning consents, rates, drainage, natural hazards and other matters affecting the land or buildings.
A building inspector may notice alterations or construction that should be checked against council records, but the inspection does not confirm that all work has the necessary building consent or Code Compliance Certificate.
You may need both forms of information. Ask your lawyer or conveyancer which property records and conditions should be reviewed before you sign an agreement or allow an offer to become unconditional.
It is generally best not to rely on a seller’s report alone. It can contain useful information, but the inspector’s client is the seller, not you, so you may have limited recourse if an important issue was missed. If you read the report, check:
Discuss a seller-provided report with your lawyer and consider commissioning your own independent inspection. Consumer Protection explains the risks of relying on a report commissioned by the seller.
Ask whether the inspector undertakes residential property inspections in accordance with NZS 4306:2005, the New Zealand standard for residential property inspections.
Before making an appointment, consider asking about:
A builder may have valuable practical experience, but that does not necessarily mean they provide inspections that follow the relevant standard or carry appropriate professional indemnity insurance.
The Real Estate Authority’s Settled guidance recommends using an accredited property inspector and explains what buyers should consider before arranging an inspection.
A building inspection report generally costs several hundred dollars, but the price varies between providers and properties.
The cost may be affected by:
Ask for a written quote explaining what is included. Two reports with different scopes, inspection methods or insurance arrangements may not be directly comparable, so price should not be the only consideration.
Include inspection and due-diligence expenses in your home-buying budget. You may need to investigate more than one property before finding the home you ultimately purchase.
Arrange a building inspection before your offer becomes unconditional, or before you bid if the property is being sold at auction. The appropriate timing depends on how the property is being sold and the terms of your proposed offer.
Property auctions are normally unconditional, so complete your finance, legal and property investigations before bidding.
Ask your lawyer what must be checked before the auction. If your lender, insurer or valuation identifies a property concern, allow enough time to obtain any additional information required.
You may be able to make an offer conditional on receiving a satisfactory building inspection report. Your lawyer should check the wording of the condition, who must prepare the report and the deadline for completing the inspection.
A general finance condition may not protect you from every building-related concern.
Before committing without conditions, read our guide to going unconditional on a property.
A reported problem does not necessarily tell you how serious it is, what caused it or how much it will cost to repair.
Start by asking the inspector:
Depending on the finding, you may need advice from a builder, engineer, electrician, plumber, weathertightness specialist or another qualified professional. Obtaining repair estimates may help you understand the likely financial effect.
Send the report to your lawyer if your offer contains a building-report condition or you need advice about your rights and obligations. Tell your mortgage adviser promptly if the issue could affect the property’s value, insurance or acceptability to the lender. Provide the report and any supporting information already available, such as specialist findings, repair estimates or relevant council records. Your adviser can then check what the lender requires before finance is confirmed.
Your options depend on the report, the sale-and-purchase agreement and the professional advice you receive. A building report does not automatically give you the right to cancel the purchase or require the seller to complete repairs.
Not every home loan application requires a building inspection report. However, a lender may ask for more information if a valuation, insurance assessment or other information raises concerns about the property.
Significant defects, unconsented work, weathertightness concerns or difficulty obtaining suitable insurance may affect whether the property is acceptable security for a loan.
The lender’s acceptance of the property does not guarantee that it is free from defects. Likewise, a favourable building report does not guarantee finance approval. The lender must still assess the borrowers, proposed loan and property under its applicable requirements.
For a broader explanation, read our guide to mortgage lending criteria in New Zealand.
No. Requirements vary according to the lender, property and application. A lender may request further information if the valuation, condition, construction, insurance or consent position raises concerns.
A lender not requesting a report does not mean you should skip your own property investigations.
There is no standard inspection or reporting time. Timing depends on the property’s size and complexity, accessibility and the inspector’s service. Confirm when the inspection will occur and when the written report will be delivered before agreeing to a contractual deadline.
There is no standard expiry date. A report records the property’s condition at the time of inspection. Its usefulness depends on its age, any changes to the property and the requirements of the buyer, lawyer, insurer or lender.
Not conclusively. An inspector may notice signs of alterations or additions that need checking, but a building report cannot confirm whether the work was consented. Check the council property file and LIM, and ask your lawyer to review the relevant records.
A new home can still have workmanship, finishing or maintenance issues. Ask a qualified inspector and your lawyer what inspections are appropriate for the property and purchase arrangement.
For a broader purchase comparison, read our article New Build or Existing House.
If you are preparing to buy your first home, we can help you clarify your finance position and identify lender requirements before you make an offer.
Contact Platinum Mortgages to discuss your home-loan plans.
Platinum Mortgages New Zealand Limited (FSP752271) is a Financial Advice Provider licensed and regulated by the Financial Markets Authority. Angela Downie (FSP742251) is a Financial Adviser at Platinum Mortgages who provides mortgage advice to New Zealand borrowers under that licence and has worked in the financial industry since 2006.
Angela helps first-home buyers understand when property information may affect a lender’s assessment and coordinates mortgage requirements while qualified inspectors, lawyers and other professionals provide specialist advice.
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