House Buying Downunder
 

 

Deciding if your final choice is a safe investment
 

Once you have found "the" house that seems to fit most of your requirements, you will want to check it out carefully. Go back several times and ask the Real Estate Agent (or the owner if it is a private sale) lots of questions. You'll also want to inspect the house thoroughly for things you may have to fix.

Ultimately, you will want to get a detailed building consultant's report, but you will not to commission it unless you're sure this the house for you. Some initial checking by yourself will save you money later.

 

Government Valuation / Registered Value
 

When viewing a house or property, the owner or Real Estate Agent should provide information on current Land Value and Capital Value of the property. This information is provided on Rates Invoices from the local Council. The Rates Invoice will also provide the date of the most recent valuation.

Ask to see the most recent Rates Invoice. Don't always believe what you are told verbally by owners or Agents.

Council re-valuations are done every 2-5 years. It is possible that the valuation on the Rates Invoice will be out-of-date. To get an up-to-date valuation, contact Quotable Valuation at https://www.qv.co.nz/. They offer a range of reports that are ideal if you want to get an instant estimate of what a property is worth. Some reports include other useful information including the rating valuation, floor area, owner’s name (where available), and property age.

Quotable Valuation calculates a property's current market value based on what nearby comparable properties have sold for recently. E-Valuer reports are only available for residential properties (not including vacant sections). An E-Valuer report may not be available for some properties as it requires at least three comparable sales in the surrounding area to enable an accurate estimate of the market value.

Please note, for leasehold properties, the E-Valuer estimate is not based on the property being sold as leasehold. Both the estimate of the value and the capital value are calculated on the basis that it is a freehold property.
  
DIY property inspection
  

When you view a house for sale, try to evaluate it's general construction and condition. Look beyond the superficial - if the paint job is old and tired, its not a big deal to repaint. But if the underlying timber shows signs of rot, there are other major issues to be resolved.

Apply common sense but watch out for:

  • Beware of Dux Quest Plumbing which is faulty plastic piping product with expensive leaking problems.
  • Houses down-slope from the road - drainage water problems?
  • Houses without eaves, particularly if they have spray-texture cladding - leaky building syndrome?
  • Houses with a flat roof - is there sufficient fall to allow proper water drainage or does the rain back up and flow into the house when it is windy?
  • Houses that have been recently re-painted - is there paint splatter on the gutters indicating a quick spray job to cover up a problem? Why have they repainted?
  • Houses with wooden windows and doors - is there evidence of rot around the window sill? Look at both inside and outside surfaces.
  • Houses with aluminium windows and doors - is there evidence of rot around the window sill? Are the sealing rubbers perished?
  • Houses with different wall colours or roof materials - has there been a repair?
  • Houses with water-stained ceilings or walls - weather-tightness?
  • Houses with balconies - do they leak into the house?
  • Houses with mould or bad smells - weather-tightness?
  • Houses with leaking showers, especially those with ceramic tiles. Is there a gap between shower lining and the drip tray?
  • Can you see that silicone sealers have been used in wet area - is there a water problem?
  • Can you see rusty nailheads showing through the paintwork?
  • Can you see rust marks on the underside of the roof guttering?

These are a few practical tips that can assist you in spotting obvious problems or areas of concern before you go to the expense of getting a building inspection.

  
Professional property inspection
 
Before buying it is always recommended you get a professional builder or building inspector to look at the house and property. Consult your local Telecom Yellow pages for a listing of Building Inspection companies in your area. Ring around and discuss price and the standard of reporting.
 
LIM Report
 

A LIM report (Land Information Memorandum) can be obtained from your local council. It contains all of the information that the Council holds in relation to a property that you may wish to purchase.

This information includes:

  • potential for erosion, subsidence, slippage, flooding or the likely presence of hazardous contaminants
  • the location of private and public stormwater drains on the property, if any
  • rates owing on the land
  • any consent, certificate, notice, order or requisition affecting the land or any building on the land
  • any certificate issued by a building certifier for buildings on the land
  • the use to which the land may be put and conditions attached to that use.
  • any designation by the New Zealand Historic Places Trust
  • information about consents by local electricity supply authorities, or gas or petroleum corporations
    •

One of the main advantages of the LIM report is that it shows a purchaser all the building consents and certificates issued for that property by the local Council. If you, the prospective purchaser, discover that no permit or consent has been issued for works on the property or that no code compliance certificate has been issued, you can ask the vendor to have the local Council acknowledge the work and verify that it is safe and sanitary

You can also ask the vendor to complete any work required to obtain the required acknowledgment or code compliance certificate.

Depending on which council issues the LIM report, the report can also include any other information concerning the land that the Council considers relevant.

You can obtain a LIM report from your local Council. They have up to 10 working days to provide this for you. There will be a fee for compiling the report. Fees vary between Councils but you should expect to pay hundreds, not tens, of dollars.

Most agreements for sale and purchase of real estate will usually be conditional on the purchaser’s approval of the LIM report. The standard agreement allows 15 working days to obtain and approve a LIM. This allows time to deal with any possible issues that may arise.
 
Visit your local Council
 

Some local councils allow property information to be viewed by the general public for free and for others a small fee. Ask at the Council Reception for the appropriate Department.

The sort of information that you can view varies between Councils but some or all of the information that is contained in the LIM report can be obtained, for free.
 
Chat to your new neighbour(s)
 

Having a chat to the neighbours can be a great way of finding out more about your house. It's amazing what you may discover after a casual meeting.

Some personal experiences of "Neighbour Chats":
After visiting an apartment that was for sale I chatted to the next door neighbours who informed me that the whole complex leaked. They invited me in to look at their place. I was shown several rooms in their house that had no ceiling linings. They had removed them in an attempt to dry out the sodden structural timbers.

At another property, I arrived early for an Open Home to be greeted by the next door neighbours Rottweiler dog which proceeded to lunge and bark at me from behind a very low fence.
 
Can the property be easily improved to increase its Capital Value?
 

When evaluating a property, try to assess if minor improvements will boost the value of the property. Money spent on the kitchen and bathrooms will likely give the greatest return.
 
The Big 6 - how does your property stack-up?
 

Ideally you want to try and get as many of these six points as possible within the constraints of your budget.

Sun:
 A home that doesn't get sun can be a depressing place to live. Try to assess how much sun the property receives. Consider the amount of sun at different times of day and what to expect in summer versus winter. Ideally you want the garage and services (bathroom, toilet, laundry) on the south side (cold side), the kitchen on the east (for early morning sun and cool afternoon), the lounge on the north (all day sun) and bedrooms on the west (afternoon sun).

Go back and visit the house you are interested in purchasing at different times of the day. Does the Agent only run open homes between 10.00-11.00 am because the rest of day the house is in shade? Try to gauge how much sun the house will receive in wintertime.

Flat Land:
Houses with views are most often built on sloping land. Sloping land means car and pedestrian access is more difficult. Daily chores like carting groceries up stairs are more difficult. House maintenance is more difficult - is the view worth the extra work? Also consider land stability, water drainage and wind issues for sloping sites

A house built on flat land usually has easy car access, easy pedestrian access, ample lawns for the kids to play on, and room for a vegetable garden. Even simple tasks such as mowing the lawn are easier on flat land. Is the site prone to flooding?

Privacy:
Consider the level of privacy you will have from your neighbours. Do they look into your bedrooms? Do you look into their bedrooms? Are there noise issues? Is property security and fencing an issue (small children, pets)? Are there barking dogs or loud street noises?

Views:
Views can be broken down into water views, city views, rural views, mountain views, bush views and garden views. Take into consideration your day and night views. A property with extensive sea views by day may offer no view at night. But if the property has sea and city views, it will also offer night views, especially from city lights.

Shelter:
Ideally, you want a property that is protected from wind from all compass directions. Be aware that if you buy a property in autumn (a period of little wind) you may miss that the property has a wind problem during the spring equinox. Look at the surrounding trees - if they all lean one way, you have a potential wind problem.

However in a city such as Wellington, wind is inevitable because of its proximity to Cook Strait. Exposed properties that offer scenic views are also going to get the wind from at least on direction. Try and see the house on a day with bad weather.

Parking:
Security for your vehicle(s) is an important issue. At least, look for secure off-street parking and best, look for a locked double garage with internal access to your house and sufficient space on your property to park visitor's cars without blocking access. In a worst case scenario, you may be faced with off-street parking and having to walk up and down steps to your house.
 
Other factors to consider
 

Number of owners in the last 10 years:
When your lawyer checks the house title, look to see how many owners the house has had in the last 10 years. If the property has a history of new owners every couple of years, it may point to a problem with that house. If you see this pattern of ownership, try to get to the bottom of why the house is so often on the market.

Internet access and broad-band connectivity:
 Give Telecom a call and see if they can deliver ADSL to that address. Also in Wellington and Christchurch give TelstraSaturn a call to see if they can deliver a high-speed cable modem service.

School zoning:
 If you have children, consider what school they are to attend. Are there zoning issues?

Buying by the beach:
Real estate located on the beachfront with sea views nearly always commands premium prices. Such properties may be very desirable purchases with the promise of future capital gains. However when buying a beach front property you must also accept issues such as:

  • Salt air rusting metal components outside and inside your house, including computers.
  • You may have to get de-humidifiers for each room to reduce interior problems
  • Salt spray constantly making your windows dirty.
  • Wind-blown sand all through your house.
  • If you are light sleeper be prepared for lots of noise when there are rough seas.
  • If sea levels rise (Global Warming) your property may be under water in 10-20 years.
 
 

www.house-buying-downunder.com