The first thing you need to do when your building inspection identifies a problem is to work out how serious the problem is – a good person to question initially is the person who did your building inspection – you need to make sure that you fully understand the problem that they have identified.

Building Inspection Problem? Get a Specialist Building Advice

A building inspector is not an expert in all aspects of building so if a particular problem has been identified and the building inspector has indicated that they cannot tell you the extent of the problem or the cost to fix - it is best to speak to, or get quotes from, an expert in the area.




Say the piles are a problem – speak to a replier – they will be able to assess the extent of the problem and give you a quote for the remedial work.

Now you are in a position to start making decisions depending on your situation...

I Have a Signed Sale and Purchase Agreement

You may have gotten the building inspection as part of working through the conditions on a sale and purchase agreement. If you are not happy with the building inspection:

• You are now legally entitled to cancel the agreement. To do this you tell your lawyer, and usually the real estate agent that you are not going unconditional based on an unsatisfactory building inspection. This can be a very hard decision to make as by this stage you have invested time, money, and emotion in the house, but in many cases it is the best decision.

• You can re-negotiation the price of the house with the vendor. Go into negotiations with quotes for remedial work in hand – and bargain hard! Don't forget, it always pays to budget for some extras!

• You can ask the vendor to fix what is wrong before you buy the house. Especially if the problem is fairly easy to fix i.e. a few hours work by a plumber or electrician this is often a good solution. If the problem is major – the vendor will rarely agree to fix it.

• You may still be happy to proceed with purchasing the house at the agreed price - and you still can. Perhaps none of what was identified in the building inspection is a surprise, or you now know why the house was a reasonable price from the beginning! Before proceeding double check your numbers, make sure you are happy with the amount you are going to have to pay in repairs and renovation, and add a contingency of at least 10%.

If you and the vendor come to an agreement that involves the vendor having to complete work, or the price changes, or anything else at all, this needs to be formalised in the sale and purchase agreement by your lawyer.

Even if the work agreed is small (i.e. rubbish removal or repairing flashing) and seems insignificant to include – the reality is that it will not be done unless the vendor commits to it via the sale and purchase agreement.

I Haven’t Started Price Negotiations

If you have obtained this building inspection before even beginning negotiations on a house that you are interested in you have similar options:

• You can walk away – the house is not suitable anymore – move on!

• You can start price negotiations fully armed with exactly what is going on with the house. This is a much stronger bargaining position then if a price had already been agreed and a reduction was being negotiated. It is hard for people to comprehend that seemly overnight their house price has decreased significantly.

• You can start negotiations from the beginning with a condition that lists things for the vendor to fix before you will settle on the house – again, if the problems are extensive - this can be a very short negotiation!

Sometimes the extent of the remedial work needed to fix a problem identified by a building inspection can not be worked out exactly by a ‘surface only’ examination by a building inspector or tradesman i.e. extent of rot given evidence of rotten weatherboards.

In these situations you will only be able to get an estimate of the cost of fixing – as a lot will depend on the extent of the problem and this will only be known when the remedial work starts.

It is up to you here to make a decision based on how much of a risk you want to take! In these cases, if you are not comfortable with what can potentially be an unknown, and large, expense it is best to walk away.

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The Propertytoolbox Home Buyers Guide

The information you have just read about building inspection problems has been added to the Propertytoolbox house buying guide - An essential resource for house buyers in New Zealand. Find out more about house buying in New Zealand here.

Before you buy a home you need to know the full cost - and we are not just talking about mortgage repayments here! Yes, the mortgage is the most obvious and high profile cost of home ownership and usually is by far the largest one. But don't forget about rates, insurances, water, repairs and maintenance!  So just how much is this all going to cost?

The mortgage is usually the first figure calculated - and often dictates what the house buying budget is for many people. The biggest thing to consider here is the potential effect of an interest rate change. Currently interest rates are low, this almost certainly means that in the future your mortgage repayments are going to be higher. A good way to see the effect a change in interest rate has on your mortgage repayment is to have a play with a mortgage calculator - put in a variety of interest rates and see the effects. Here are some statistics for average bank 2 year fixed home loan interest rates that give you some numbers to play with:

Current 2 year fixed home loan rate = 7.1%

Average home loan interest rate for last 5 years = 8.0%

Home loan interest rate mid 1998 = 10%

Home loan interest rate April 2008 = 9.6% 

Home loan interest rate May 2003 = 6.7% 

With costs such as rates, insurance, and water you will be able to find out the exact amount these will be for the first year at least. These will go up year on year, sometimes by an amount far exceeding inflation, so factor this in. If you budget for an increase of 10% every year for these bills you are unlikely to be caught short.

As a bare minimum you should allow $1,500 or better yet 0.3 - 0.5% of the value of your house per year for maintenance. This does vary widely depending on the age, size and condition of your house and the building materials used. You may not use all of this maintenance money one year, and then have major expenses the next! But it will average out over time. Maintenance cannot be avoided, so budget for it!

Something you may not have thought about is all those extra bits and pieces that you are going to need to buy for your new home - new furniture, new appliances, what about plants for the garden? And are you planning any renovations?

How much you want to spend on renovation and new things for your house and grounds is up to you, but there is no doubting you will want to spend money, so establish a budget.

So when you work out how much you can afford to pay for a house, remember to add on all those extra expenses! A good rule is to add another 20-30% to your mortgage repayments to cover rates, insurance, water, small improvements, new stuff, and repairs and maintenance.

Ultimately you will have to come up with the money for all these extra things from somewhere - so take this into account when you are working out how much you can afford in repayments.

This information is part of the Propertytoolbox mortgage & money guide - This guide contains heaps of good info about the money part of home buying. Read more here.

The real estate Complaints Assessment Committee (CAC), part of the Real Estate Agents Authority (REAA) has made its first decision. A North Shore real estate agent was found guilty unsatisfactory conduct.

The daughter of a recently widowed woman complained after her mother received a condolence card from a real estate agent soon after her husband’s death that included a business card and a valuation of the mother’s house.

As a result of this solicitation, the real estate agent was found by the CAC to be in breach of the authority’s Code of Professional Conduct and Client Care for the manner she approached the complainants mother.

This is first of many assessments and decisions to be made by the CAC – there are another 200 complaints currently in the pipeline!

If you are buying or selling a home you should be aware that real estate agents are required to comply with the Real Estate Agents Act 2008. This Act introduces changes into the real estate industry that will benefit the buyers and sellers of houses.

One more obvious change brought about by this new Act is that buyers and sellers (before signing a sale and purchase agreement) must get a copy of the New Zealand Residential Property Sale & Purchase Agreements Guide from their real estate agent! This guide has all the essential info that you must know before signing a sale and purchase agreement.

This act also saw the creation of the REAA. The REAA launched in November 2009 with a focus of high standards of service and professionalism within the real estate industry, and to provide increased protection for buyers and sellers of houses. The REAA provides independent oversight of the NZ real estate industry and in conjunction with the Act hopes to promote public confidence in the industry.

The REAA replaces the Real Estate Institute of NZ (REINZ) and now handles licensing of people and companies working in real estate, investigation of complaints from consumers (the CAC), disciplinary action (the Real Estate Agents Disciplinary Tribunal), setting industry standards, and providing information to buyers and sellers of houses.

Want to know what to expect from a real estate agent – check out the Code of Professional Conduct and Client Care . This code was published as a result of the Real Estate Agents Act 2008 - those working in the real estate industry must follow this code and it is a reference point for discipline.

You can even check a real estate agents license details here, including checking whether they are licensed, finding out how to contact them, check the history of their licence and check their recent individual disciplinary record.

There is a cost to getting all of these reports prior to making an offer on a house - so why should you get them done?

Advantages of Getting Your Due Diligence Done Prior to Offering

The main advantage of having your valuation, building inspection and LIM done prior to offering is you have a full understanding of the house and its worth to you.

Another major advantage is that getting a valuation, building inspection and LIM usually means you can get unconditional finance approval for that house and can then choose to make a cash (unconditional) offer – this sort of offer is very appealing to vendors.




When a cash, unconditional offer is agreed and signed it is binding, the house is sold! A cash offer can give you bargaining power and you can often buy a house for a lower price with a condition free cash offer.

The Disadvantages...

The main disadvantage is the cost. Altogether, these reports will cost well over $1000 – just how much depends on the house itself. This money is potentially being spent on a house you may never buy.

In normal house negotiation situations (not a tender, or auction) putting your building inspection, valuation and/or LIM as a condition in your offer is standard. If a price is agreed on – then you get the reports (do your due diligence).

Houses for Sale By Auction or Tender - Due Diligence

In the case of an auction, if you want them, you need get your valuation, building inspection, LIM and unconditional finance prior to the auction as when you are bidding you are making an unconditional offer for the house; if you are the winner bidder – you have bought the house.

In a tender situation – adding a building inspection, valuation and/or LIM to your tender puts you well below a cash offer in the rankings. Your offer will need to be significantly higher then other tenders to be seriously considered in this situation.

So if you are serious about your tender – try to make as close to a cash offer as possible – this usually means doing your valuation, building inspection and/or LIM prior to the tender date and getting an unconditional finance offer so you don’t have conditions in your tender.

Due Dilligence You Can Do For Free

No matter what you decide to do, we recommend you read our before you put in that offer section, here we have 4 things you can do at minimal cost (free even) that will let you get to know the house you are thinking of buying. You may find that what you discover changes your mind, saving you the cost of hiring the professionals altogether.

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The Propertytoolbox Home Buyers Guide

Want more info and advice? Head to the Propertytoolbox Home Buyers Guide for all you need to know about buying a house in NZ. We have comprehensive information about property valuation and building inspection that can help with those pre-offer decisions.

Mortgage brokers are everywhere and are becoming a common factor in the house buying and selling process. Should you use one? Firstly - you do not need to use a mortgage broker! The process of applying for and getting a home loan can be done by you and is a fairly straightforward process.

So what can a mortgage broker do for me? A good mortgage broker will use their experience to review your financial situation and get the best home loan deal for you. They will start by collecting details of your financial situation and copies of documents needed for applications.

Once they have all this information the mortgage broker will be able to determine who is likely to give you a home loan. They will usually narrow this down, performing a home loan comparison that takes into account all the information they know about you and then present you with a couple of good home loan options. You can then do your own home loan comparison using the mortgage brokers suggestions and make a decision.

The mortgage broker will also look at home loan interest rates. The current interest rates on offer at banks will be a big factor, but not the only factor, in the mortgage broker’s analysis of the best home loan offer for you. Often a mortgage broker can negotiate a better home loan interest rate then that advertised by a bank. The mortgage broker will work with you to determine a home loan structure i.e. how much to fix (at what home loan interest rate), and how much to float.

This is great! Especially if this is your first home loan or you are unfamiliar with borrowing, interest rates, mortgages or home loans. The process of getting a home loan can seem complicated, and a bit scary! And a good mortgage broker can definitely help you smooth out the bumps and explain the confusing bits.

A mortgage broker can potentially save you tens of thousands of dollars during the life of your loan by negotiating on home loan interest rates, structuring your loans, negotiating bank charges, and recommending products to best fit the way you manage your money.

Not every bank will necessarily say yes to your finance application, but it is the job of the mortgage broker to know which ones will and what information is required for the loan application. So if you are not a ‘perfect’ borrower, a mortgage broker will know who the best lenders are to approach to get the mortgage you are after.

Particularly if you are having trouble getting finance, if you are not feeling confident about negotiating with your bank, if you feel that you could do better but don’t know the right questions to ask, if this is your first home loan, or you just don’t have the time to shop around, a mortgage broker can be a good choice.

However, most mortgage brokers only get paid if you take out a mortgage through them, this makes them ‘invested’ in your house purchase. You need to remember this and be aware that you can only 100% trust the advice of people that have nothing to gain from your house purchase going through.

Recommendations of property valuers and building inspectors should not come from your mortgage broker. Also, make sure you are comfortable with the amount of lending on offer. Some mortgage brokers are almost too good at their jobs and can get you approvals for amounts of money that make your head spin!

Make sure you know your limits and stay in your finance comfort zone! You do not have to take up an offer of a home loan that your mortgage broker has arranged for you! If a finance offer is unacceptable, you can get your mortgage broker to try again.

Most importantly! If you are not comfortable with your mortgage broker do not hesitate in changing mortgage broker or working with the lending institutes directly.

Finally, not all banks will deal with mortgage brokers, so if you want a BNZ home loan or a Kiwibank home loan, for example, you will only be able to approach these banks directly.

This information is part of the Propertytoolbox mortgage broker guide - This guide contains heaps of good info about mortgage brokers. Read more here.

What are Piles?

Piles are wooden or concrete posts under a house that form the foundations and are what many New Zealand houses sit on. The job of the piles is to distribute the weight of the house evenly across the soil underneath, and the house construction distributes the house weight as evenly as possible over the piles, ensuring the house stands straight and square.




Over time piles can rot away, causing them to fail, uneven distribution of house weight over piles can cause uneven settling, or movement of the ground under and around piles can cause piles to move.

Has the house been repiled?

If the house was built in an era that used totara piles, an a examination of the piles under the house will soon determine if repiling has happened. New piles are either concrete or tanalised (H5) pine and are easy to spot.


Make sure to check out that all the piles have been replaced. It is quite common to see that only a few piles are new, often these are the piles around the edge of the house.

Why repile?

Sometimes all the piles move, but more often different piles move to different extents. This causes the house to twist, bow, and crack, resulting in damage. The piles may have stopped moving, or may be continuing to move - this all depends on the cause of the movement. To halt ongoing damage, re-piling is necessary. If you are planning renovations, it pays to start with firm foundations or you are going to end up with an inferior result.

About repiling

Repiling involves digging new piles down to a firm base and attempting to re-align the house on this new foundation. Sometimes it is obvious that repiling work is necessary. You may find yourself walking up hill and down around a house! Usually it is a lot more subtle.

To establish if the piles are a problem and to what extent, you will need to ask the experts. A house inspector is a good start. Make sure you get a good idea as to what is caused the need for repiling – it this likely to be an ongoing issue? i.e. poor soil, ongoing subsidence, risk of landslide. Can the cause be fixed? i.e. leaking pipe, drainage issues causing water to run under the house.

Repiling - The process

Repiling is a major job and different repilers repile use different methods - some cut holes in the floor to access under the house and some lift the entire house up. The technique used depends on a variety of factors with access being a big deciding factor and personal preference and tools and equipment available to the repiler having an influence too.

I am repiling - What else can I do?

Repiling opens a lot of opportunities to do other things to a house, it can be moved, lifted up and another level added underneath, or shifted somewhere else completely! The access that is gained under the house is also an opportunity to do things underneath that in usual circumstances are quite difficult - like underfloor insulation and working with the plumbing and electrical systems.

Repiling requires a building permit - other additions and changes to the house can be added to the same permit so it pays to plan in advance exactly what you want to do with a house before you repile so all your permissions can be gained at the same time - saving money - and also allowing you to organise access under the house for other works while the repiling is happening.

A LIM is a comprehensive report containing everything the Council knows about a property or section and can include:

• Valuation data
• Yearly rates payable for the property.
• If there are any unpaid rates.
• Any charges for water.
• Information about Building Permits and Consents for the property.
• Any information in regards to whether it is a protected or historic building, or site, and if there are any protected trees.
• Any Resource Consents issued for the property.
• Any relevant planning issues or planning zones that impact the property.
• Any Resource Consents issued in the immediate neighbourhood.
• Information on subdivisions and developments affecting the property and the immediate area.
• Drainage information relating to both private and public sewer and / or storm water on the property.
• Special land features including potential erosion, avulsion, falling debris, slippage and possible hazardous substances.
• Consents, certificates, notices, orders or requisitions affecting the land or buildings.
• District Plan classifications that relate to the land or buildings.

For further details regarding what a council is required to provide you in a LIM, check out the Local Government Official Information and Meetings Act 1987.

The LIM will be up-to-date and contain a summary of all the information a council has on its files as of the day it is issued.

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With talk of interest rates going up soon, this is a hot topic. Here at Propertytoolbox we have some advice and tips on how to make this fix/float decision. If you are after info on just what fixing and floating is - check out our structuring your home loan advice.

The best places to go to be assured that you are taking the advice of people who have all the facts at hand, and all the best brains working on the fix/float question, is banks' websites and sites such as interest.co.nz. Economic reports and commentaries by banks' chief economists are a great source of information and will give you the information you need to be able to make a decision. Speaking to a mortgage broker can also be a great help - they have access to the most recent information,  and you can discuss your own situation with them to get the most relevant advice - usually for free! You can organise a chat with a mortgage broker here.

While all the major banks publish their own reports, a favourite of ours at Propertytoolbox is the BNZ Weekly Overview. This report comes out weekly and has a section tailored to residential borrowers called 'If I was a borrower what would I do'. The National Bank also has a good report tailored to the property market.

When deciding about structuring your home loan it is always best to gather information from a number of sources - then you can be assured that you are getting the full picture - or as close to it as you can given that nobody can predict the future.

Borrowing is a personal thing and you have to make a decision based on your own personal circumstances. If you are planning to sell your house, or are expecting a windfall then fixing may not be a good option as you may get charged large break fees when you pay off your loan. Also, if your circumstances mean that your finances cannot handle an increase in mortgage repayments then having large amounts floating or on very short term fixed may be too risky.

Here are some questions to ask yourself that may help you to decide:

• Are you likely to have any extra money that can go into your mortgage - a large amount or small amount here and there?
• Are you likely to move house - What are your plans for the next few years? Do you have plans to move on? Might you have to move for your job? Is your family growing? Might you go overseas?
• How do you feel about risk? - Would you rather know exactly what you repayments are going to be or are you happy with some variability.
• Current mortgage interest rates - Are interest rates on their way down or up?
• What are the experts saying?

When it comes down to it, nobody really knows what is going to happen in the future with mortgage interest rates. There are a lot of factors involved and the New Zealand and global economy all have an influence.

If you feel that you need help with this decision, then talking to a lending specialist at your bank, or a mortgage broker is really your best option. Not sure about mortgage brokers? Find out just how mortgage brokers work here.

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Costs for a registered property valuation can vary and often depend on many things including size of the property, as well as location. The cost of a valuation is usually in the range $500-$800. If you are planning to get a valuation, make sure to ring around at least 3 valuers and get a quote - Property Valuation NZ can help you out with this. Most valuers will be able to give you a fairly accurate indication of the valuation cost over the phone. They will ask you a few questions about the property, i.e. address, floor area, number of bedrooms so that they can give you an accurate quote.

Often the most expensive property to value will be an unusual one - it may not be big or grand, just unique. Valuers rely heavily on comparable sales data to base their conclusions of market value on. If a house is unusual and therefore has very little comparable sales data, this makes the house difficult to value. A valuation can still be done but can often take time; this is when the costs can increase.

To busy to call around property valuers? Property Valuation NZ is a website that profiles NZ property valuers - asking them all the things you need to know and giving it to you in the form of a standardised valuer profile - sounds good? Find a property valuer near you now!

Want to get a better idea of the market value of a house before you call in the professionals? Check out our suggestions on how you can work out the value of a house.

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Propertyvaluationnz.co.nz is a great place to find a property valuer. The website profiles property valuers in your area and includes information on experience, costs and the valuation service they provide.

The majority of valuers are also listed in the yellow pages. The listings include individuals and companies, as many valuers work for themselves, but many do work for larger valuation companies.

You can also go to the Property Institute of New Zealand (PINZ) website. Here you can find a list of registered valuers in your area.

If you need to get a valuer, these are good places to start. Recommendations from friends are also a valid. But do not use recommendations from your real estate agent for a valuer! Your real estate agent is not independent from the process so it is best to avoid them as a source of valuer recommendations.

The great thing about the Propertyvaluationnz.co.nz property valuer profiles is that the essential questions to ask when choosing a property valuer have been asked (and answered) for you. Find out about the right questions to ask when choosing a property valuer here.

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