The Pre Purchase Building Inspection Guide


When buying it pays to know about the condition of the house. That is where a pre-purchase building inspection is invaluable. This guide covers why you need to get a building inspection, how to find a building inspector who will do a good job, what you should expect when you get a building inspection and more, so leap in!

What is a pre-purchase building inspection?
Why get a building inspection?
What does the building inspector look at?
Will the building inspector spot everything?
What qualifications do building inspectors need?
Are their any guidelines for building inspectors?
I need to get a building inspector - How do I choose?
Questions to help you find the right building inspector
How much will it cost?
There is a problem with the house! What are my options?
How much will it cost to fix?
What other types of building inspections are there?
A building inspection as a condition of sale


What is a pre-purchase building inspection?


A pre-purchase building inspection is a visual, non-invasive inspection of a property. A building inspection is also known as:

The inspection attempts to identify significant defects, overdue maintenance, future maintenance issues, gradual deterioration, inferior building work, and/or other areas of concern. The building inspection takes into account that you are doing the inspection with the intention of buying the house, and the inspection focuses on details relevant to this decision.

Back to top


Why get a building inspection?


A house is an expensive purchase and money can be tight once you move in. You could regret your decision to buy a house if faced with unexpected repair bills that weren't in your budget. A building inspection will give you information regarding existing and potential building problems.

Identifying building issues before committing to the purchase means that you can choose to proceed with the purchase or pull out depending on what is discovered. A building inspection may identify issues that even the vendor is unaware of i.e. the hot water cylinder is starting to leak and will need replacing.

Once you have committed to the purchase of the house, you do not have any leverage to get problems fixed or to re-negotiate the price. Agreeing in your sale and purchase agreement that a new hot water cylinder be installed before settlement saves you around $1,000 and gets the vendors house sold! Everybody is happy! And your building inspection has more then paid for itself.

What if your building inspection identifies that the house is a leaky building? Here a pre-purchase building inspection may save you many thousands of dollars. Find out more about leaky buildings here.

If you can't assess whether or not a house has problems, or whether the things you can see are minor or major, then a building inspection is your safest way forward. Experienced building inspectors can assess all those water stains, cracks, creaks and sags and determine to what level they are an issue. They can also find problems, both existing and potential, that you wouldn't necessarily spot.

Building inspectors have seen hundreds of properties, and know all the problems that come with buildings of various ages and styles. They can look for tell-tale signs of these issues, and in addition are also building professionals that can spot sub-standard building work.

Back to top


What does the building inspector look at?


The building inspector does a top to bottom examination of the building. They will make an assessment on the condition of the building structure, roof, foundations, exterior walls and wall linings, heating system, windows and doors, insulation, and ceilings.

Their examination will be a visual inspection, where only things that are able to be accessed and viewed through safe and reasonable means will be inspected. An inspector may move an item of furniture to look at an area of wall or floor or to access a manhole, but they will not remove wall linings to check for insulation.

Back to top


Will the building inspector spot everything?


Building inspectors can't guarantee they will find everything wrong with a building. They are limited to a visual inspection of a building unless the owner agrees to remove such things as wall-linings or floor boards. That is unlikely, so the building inspector will only check areas of the building that have safe and unobstructed access.

An inspector can't guarantee the building meets the Building Act and/or local regulations so will not check to see if the council has issued any resource consents, building consents, code of compliance certificates, etc for any work carried out to the property. But they can identify building work that is likely to have needed a building permit.

Information about permits and consents can be found by searching the council records or ordering a Land Information Memorandum (LIM) from the council. For an additional fee, some inspectors will look at the property records held by the council and prepare a special report on the findings.

Back to top


What qualifications do building inspectors need?


In New Zealand, there are no formal or legal restrictions to become a pre-purchase building inspector.

However, a building inspector should be a qualified building professional who is experienced in assessing residential buildings and follows best practice for the industry. It is also important that the inspector has up-to-date public liability insurance and professional indemnity insurance that covers damages and legal costs.

You want to be assured they are capable of identifying and communicating significant problems with the property and that they, and you, are financially covered should something go wrong.

Some inspectors are members of professional groups that formally recognise the qualifications and experience of its members. In particular, some of the members of New Zealand Institute of Building Surveyors (NZIBS), New Zealand Institute of Architects (NZIA), New Zealand Institute of Quantity Surveyors (NZIQS), or Institution of Professional Engineers New Zealand (IPENZ) would be suitable for building inspection work.

The New Zealand Institute of Building Surveyors is an organisation that specialises in coordinating and regulating pre-purchase building inspectors. If your building inspector is a member of NZIBS they will have a relevant background, a qualification and will complete your inspection and report using New Zealand Standards NZS 4306:2005 Residential Property Inspections.

Back to top


Are there any guidelines for building inspectors?


There is no requirement in New Zealand for pre-purchase building inspectors to follow a code of practice or standard.

When carrying out building inspections, there is a New Zealand Standard (NZS 4306:2005 Residential Property Inspection) that a building inspector can choose to use. This standard was created to introduce consistency and reliability into the pre-purchase building inspection industry. The standard gives minimum requirements for pre-purchase building inspections and report preparation. Building inspectors will make it clear if they work to this standard.

One of the requirements of the New Zealand standard (NZS 4306:2005) is that building inspectors should have up-to-date professional indemnity insurance. If they say they work to the standard that should be the first thing you ask about. It is always good practice to ask this of any professional.

Back to top


I need to get a building inspector - How do I choose?


Before you employ an inspector you have to ask yourself: Often people use a friend or relative that is a builder to do the inspection for them. This tends to be an informal arrangement and possibly the cheapest. The main problems with this approach are:

If possible, try and find a building inspector without suggestions from the real estate agent trying to sell you the house. It is important to organise your building inspection totally independently of anyone involved in the sale of the house to be confident in the result. Good places to look are the yellow pages, or Google, or get recommendations from friends.

Back to top


Questions to help you find the right building inspector

Q: Do you have any building inspection qualifications and/or are you a member of a professional group?
A: A New Zealand Institute of Building Surveyors (NZIBS) member or a BOINZ Accredited Building Surveyor meet formal requirements to attain these memberships, so are an good option! Also a master builder, an architect or an engineer may be a great option if they follow best practice for the industry. Do the research on any group your building inspector says they are a member of - most groups will be represented on the internet.

Q: Do you follow the NZ standards for building inspections?
A: Hopefully yes! If not, quiz them about what personal guidelines they follow.

Q: How much of your work is building inspections?
A: A dedicated building inspector is your best bet.

Q: Do you have up-to-date professional indemnity that covers damages and legal costs and public liability insurance? Do you have any exclusions in your insurance?
A: They will need professional indemnity insurance as a minimum. Be careful about insurance exclusions - some building inspectors may not be fully insured.

Q: How long will the inspection take?
A: It should not take less than 2 hours for a full inspection.

Q: Can I be there for the inspection?
A: You should be encouraged to attend.

Q: Will you go over the report with me?
A: A great deal of the information in the report will be technical. Your inspector should go over all their findings with you.

Back to top


How much will the building inspection cost?


A building inspection will usually cost between $350 - $1,200. Why the range? There are many reasons. The cost can depend on the building:

Even for the same building there will be a price variation from inspector to inspector. This can be due to: Sometimes there is no concrete reason for a different in price. Just remember that cheapest isn't always best.

Back to top


There is a problem with the house! What are my options?


Now that you have all the facts, no matter how bad they are, you may still be happy to proceed with the purchase. Hopefully you have some rough idea of what it will take to fix the problems and you are happy with the work involved and the cost.

If the findings of the building inspection have affected your desire to buy the house, the decision may be obvious, you no longer want the house and the deal is off! This can be a very hard decision to make as by this stage you have invested time, money, and emotions into the house, but in many cases it is the best decision.

If you are still thinking of going ahead with the purchase there are a number of options open to you.

You could enter negotiations with the seller again to reduce the agreed price, to take into account the cost of repairs. Alternatively, you could ask the seller to have the repairs done, at their cost, before you take possession of the house. Either way, these negotiations need to be formalised by your lawyer and included in the sale and purchase agreement.

Back to top


How much will the problem cost to fix


In most cases a building inspector won't know how much it will cost to fix a problem; this is not their area of expertise, so you may need to ask for estimates from a builder or other tradesman.

To find out costs, it is always a good idea to get at least a couple of quotes, even if it is just for bargaining power to get the purchase price down. These estimates do not need to be detailed, but should come from an independent specialist.

Back to top


What other types of building inspections are there?


Often dedicated building inspectors can do other types of building inspections, in particular weathertightness surveys. This is when a building is inspected focusing on identifying whether or not it is a leaky building or to what extent 'leaky building' syndrome affects a building. In some cases it may be worthwhile to get a weathertightness survey done before purchasing. If you want to find out more about leaky buildings, the consumer build website has a lot of good information.

Back to top


A building inspection as a condition of sale


Do you want a building inspection as a condition of a sales and purchase agreement? As a building inspection takes usually takes 3 - 4 working days to complete you'll need to allow yourself at least this amount of time to satisfy your conditions. Don't rush, you will need time to go over the information, and you should allow yourself at least a week (5 working days) to get this condition sorted.

Back to top

Next - Council LIM Reports...