Ten things to consider when buying a home

Whether you're buying your first home, upgrading or relocating, there’s a lot to consider beyond street appeal and school zones. We’ve put together a few things to think about before you sign on the dotted line.

1. Leaks and drainage 

When you first enter the house, pay attention to the smell. Does it smell damp or musty? Are there strategically placed scented candles around the open home? Do the carpets have any dark stains? If so, it may be a sign of a mouldy home. As with leaks, most insurers don’t cover pre-existing or gradual water damage, so look out for early signs of mould and consider investing in a moisture test. Check the drainage of the house, particularly if it’s on a downward slope. If there’s a lack of drainage or the house isn’t waterproofed, it could be at risk of flooding.

2. Water pipes 

If the house was built in the 70s, 80s or early 90s, check the condition of the water pipes and the age and condition of the hot water cylinder. Many pipe brands used during these decades have a limited life span of up to 30 years, including the joints. Make sure you know where the water mains are; a delay in locating the main water source can cause significantly more water damage when a pipe bursts.

3. Wiring and electricals

The permanent electric cabling and fittings of the house are known as electrical installations. It’s helpful to ask what type of wiring the home has. For example, if the home is old and hasn’t been rewired, the electrical installations may have aged and can become overloaded as the wiring would not have been designed for as many appliances as we might use today. If the lights flicker or the plugs or sockets feel hot, it may be a sign that the wiring isn’t performing as it should.

4. Structural integrity

Get a builder’s report to ensure the property is well maintained, structurally sound and weather tight. Check foundations, retaining walls, cladding and roofing. It’s best to find out when the roof was last resurfaced and pay attention to how many things are set into it, such as vent pipes, chimneys, and skylights. These need flashings which require regular maintenance to prevent leaks. Retaining walls also need to be maintained to avoid issues like slips. Check with your insurer on the financial limit they have in the policy for replacing or repairing them. If you’re an AA Insurance customer, you can find your policy documents on our website.

5. Building work

If building work - such as renovations or extensions - have been made to the property, find out when they were made, if council consent was needed and granted, and if any relevant codes of compliance were issued. This means the quality of the work and materials are up to standard. It may be worthwhile to engage a specialist such as a building inspector to check there are no pre-existing issues with the property. A few tell-tale signs you can look out for yourself are mould, soft flooring, poor quality workmanship or materials, such as chipped or lifting tiles.

6. Fences

When purchasing a property, check the condition of the fences, especially on the boundary. Boundary fences are owned equally between two neighbours, as set out by the Fencing Act of 1978. It doesn’t matter if the fence is on your property or theirs – you are both responsible for it. It’s also important to remember that if a fence is poorly maintained and falls down, it may not be covered by insurance. It’s important you look closely at your policy wording to understand the limits of your cover.

7. Land information

Consider whether the area is prone to natural hazards, and if so, what work has been or might need to be done to mitigate the risk? A Land Information Memorandum (LIM) provides a summary of the information the local council has on file for that property, which can help you in your due diligence. When you come to buying insurance, the premium charged could be affected if the property is prone to flooding or slips. The EQC Natural Hazards Portal has a handy map of EQCover claims from past natural hazard events across New Zealand. If you’re buying in Auckland, the Auckland Flood Viewer is a useful resource to see which areas are prone to flooding. Remember to work closely with your lawyer during this process.

8. Trees

If you’re looking to buy a home that has mature trees in the garden, there are a few things you’ll need to consider. Trees on the property may be protected if they’re of historical significance for example or play a part in preventing erosion. If you want to prune, remove or even build near a protected tree, you’ll need to seek resource consent. Protected trees will be listed on the LIM. Other things to be aware of is that tree roots can cause damage to the house’s foundations, pipes, paths, driveways and retaining walls. If you can, speak to the previous owners to find out if they know of any issues caused by the tree’s root system. Check for branches that could get in the way of power lines; it’s the property owner’s legal responsibility to keep their trees from growing too close to a service line. If you’re house hunting in winter, remember that deciduous trees lose their leaves in the colder months. Would they block your view or shade your property from the sun in summer?

9. Drug contamination

You can organise professional drug testing on the house if you have a reason to suspect that the property you’re interested in may have been used to manufacture methamphetamine, or if you think heavy usage may have happened at the property. If there’s a chemical smell in the house or chemical staining, or if there are signs of damage or aggression, you may want to get the house tested. Loss, cost or liability arising from illegal drug manufacturing is a common exclusion in insurance policies, so it pays to check your policy wording. Find out more on this topic from the Real Estate Authority.

10. Timeframes

With insurance being a condition of a mortgage, work backwards from your settlement date to ensure you have plenty of time to get your insurance sorted. Take the time to accurately calculate your sum insured. You can do this in several ways, including contacting a qualified building professional such as a builder, architect or quantity surveyor. You can use the online Cordell Sum Sure Calculator which estimates typical building costs for standard residential houses. Most insurance quotes are only valid for 30 days and your cover can start 45 days in advance. AA Insurance generally provides a letter of intent if the settlement date is more than 45 days out. The letter of intent provides assurance of cover and advises that we can offer home insurance at the new address, providing the information supplied to us is correct and meets our current underwriting criteria. When you come to taking out insurance, answer all questions openly and honestly, so as to avoid issues at claim time which could impact the outcome of your claim or your future insurability.

Our partner AA Home offer various home inspection services that may help you buy with certainty. Find out more about the services they offer on their website.

For more useful information about buying a home, check out the Real Estate Authority’s website settled.co.nz. Their Property Checker can provide specific guidance to help you assess the home you’re interested in.