When buying a property, due diligence before making an offer is a crucial step. It protects your biggest investment by uncovering any hidden issues that could affect a property’s value or use. 

Skipping the due diligence can lead to costly repairs or restrictions on how you can use the property. If you discover defects, you can negotiate with the seller to have them fixed or to ask for a lower asking price.

Ian Keightley, Head of Operations, Raine & Horne New Zealand said: “Carrying out due diligence in advance of making an offer ensures you fully understand the asset you’re considering buying. Many settlements fall over because material information was not fully disclosed, or worse, lawyers have been called in to resolve a dispute when hidden faults have been discovered after a transaction.”

Ian continued, “Choose a real estate agent you can rely on to ask the hard questions of the vendor and who can help you find out if your property really is in the condition, it is being marketed as having. Partnering with clients to carry out a robust due diligence process is a key tenet of the Raine & Horne approach. Contact us if you would like to hear more about this. 

Apart seeking information from the vendor, buyers should thoroughly check a property and use the services of a qualified building expert to have a property inspection report prepared. “The cost of this service will be a bargain if it prevents costly mistakes,” Ian added.

As part of a thorough inspection, ensure the roof, plumbing, electrical wiring, the piles are checked, along with the condition of drainage systems, insulation. Also, the inspection should look for evidence of house movement and any alterations that do not appear on the plan.

“Check the property for potential signs of leaking and make sure you view the property’s file at the local council and obtain a Land Information Memorandum (LIM) from the council,” Ian recommended.

The property’s LIM details any permitted alterations that have been made to the property and any proposed zoning or other changes to the area or the property. The LIM report will also show whether existing works have received council consent and whether the council requires any additional work.

“You should also seek legal advice about the property title, have a title search done and know about easements, including rights of way,” Ian said.

“Buyers should only sign a purchase agreement that they are confident is right for them.”

Whether you want to rent, let, sell or buy a property, don’t hesitate to contact your local Raine & Horne office.