Possibly buying a house. What things to look for?

Forums › Off topic › Possibly buying a house. What things to look for?

1 | 2 | 3 | 4

5604 posts

Uber Geek

ID Verified

#477682 4-Jun-2011 10:38

On top of all the house inspection stuff (which is very important), I'd say definitely check the neighbours/neighbourhood as well. As mentioned above (and from personal experience), rowdy or inconsiderate neighbours can make your life a misery adn when you own the house it isn't as simple as handing your notice into the landlord and finding somewhere else to live.

Is the area you are buying in mostly a rental area or owner occupiers?
Is it a busy street? Or a dead end cul-de-sac? How much traffic/boy racers etc?

Sharesies kids

Free kids accounts - trade shares and funds (NZ, US) with Sharesies (affiliate link).

robbyp

1199 posts

Uber Geek

#477718 4-Jun-2011 13:01

keewee01:
vexxxboy: best way to look for leaks is to visit the house when its pouring down , then you can check the ground drainage as well as all the spouting and the inside for leaks , meant to be heavy rain this weekend.

+1 - years ago we bought a house in Lower Hutt; the first Open Homes we wanted to go to was canceled 'for some reason'. Being a lot younger, we thought it must just be something that happens on wet days sometimes.

After we bought the house we found out why - the drainage on the property was appalling!

Even building inspection companies can miss major things too - turned out there was a glaringly obvious issue with one to the windows frames (touched up by the DIY previous owner) - completely missed by the building inspection.

In my opinion NZs building stock on average is pretty poor quality, over valued, and largely uninsulated and can be cold and damp. Open houses I have been too, sellers have filled and painted over problems, so alway look for fresh paint and bubbling paint. When this happens it makes building inspectors jobs harder, as they will usually only do a visual inspection, so can't see problems that have been covered in paint.

The best piece of advice I can give is buy a moisture meter. You can prod it into suspect window frames, and it will give an indication of whether there is a leak or rot.

The other thing you need to look out for is asbestos, especially if you plan to rent it out in the future, as I believe presence of asbestos must be made known to any tenant. It can be very expensive to remove safetly, and many houses are rddled with in the linings and foundations.

robbyp

1199 posts

Uber Geek

#477725 4-Jun-2011 13:12

xpd: We just bought our 2nd house so went thru the process again... 1st place we were keen on had what we wanted in the right price.
They were asking mid-$400's we went in at $415 expecting them to drop to around $440 but they came back at $420 - alarm bells started tingling.....

Paperwork checked out OK, valuation passed (lot of banks want recent registered valuation before issung loan) building inspection failed big time due to a roof that was about to fall apart due to rust.

Tried negotiating with them but they refused to saying we had already got a good price - but we didnt know about the roof at that point so them saying that meant they knew about the roof before the inspection... so we left it.

Found a better place with more than what we wanted $50k cheaper literally 2mins down the road from the 1st one....

So registered builder to do the inspections is must these days. Go in at a silly price, let the negotiations begin....

Good luck :)

Replacing of a roof isn't usually that expensive, although depends on the size and complexity of it. But that sort of thing is called deferred maintanence, and you usually deduct that cost from your offer. A house may have 100k of deferred maintenance that is picked up in a building report. In that case you take what you would normally offer if it was all up to scratch, and deduct the cost of repairs. Unfortionatly many people don't factor that in. People will often look for houses in the range that their bank will lend them money on, and offer that price, without factoring in the fact that lack of maintenance from the previous owner is going to cost them in the future. This is one reason house prices have rocketed up.

xpd

aka Fast Raccoon !
13018 posts

Uber Geek

Retired Mod

ID Verified

Trusted

Lifetime subscriber

#477761 4-Jun-2011 15:05

robbyp:

The best piece of advice I can give is buy a moisture meter. You can prod it into suspect window frames, and it will give an indication of whether there is a leak or rot.

Buying them is expensive, any decent building inspector will have one anyway and check the usual suspect spots.

Someone mentioned asking about the neighbours, traffic, boyracers etc - agents wont tell you a thing, they want to sell the place. Even asking the neighbours wont always give you a good overview as they could be party animals but arent going to admit it....

Gavin / xpd / FastRaccoon / Geek of Coastguard New Zealand

LinkTree - kiwiblast.co.nz - Lego and more

Support Kiwi music! The People Black Smoke Trigger Like A Storm Devilskin

NZ GEEKS Discord______________________________

SandyJ

152 posts

Master Geek

#477769 4-Jun-2011 15:41

"Even asking the neighbours wont always give you a good overview as they could be party animals but arent going to admit it...."

Got caught like that myself. Perfect in every way .. and the only neighbours, turned out to be the ones from hell. He yells and she screams, and Im stuck with them. The best house in the street and I have no idea how to market it to sell it. :(

Do your homework carefully NonprayingMantis.

wreck90

780 posts

Ultimate Geek
Inactive user

#477771 4-Jun-2011 15:48

keewee01:
vexxxboy: best way to look for leaks is to visit the house when its pouring down , then you can check the ground drainage as well as all the spouting and the inside for leaks , meant to be heavy rain this weekend.

+1 - years ago we bought a house in Lower Hutt; the first Open Homes we wanted to go to was canceled 'for some reason'. Being a lot younger, we thought it must just be something that happens on wet days sometimes.

After we bought the house we found out why - the drainage on the property was appalling!

Even building inspection companies can miss major things too - turned out there was a glaringly obvious issue with one to the windows frames (touched up by the DIY previous owner) - completely missed by the building inspection.

he he, we went to an open home in auckland and it was raining. Water entrance was clearly visible around the window frames. Pointed it out and the agent goes 'oh yeah'.

This was probably before the full 'leaky building' syndrome was public, but didn't buy it anyway.

robbyp

1199 posts

Uber Geek

#477837 4-Jun-2011 20:29

xpd:
robbyp:

The best piece of advice I can give is buy a moisture meter. You can prod it into suspect window frames, and it will give an indication of whether there is a leak or rot.

Buying them is expensive, any decent building inspector will have one anyway and check the usual suspect spots.

Someone mentioned asking about the neighbours, traffic, boyracers etc - agents wont tell you a thing, they want to sell the place. Even asking the neighbours wont always give you a good overview as they could be party animals but arent going to admit it....

You can pick up wood ones for under $100, which are adequate to get an idea of any potential problems. I was talking about taking it with you when initially viewing the house, as you can't take an inspector to each open home, which will cost between $400-$1000 for a decent inspector.

richms

26406 posts

Uber Geek

Trusted

Subscriber

#477838 4-Jun-2011 20:42

Things that have caught me out with this house dad had bought.

Foundations. You cant do anything else to a house properly if they are screwed. Overlooked in so many reports.

Also drainage. Proper stormwater hookup and not just a soakpit etc that will overflow in the first heavy rain.

Carparking. 2 per bedroom is ideal, non stacked as people get annoyed having to do the car shuffle at 3am when someone wants to go out.

and things a friend has come across.

Excess fragrance in the open home - its hiding something, musty smell, leaking sewer smell, whatever, there is a reason for it and it should be a concern.

Access for wiring, if its a slab house with an upstairs you are totally out of luck for cheap, presentable wiring. as you are on here, that is important to you.

wiring, many houses are old, have insufficuiant power circuits to the kitchen to run a plethora of cooking appliances. In the old days when you had a range and it had 2 more outlets on it, it was less of an issue, but with cheap kitchen renos swapping a range for a hob and oven, you lose those so are back to the others.

Same for bedrooms. Look at the power panel to see how many power circuits there are, look what the supply to the house is. Look at the age of all the gear. If you renovate and its an old panel, you may be up for heaps to put RCD's in for your new stuff. Also watch for mismatched power and light switches, particually off brand crap like the arlecs from bunnings, means someone has been DIYing stuff.

Age of the water heater, and cheapness of it, the rheem mains pressure ones are junk and will leak quickly, and really old ones are inefficiant and low pressure.

Things like tatty kitchen doors etc can be solved quite cheaply as a DIY just like property flippers do, whereas structural stuff is not cheap, and it will probably mean undoing all the halfassed do ups that people have done to up the value before sale, so you want to be sure that its got good bones in the place.

Richard rich.ms

pih

558 posts

Ultimate Geek

Lifetime subscriber

#477854 4-Jun-2011 21:20

Sounds like it's your first house purchase which probably means it's your first mortgage. Congratulations, you're in for some fun and a life full of upkeep :) Everyone's mentioned great things to check about the house, section and neighbourhood, but I'd check a few things with your bank too. We got our mortgage from a large Savings Bank in Auckland (whose name I will only slyly mention...):

Our first fortnightly payment was about $300-400 less than I expected it to be. I called up after the second payment was also short by the same amount and asked what on earth was going on. The rep told me that there was a two-month interest-only period that they "give everyone with a new mortgage to ease them into it". I checked my mortgage fineprint (I HAD read it previously but it wasn't told to me by out agent and I had glossed over it in the fineprint), sure enough there was a 2 month interest only period to begin with. Remember these words:

INTEREST ONLY PERIODS = THEFT

Don't be fooled, every week/fortnight/month they charge you "interest only" for *whatever* reason, it is straight money from your pocket to theirs. It extends your loan by the same amount, doesn't decrease your principle by one cent, and the 2 month period they signed me up for would have *cost* me a total of nearly $4000 extra *up front* if I had not taken action. I demanded that they allow me to pay principle immediately and complained to them that they had not informed me of this ludicrous and money-grabbing "gift" they seemed to give all new mortgage holders.

Issue 2: when we had our mortgage restructured recently, they tried to do the SAME thing!!! I insisted that we immediately pay principle and they said their system wouldn't allow it, I had to make at least one interest only payment in the interim. Theft, I tell you.

(Unrelated side-note, I have serious concerns about this same bank's security practices, and the only reason I'm still with them is that I haven't had the time to move all 4 personal accounts and 2 business accounts that I have with them. I should be doing that soon.)

So yeah, while you're checking out the details on the house, don't let the detail on the mortgage trip you up, and don't let any bank force you to pay *ANY* interest only payments - it's nothing short of theft legalised in fineprint.

robbyp

1199 posts

Uber Geek

#477872 4-Jun-2011 22:25

pih: Sounds like it's your first house purchase which probably means it's your first mortgage.

The other mistake people make is borrowing as much as a bank will lend them. Banks are again only requiring small deposits. This means that if house prices drop just a little, you will end up owning more to the bank than the house is actually worth. This is called negative equity. This is happening quite a bit Oz at the momen as house prices drop over there.

Only borrow as much as you can afford and that you think the house is worth.

Also don't trust valuations. Use the councils rateable value as a more true guide to the house value. Valuations can over inflate the price from my experience. Look at all those apartment valuations in Auckalnd before the credit crunch that were highly inflated.

richms

26406 posts

Uber Geek

Trusted

Subscriber

#477876 4-Jun-2011 22:37

Also you will probably want to borrow some more quite soon on to fix the beige paint job, feature walls and cheap junk hardware that gets installed by people as they are about to flip a house since idiots see shiney new handles and think that its good.

Richard rich.ms

ChundaMars

9 posts

Wannabe Geek

#477895 4-Jun-2011 23:56

doublehell: Forgot to mention - have your lawyer do a due diligence check on the property (first thing they will do is get a LIM report). Make sure that there are no upcoming consents for the area that have already been approved (like a pre-school etc.)

Make sure you check in with your lawyer before signing anything. Otherwise, make sure that whatever you sign has an exit clause that stipulates that everything is subject to the review and approval of your lawyer.

This advice is often given, but is actually a waste of time and wouldn't stand up in court - get your lawyer to check the document BEFORE you sign it, if you are worried.

Clauses that allow for checking of specific things by the lawyer (LIM reports, title checks etc.) are ok, but a blanket "subject to lawyers approval" doesn't cut the mustard.

This was the advice given to our company by our solicitor when I was in real estate a couple of years ago - not sure if there's actually been cases that have gone before the courts but would you really want to be the first?

ChundaMars

9 posts

Wannabe Geek

#477896 5-Jun-2011 00:01

robbyp: Also don't trust valuations. Use the councils rateable value as a more true guide to the house value. Valuations can over inflate the price from my experience. Look at all those apartment valuations in Auckalnd before the credit crunch that were highly inflated.

Are you serious? RVs are a complete and utter waste of time, at least here in Christchurch. Not to mention that they are only issued every 3 years, so basically for at least 2.5 years of that time they can be considered hideously out of date. And nobody actually visits the house when the RV is done, so if you buy a house, spend $50,000 on it putting in new kitchen, bathroom, heating etc. the RV doesn't change. Nope, never use the RV as anything but a rough (emphasis on rough) guide to value - maybe, give or take up to 50%!

I wouldn't trust a valuation provided to you from the seller, for obvious reasons, but if you commission your own valuer you should get a good indication of the market value...

xpd

aka Fast Raccoon !
13018 posts

Uber Geek

Retired Mod

ID Verified

Trusted

Lifetime subscriber

#477916 5-Jun-2011 08:30

robbyp:
pih: Sounds like it's your first house purchase which probably means it's your first mortgage.

The other mistake people make is borrowing as much as a bank will lend them. Banks are again only requiring small deposits. This means that if house prices drop just a little, you will end up owning more to the bank than the house is actually worth. This is called negative equity. This is happening quite a bit Oz at the momen as house prices drop over there.

Only borrow as much as you can afford and that you think the house is worth.

Also don't trust valuations. Use the councils rateable value as a more true guide to the house value. Valuations can over inflate the price from my experience. Look at all those apartment valuations in Auckalnd before the credit crunch that were highly inflated.

I dont agree.... borrow all the money the bank will loan you if you want, just remember its got to be paid back tho with interest...... :)

As for valuations, banks dont accept GV/CV etc they want a registered valuers valuation - the valuers take the GV etc into consideration as well so theyre usually pretty bang on in my experience. Even the "caravan" of real estate agents that go through a house when its on the market usually work out what its worth between them knowing the market etc.

Gavin / xpd / FastRaccoon / Geek of Coastguard New Zealand

LinkTree - kiwiblast.co.nz - Lego and more

Support Kiwi music! The People Black Smoke Trigger Like A Storm Devilskin

NZ GEEKS Discord______________________________

trig42

5604 posts

Uber Geek

ID Verified

#477917 5-Jun-2011 08:35

Lower RV is better = less rates!

RV will increase by a certain percentage for your area over the 3 years. It will also increase more if you have had building work done that requires building consent (because the council will know about that).

1 | 2 | 3 | 4