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What to know when buying a home

Legal Requirements: It is important to seek legal advice when purchasing a property in New Zealand. A lawyer can guide you through the legal requirements and processes for purchasing a property.

Property Information: Before purchasing a property, it is important to gather as much information as possible about the property and the surrounding area. This includes obtaining LIM (Land Information Memorandum) reports, building inspection reports, natural hazard information and valuations. These reports can provide valuable insight into the property and help you make an informed decision.

Insurance: It is important to have adequate insurance when purchasing a property in New Zealand. Home and contents insurance can provide protection against damage and loss of property, while mortgage protection insurance can provide cover for your mortgage payments in the event of illness, injury or redundancy.

Financing: When purchasing a property in New Zealand, it is important to consider your financing options. This includes choosing a mortgage lender and comparing interest rates and loan terms to find the best deal for you.

Property Ownership: When purchasing a property in New Zealand, it is important to understand the different forms of property ownership. This includes freehold, leasehold, and unit title ownership. Each has its own advantages and disadvantages, so it is important to understand the implications of each before making a purchase.

Settlement: The settlement process is the final stage of the property purchase process. This involves the transfer of ownership and payment of the purchase price. It is important to ensure that all the necessary documents and funds are in place to ensure a smooth settlement process.

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LIM Reports

A Land Information Memorandum (LIM) is a report prepared by the council at your request. It provides a summary of all the current information held by the council on a property. Information provided should include:

  • Building consents and resource consents for the property
  • Resource consents for properties in your area
  • Information on any special land features or characteristics (flooding, erosion, hazardous substances)
  • Zoning information and planning relating to that area
  • Aerial photographs and plans detailing the public and private services available to the property
  • Rates details for the property
  • Any other information the council may hold that is relevant

When purchasing a property, it is important to purchase a LIM report as part of your due diligence. A LIM report can uncover a range of potential issues about the property. For example, the property may have undergone construction or alterations without the necessary council approvals (and it may not be possible to obtain retrospective consent for the unpermitted work) or the property may be susceptible to natural hazards like flooding. A LIM condition in a sale and purchase agreement allows the buyer the opportunity to check the LIM report for the property and if it does identify an issue, the buyer can negotiate with the seller to fix the problem or withdraw from the agreement altogether.

A Landcheck report is not a substitute for a LIM report. A Landcheck report should be purchased during the early stages of the home buying process where you are considering multiple properties, whereas a LIM report should be purchased when you know you want to pursue a particular property.

Mitigate your risks

When buying a home in New Zealand, there are several risk mitigation measures that you can take to protect yourself, your whānau, and your investment.
By taking these risk mitigation measures when buying a home in New Zealand, you can make an informed decision and protect yourself against potential risks and hazards. It’s also a good idea to consult with professionals and seek legal advice to ensure that you fully understand the risks and implications of purchasing a property.

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If you’re interested in a property, before moving ahead with due diligence you should first understand if the property is at risk of any natural hazards, as this knowledge may stop you from pursuing the property, saving time and money that you would have otherwise spent.

Consider the location

You should carefully consider the location that you plan to look for properties in as some are more at risk of hazards, such as flood zones or earthquake-prone areas.

Conduct a thorough inspection

Before purchasing a property, it’s important to conduct a thorough inspection to identify any defects or issues that could cause problems in the future. You should engage a qualified building inspector to check the property for structural damage, dampness, or other issues that could affect its value or safety.

Check the property history

You should obtain a Land Information Memorandum (LIM) report from the local council to check the property history and any potential risks such as flooding, land instability, or environmental hazards. You should also conduct a title search to check for any legal issues or restrictions that could affect the property’s value or use.

Engage professionals

You should engage professionals such as lawyers, real estate agents, and building inspectors to help you navigate any potential risks or legal issues associated with the property.

Purchase insurance

You should purchase insurance to protect yourself against potential risks such as natural hazards, environmental issues, or damage to the property. You should consult with an insurance broker to ensure that you have appropriate coverage for your needs.

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Kiwis trust Landcheck