Should you trust a Seller's Builder's Report?5 Aug 2021

The process of buying a property can often be frantic, stressful and confusing. Even when you do find a property you’re keen on, you then need to do your due diligence to make sure it’s worth the investment. However, doing all the research requires both time and money, which most people feel short on in the thick of property hunting. Because of this, it can be very tempting to take a shortcut, especially when everything seems to be changing by the hour.

One shortcut which often presents itself is the seller or agent offering to give you the information you need, so you don’t need to get it yourself. This information can include a Property Inspection (Builder’s Report) or Land Information Memorandum (LIM Report). While this may seem like a good idea, you need to be aware of the risks involved.

Risks Of A LIM Report From The Seller


A LIM Report is a document obtained from your local council. It summarizes all the information they have on file about the property at the time. This can include how much the rates are, geographic hazards, and consents for any work done.

If you choose to have your LIM Report provided by the seller, the main thing to check is the date. If the report was prepared within the last couple of months, it’s safe to assume that the data is up to date. However, if the date indicates it was put together a year ago, the information may not be reliable. Things may have changed in the interim, such as an increase in rates bills, for example.

Risks Of A Building Report From The Seller


If you choose to have a Builder’s Report provided to you by the seller or real estate agent, be aware that it does not provide you with any future security. If you end up purchasing the property, and then find problems, you will not be protected by the Builder’s Report in any way. This is because the inspector’s contract is with the seller, not with you. Unfortunately, that means you’re on your own! You’ll have no choice but to spend a significant amount of money to get the problems fixed yourself.

But how likely is this scenario to actually happen? Unfortunately, it’s more common than you think. Remember that agents work for the seller, so their job is to do whatever they can to sell the property for the highest price. The Building Officials Institute of New Zealand (BOINZ) is aware of many real estate agents with their own selected inspectors, who provide ‘soft’ building reports. These reports can be misleading and leave out key information.

This is why the Real Estate Authority recommends contacting an independent, accredited property inspector yourself. The report they provide will reliably identify any current defects and required maintenance. It should also clarify which matters are simply age-related (may not be major) and which are urgent problems. Furthermore, their insurance will protect you if you need to unexpectedly fix something that wasn’t in the report.

TelferYoung is New Zealand’s largest independent property valuation and advisory group. We provide trustworthy pre-purchase building inspections in Rotorua, Taupo, Taranaki and Northland. Purchasing a home is likely to be the largest investment you will ever make, so we believe it’s crucial to know exactly what you’re buying. Contact your local TelferYoung property inspector to request a free quote today.

Link: Contact your local TelferYoung Property Inspector