Mistake to overlook due diligence
Don’t make the mistake of neglecting due diligence – no matter how hot the market, warns real estate agency.
Wednesday, March 30th 2016, 12:00PM
by Miriam Bell
Recent reports that desperate house buyers are not getting essential pre-purchase checks like builders’ reports, valuations and legal advice have prompted industry concern.
Apparently, many vendors now supply builders’, LIM reports and title checks – and many buyers opt to take this information rather than commissioning their own.
But following this path can lead to unpleasant, often expensive, surprises down the track for buyers.
Harcourts NZ CEO Chris Kennedy said if time is tight and competition is high ahead of a sale, vendors can supply reports with the aim of making things easier for prospective buyers.
“When the market heats up and auctions are brought forward, buyers start to worry they’re going to miss out. In those circumstances it can be very tempting to take a vendor-supplied report.
“There’s no advantage in winning an auction if you end up with problems you hadn’t foreseen.”
Taking supplied information as a reference is fine - but getting independent expert advice is essential when preparing to buy a property, he said.
“We would always recommend to any prospective purchaser of a property that they should carry out their own due diligence.
“That includes arranging for an independent building inspection, and requesting LIM reports and title checks.”
Getting independent due diligence means a buyer knows the source of the information, as well as the credentials and loyalties of the person who has supplied it, Kennedy said.
“It means a buyer can make an informed choice about whether to purchase or not.”
He said it was a good idea for buyers to get recommendations on reliable building inspectors and other relevant professionals from friends or trusted associates who had used them.
Industry experts recommend that buyers do as much comprehensive due diligence, and get as much background information, as possible on any property they are interested in purchasing.
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