The New Zealand housing market has been hot for some time now. We are frequently seeing auction dates being brought forward due to high demand (although in light of recent Government initiatives, this might change – time will tell!)
If an auction for a property that you are interested in gets brought forward, you will need to weigh up the risks involved in bidding at an auction if you have not had time to complete a proper due diligence (DD) investigation.
There can be major risks involved with purchasing a property, particularly if you are buying a property that was built pre-quake in Canterbury. Purchasing a property is one of the biggest investments you will ever make and it could cost you a lot if you rush into it.
If you are looking at purchasing a pre-quake property in Canterbury, it pays to gather all of the EQC and/or insurance information from the real estate agent or vendor and provide this to the company who is carrying out the building inspection. That way they will have an idea of what damage occurred and they can check that it has been repaired to standard.
Having your lawyer check the Record of Title and a Land Information Memorandum report is also an important part of your DD investigation that can uncover issues that you cannot physically see when viewing the property.
Finally, you need to have your finance and insurance sorted before bidding at auction. You may have a pre-approval letter from your bank indicating what they will lend you, but you will also need to have confirmation from your bank that the property you are bidding to buy is satisfactory security to the bank. They may want a copy of the building report, scope of works and any other reports relating to the property before providing their confirmation.
If you would like help with your property due diligence prior to bidding at an auction contact Ruby Haddon, Solicitor (DDI 03 343 8586 / email@example.com).