Simply put, your due diligence into a property is finding its “true nature” and any issues or risks you should be aware to avoid unexpected costs or complications in the future.  The list below is not prescriptive and more of a guide, nor should it be followed to a “T” or in the order I have put:

1 Getting to know the past

You will be looking into the property’s history, such as whether it has been well maintained, what sort of renovations or repairs have been undertaken on the property and when, whether it was affected by past issues such as the Auckland Anniversary floods in 2023 (if property is in Auckland, of course). 

This stage may involve getting a Property File and/or LIM report from the Council and/or making enquiries with vendors’ agents and/or vendors themselves.

2 Physical Inspection

A building report is advisable regardless of whether it is a newbuild or a property already lived in.  A building inspector will assess the overall condition of the property, its structural integrity, plumbing, roof, electrical systems, etc. in a non-invasive manner.  You can be present at the inspection with your building inspector.  So, too, will vendors’ agent.  You can take that as an opportunity to ask vendors’ agent any further questions you may have.

3 Budget Crunch

You will be looking into your finances towards the property and talking to your mortgage broker or bank manager, solicitors, family and friends to ensure that you have enough finance to buy the property.

You will, too, be looking into ongoing future expenses, once settled, and whether it will be manageable to pay your mortgage and outgoings associated with the property (water, power, rates, etc.).  If you are buying a leasehold property and the ground rent is some $20k or $60k a year, it is important that you can service that. If you are buying a unit title, there will be standard body corporate levies of around $5k a year (depending on the property and facilities), and sometimes special levies on top.

4 Location, location, location

Are there schools, parks, beaches, shops, and such other amenities? Is access to motorway and buses handy? How long will it take you daily to get to and from work? Is the property located close to your friends and family? Is it on a main road or at the end of a cul-de-sac? Are there parking spaces nearby?

5 Legal and Compliance checks

You should work with your solicitors and mortgage broker/bank manager to ensure that the property is compliant with Council and building codes, there are no outstanding notices, the house is insurable, if the bank will lend on that particular property, and, of course, your solicitors should review the title. 

6 Long-term potential

You may get an appraisal to get a better idea of the market value of the property. While you may think you are buying your “forever” home, circumstances may change resulting in a sale of the property so it should be “re-saleable”. 

We can’t know what we do not know, of course. The best you can do during your due diligence is to be honest about your expectations, ask the right questions and do your research.  The expert team at QCL are here to help.