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August 31, 2016 at 8:12 AM



Up to three-quarters of house sales in Wellington's heated property market are going through based on vendor-supplied builders' reports, according to leading agencies.

But would-be buyer Janet MacDonald, who pulled out of a Wellington auction last week because of problems uncovered by her architect, is warning such reports aren't "worth the paper they're written on".

MacDonald was about to bid on a house in Kelburn at a Harcourts auction after being supplied with a positive builder's report by the vendor. 

But when her architect arranged a viewing on the day of the auction, he found a number of structural problems that either were not in the report, or which appeared as minor.

MacDonald pulled out, but says the house in Kelburn still sold for more than $800,000 – more than $200,000 above its RV – and she was not sure whether the discrepancies uncovered by her architect were disclosed to bidders.

Consumer watchdogs and the real estate industry regularly advise potential buyers to get their own reports, but in Wellington's current sellers' market, increasing numbers are taking risks in the hope it will help them secure a house.

Many vendors are now accepting only unconditional offers, excluding all those desperate would-be buyers whose offers are dependent on builders' reports.

In another case last week, a woman is understood to have put a $31,000 deposit on the house of her dreams in the Wellington region, after receiving a builder's report provided by the vendor's agent, also from Harcourts.

But when she got an independent report, she found the house was leaky and harbouring black mould.

She pulled out, but the house sold on Thursday, after Harcourts disclosed her findings at the auction. She has yet to claim her deposit back.

In MacDonald's case, discrepancies included an upstairs deck that her architect said was "structurally unsound", and a borer problem that required flooring and joints to be replaced.

"I sent the agent an email saying I'm not going to bid for the house, I'm really disappointed at the building report," she said.

"It's at best inaccurate, and at worst misleading and dangerous."

She asked the Harcourts agent to disclose what she had found to the buyers at auction. 

She did not know whether the agent did so, but said that "judging by the amount it went for", she had her doubts.

Harcourts did not want to discuss MacDonald's case, but Wellington agency co-owner Marty Scott said its agents now encouraged vendors to provide a builder's report, and it was becoming "quite the norm" in about 75 per cent of house sales.

It solved a problem for new home-buyers who could not afford to get a builder's report every time they wanted to make an offer.

In most cases, the vendor-provided reports were trustworthy, he said.

Balancing buyers' and sellers' motives could be a "pretty challenging line on which to walk".

"You can appreciate that, in some situations, there can be mischief-making by purchasers.

"To that end, for us to disclose, we would need to see a copy of the second report and we have every right, otherwise there's a risk of harming vendors' interests by transmitting information which is not verified and to all intents and purposes is hearsay."


Consumer NZ chief executive Sue Chetwin warned that, as a general rule, buyers could not rely on builders' reports provided by either agents or sellers.

"You don't have a contract with the person who wrote that report, so by and large you should always commission your own report," she said.

MacDonald and the other woman should complain to Harcourts about the marketing of the houses in question. "And if they think they have a valid complaint, they should move to the Real Estate Agents Authority."

Authority chief executive Kevin Lampen-Smith said he was was working with the industry to establish regulated standards.

"There is a willingness, but it is a fractured industry. A lot of people can pick up a hammer and say they are doing pre-purchase inspections."

He advised that people should always get their own inspections done, but he acknowledged that, in the current hot property market, people could end up paying between $400 and $1500 for an inspection, only to miss out on the purchase.



Remember - anybody can call themselves a house inspector, they do not have to be a builder or have ever worked in the building industry, they could be here one minute and gone the next leaving you with problems they have not picked up because they are simply not up to the job - if you rely on a building report, you need to know they are a company or inspector you can trust, they have a good reputation and they stand by their reports and have Professional Indeminty insurance to protect you.

With WHATS UP HOUSE INSPECTIONS you would get exactly the same report whether you are the purchaser or the vendor - what we put in our reports is fact.

All our Inspectors are either BOINZ Accredited Building Surveyors or LBP's.

We tell vendors when they get a marketing report that we will not help them hide anything. The purpose of getting a MARKETING report or PRE-SALE report from WHATS UP HOUSE INSPECTIONS is to get everything out in the open and allow the vendor to price their house accordingly or fix what we have found prior to putting their property on the market, thus gaining a higher price. This also speeds up the sale process for everyone involved as there are no hidden problems found at the last minute.

All our Inspectors have their own PROFESSIONAL INDEMNITY INSURANCE.

Call us now for a free no obligation quote - see the difference for yourself -       

0800 80 80 45