Expert reveals the dos and don'ts of buying a house

Buying a house may be the Kiwi dream, but if you're not careful, it can become an expensive nightmare.

From leaky roofs, structural problems, insulation issues and unexpected bills, there are plenty of hidden dangers that can come with a new home, says Real Estate Institute CEO Bindi Norwell. 

Norwell told Newshub those issues could end up costing hundreds of thousands of dollars to fix, which is why it is so important to do your homework.

She said putting in extra time to get everything in order is the key to avoiding trouble further down the track. 

Ignoring problems or skipping things to get on the property ladder faster could end in disaster, she warned. 

This is especially true for first home buyers who are taking up a bigger part of the housing market. 

In May, first home buyers borrowed more than investors for the first time since records began in 2014, according to the Reserve Bank. 

Luckily there are some simple steps to make sure your new home isn't a dud. 

Know your budget

Knowing how much money you can realistically spend on a property is something everyone should check before making any offers.

"Make sure you speak to the bank before you purchase, so you know exactly how much you can afford."

Norwell said it is important to stick to a budget and avoid getting carried away, especially at an auction. 

The budget should take into account possible interest rate changes too, she added. 

"With the record low OCR, you need to think about your interest rates in the future too."

Do your due diligence 

While all the budgeting, saving and trekking from open home to open home can be tiring, patience is key when it comes to buying, Norwell said. 

"There's a reason your grandmother told you 'patience is a virtue'. Even if you're sick of attending open homes or are desperate to get a foot on the market, take your time.

"Go to a number of open homes to get a feel for the sorts of things you're looking for in your new home."

She said potential buyers should also research the neighbourhood and property values of other homes in the area. 

"Talk to people who already live in the neighbourhood to find out what they do and don't like."

She said if something isn't right with the property, it could cause frustration for years to come, so doing your due diligence will pay off. 

Norwell said talking to people who live in the area is a great way to get to know a neighbourhood.
Norwell said talking to people who live in the area is a great way to get to know a neighbourhood. Photo credit: Getty Images.

Pay attention to timing 

Buying a house when the time is right for you and your family is a much better idea than trying to "time the market," she said. 

"Buy when you need to move into a new school zone or have another family member on the way. 

"Even experienced property investors get it wrong from time to time, so if you're relatively new to the market, it could be easy to get your timing wrong."

Get a building inspection before you buy 

While many houses will already have a building inspection completed when they're put on sale, Norwell said if it doesn't, it's crucial to get one. 

If you're making an offer on a house or applying through a tender putting a building inspection as a condition of your offer will ensure there are no unpleasant surprises. 

If you're buying a house at an auction and it doesn't have a report, it's important to get one, she said.

"While it might be frustrating to spend $500 for a building inspection for a property you miss out on at auction, if you try to save on this cost upfront it could end up costing you hundreds of thousands of dollars in the long run."

Focus on the big picture

Instead of worrying about the small issues, buyers should focus on changing things that could add value to the property, like upgrading fixtures and fittings.

"Don't sweat the small stuff that can be fixed easily like the paint being the 'wrong' colour'," she said. 

Norwell said to focus on repairs that will improve the price of the house.
Norwell said to focus on repairs that will improve the price of the house. Photo credit: Getty Images.

Know your property types

Norwell said people need to make sure they're aware of the property type and never assume that it is easy to change. 

She said anyone buying an apartment should keep in mind body corporate costs and always read the rules, so there are no surprises like pets not being allowed. 

Looking into the long term maintenance plan is also an important thing to check off. 

Don't forget the extras

When it comes to figuring out your budget, it's essential to add in all the extra costs like rates, insurance and maintenance before you buy, she said. 

Hidden costs can throw a budget off and cause problems further down the track.

Get legal advice

One of the most important things to do before buying a house is to get legal advice.

Norwell said making sure you have consulted a lawyer and that you follow the lawyer's advice is key.

Ignoring legal advice can end up being very costly in the long run, she warned. 

For sellers

For those selling their homes, using a trusted agent is always a good idea, she said.  

"An agent can help you achieve a premium for your property overselling yourself – even once the commission is taken into account."

Norwell said another common mistake is over capitalising on renovations before selling.