Originally Posted by
Super_BQ
Having just purchased a home in Chch, I can share some real issues about buying such "as is, where is" properties. The real issue comes down to being "insurable". I Can't stress enough about this requirement because the banks simply won't mortgage on such homes if they can not be insured. You will find that the banks use their own building inspectors (as the industry has proven private 3rd parties are not reliable enough and often can pass on a risky asset as being worthy when in fact they are really not). So if you go on to buy a listed house, your 1st bet should be to consult with the bank because they have the final say ON the DWELLING.
The As Is Where Is usually applies to both land and dwelling. Banks aren't usually interesting in lending without a capital asset on the land or they're very cautious on land that is TC3. That's because the cost to meet the new requirement of building renders the mortgage underwater. I know for a fact TC3 builds with lots of land remediation can cost at least 1/2 the budget of building the house. So if you budget $500K for the construction, you can easily spend $250K just on land remediation and foundation / slab works, before you get to see what is part of the house like the timber framing. But budgeting the cost is 1 thing, trying to get a building consent is entirely another ; ie where a previous owner may of failed to get a building consent, it also means the same rules will apply to the new owner of the land. You really really need to do your due diligence.
Keep in mind, any time the property changes hands, so does the insurance and this is the difficult part. Insurers in NZ require a check-list where they expect a building inspectors to fill out (they won't accept a building report by a 3rd party but specifically, want their OWN forms to be filled out) which talks in relations to EQC damage. The forms are clever in asking about the contour of the land if there are any retaining walls, close to water ways, etc so insurers get a better idea of the risk matrix. The end result is houses that are risky will get wacked with the highest premium. Houses that are modern to current code get the lower premium. You can tell I chose the latter.