Don't skip checks when buying a house

You don't have to look far to find news stories about the hot property market. Some houses are being snapped up virtually before they've even hit the market.

I've been to open homes myself lately where the queue of people waiting to get in stretched out the door and the frazzled real estate agent has had to apologise for not having enough brochures on hand.

You can understand then why some buyers get desperate. If you've fallen in love with three or four properties and watched them all sell to someone else, you start to get worried.

What if you never get a place? What if you spend the next five years ordering building report after building report and paying for valuations - only to see the house sell at auction to someone else?

It's these kinds of thoughts that are driving people to skip some of the due diligence that should be involved in buying a property. We are hearing more and more that people are giving it a miss - either because they want to make their offers as appealing as possible, or because they are tired of paying for reports on places they do not end up buying.

But it is so important to make sure you take the appropriate level of care. You're potentially paying many hundreds of thousands of dollars, so you need to be sure that the property you are buying is sound.

You should probably get a building report and a LIM on every property you want to buy, and a meth test wouldn't hurt, either. It might cost you $1200 all up but if it saves you $500,000, it will be worth it every time.

Buying a house is just like any other investment, except that there is often an emotional element involved, too. The best advice is to try to put that emotion to one side.

You wouldn't rush into buying a fortune in shares without asking for the details of the company - and you shouldn't rush to take out a 30-year mortgage without making sure you know what you're buying.

- Jeremy Tauri is an associate at Plus Chartered Accountants.