Information is power when it comes to buying property, so we surround ourselves by experts in all the fields we need: finance, legal, building inspectors, architects, interior designers, property managers and trades people. Getting the right info from the appropriate professional can help you avoid buying a lemon. It can also assist you in knowing all the downsides of a property and this knowledge may be very useful when you are negotiating with an agent. Why are pre-purchase property inspections are so important?
We would only ever buy a pre-purchase property inspections report provided by the vendor or the agent under extreme circumstances – like when we don’t have time to organise our own report because someone else is about to buy the property and we have to move fast! So, in 99.9% of cases we organise a pre-purchase property inspections to be done by our regular licensed inspector. And then we meet him at the end of the inspection to discuss any areas of concern. There have been plenty of times when we have had to get additional advice from specialist trades. I can think of examples where we have had to get particular advice regarding such things as asbestos removal, the health of a large tree, the condition of a retaining wall, the cause of puddles under a house. Water is one of the chief causes of problems with buildings – water will always take the course of least resistance and it wrecks havoc when it goes where it shouldn’t! An unchecked leak, for example, can go undetected for a long time before the damage starts revealing itself, by which time the remedy can be very expensive!
Forewarned is forearmed. Sometimes, when a property is going to auction, other buyers do not do as thorough due diligence as we do. So they go to auction prepared to pay more money than we are for the property and then get hit with a major repair bill within the first couple of years of ownership. We regard that as a bullet dodged and I would always rather pay a few hundred dollars for an inspection than get caught out afterwards. Prevention is better than the cure! But other times, when there is an obvious problem, other buyers can be scared off. If we can uncover the root cause of a problem and know the cost of fixing it, we can be very confident in our negotiations and really use the defects to get the price down.
If you are the only buyer who understands the full extent of the building issues, don’t be afraid to walk away from the property if another, less informed buyer is prepared to pay more than you, or if the vendor simply won’t accept that there is a problem. When advising the agent of the issues, make sure you give them a copy of the relevant section of the inspection report. Back up your claims with hard evidence to show you are not playing games.
Most pre-purchase property inspections will make general reference to plumbing and electrical issues but they are mostly looking at the structure of the house. They will certainly flag where they think expert advice is needed and we recommend getting to the bottom of any problems before you buy the property, not afterwards.
Top 5 questions to ask your building inspector:
- How does the building compares with others of a similar age? We’d love it to be “above average”, but descriptors like “typical” and “average” are not deal breakers in our opinion. Even “below average” can be acceptable – as long as you can address the issues and pay a price that reflects the building’s condition.
- Are there any active pests? We still might buy a property if it had active pests – dependent on the damage done and how quickly they can be eradicated – as long as we can get a good discount on the price!
- Is there evidence of past pest activity that has caused damage but has not been rectified?
- What immediate maintenance issues are there? Sometimes it means getting a specialist in to give detailed advice (plumber, electrician, structural engineer, arborist, etc).
- What ongoing maintenance issues should I be aware of? The report should make mention of all issues, in particular where there is risk of future termite invasion.
Good Deeds buyers tips are intended to be of a general nature. Please contact us for advice that is specific to your individual circumstances. You may also need to get advice from other professionals such as an accountant, mortgage broker, financial planner or solicitor.