If you’ve found a place and put in an offer that has been accepted, then one of the first things you’re going to want to do is book in a building and pest inspection. Generally, these two inspections aren’t performed by the same contractor, so that’s at least two phone calls you’re going to have to make.
To say that hiring professionals to inspect a property before you buy is a good idea is an understatement! Pest infestations can literally be swept under the rug by wily vendors wanting a maximum sale price and potential structural issues are literally hidden in the walls, floors, and ceiling.
Building and pest inspections will give you a thorough report that may identify any of the following, should they be present:
It’s not just old houses and apartments that can have this issue, even new builds can have dodgy plumbing due to subpar contractors and developers trying to push projects across the line. No matter what you’re buying, you’re going to want to know well ahead of time if you’re up for an expensive plumbing overhaul in the future.
Just like plumbing, faulty wiring or anything electrical that’s problematic and contained within the structure of the property is going to be pricey to fix, so make sure it’s the current owners problem to solve, not yours.
Beware the black mould, beware the rising damp! If the property has any places where water is able to gather, either or both of these issues may become a problem. Moulds can be as detrimental to human health as they are to a property. Drainage issues can also literally overflow from a property and onto the neighbours’. So if you want to avoid double the bills and foster a good relationship with those living next door, you’ll want to know if there’s likely to be a problem.
We’re not talking about a few spiders here, we’re talking about things that can actually destroy the property, like termites! While one mouse might give off a nice Beatrix Potter vibe, a rodent infestation has the potential to render a home uninhabitable — well, for us humans at least.
Having the roof blow off in turbulent weather is a legitimate concern in many parts of Australia, so before you buy, you’re gonna wanna make sure that sucker is firmly screwed down and, most importantly, watertight. Same applies to mystery or hidden leaks that may not visible on a walkthrough of the property. If you’ve failed to do due diligence with checks like these, the upkeep on a dodgy roof may even void your home and contents insurance in the event of a future incident.
Foundation and framing issues, improper modifications, and poor construction practices can all lead to issues that are not only costly to replace but, in some cases, impossible to fix. In extreme circumstances, this can lead to portions of the property requiring demolition and rebuilding. An inspection will identify these, empowering you with the knowledge you need to make a decision.
With one in three Australian homes containing asbestos, you are going to want to know ahead of time if the property you’re about to buy puts you in that 33%.
All of these issue can be deal breakers for potential buyers if found present in a property, so if an inspection reveals issues like these, how exactly can you use this knowledge to break the deal?
Property contracts need to be drafted initially to include clauses like ‘subject to building and pest inspections.’ Like with so many other particulars, the laws and standards of contracts of sale vary between the states and territories, so never presume your contract is automatically going to contain a clause to cover both a property and a pest inspection. If you have any doubts about the contract you’re being asked to sign, you can always get legal advice from your conveyancer or property solicitor.
With a building clause, for instance, you may be asked to nominate an amount of money that you deem reasonable (for repairs) within the contract. If the building report returns with an indication that any repairs will exceed this amount you nominated, then bingo! You can legally opt out with the building clause in place.
Sometimes it doesn’t need to be that specific. If the property inspection report convinces you not to go ahead with buying the property and you’ve already exchanged contracts, you still have the potential to terminate the contract as stated in the building or pest clause, or if you’re within your cooling-off period.
A building inspection typically takes around 2-3 days to complete but delays can also occur depending on the availability of the inspectors.
Pre-purchase inspection reports, like building and pest inspections, are paid for by the buyers and are separate to any amount you have saved for a deposit, arriving firmly in the FTC (funds to complete) category. Costs vary depending on the location and size of the property, but typically building inspections will ring up anywhere from $500 to $1000, with a little less for a pest inspection, often coming in around $400 to $450.
There are lenders who will require these reports to be completed as part of their loan deals but even if you don’t have a choice, it’s a small price to pay for something that could save you hundreds of thousands of dollars in the future, or even save you from ending up with a dud property.
In short, the answer is yes, it may be possible to negotiate for a reduction in the purchase price if the inspection results provide telling details.
Another avenue when a building or pest report flags issues is that the ‘work’ on the property must be done at the seller’s cost, prior to settlement. These will be assessed case-by-case and it’s important to note that the sellers — even if they’re in the wrong by not disclosing an issue — aren’t obliged to agree to anything and may even refuse to negotiate. Thus, depending on where the breach is, you can just action either the building or pest clause in the contract.
