New Home Inspections
You don’t need to be told of the significance of your investment in a new home – after all, you are the one who is pounding the pavement looking for the right property, saving every spare cent and comparing all of the best home loans. Therefore, to make sure all of your hard work isn’t jeopardised by hidden nasties in your home, organise for comprehensive building inspections before you commit to a new home.
What is a pre-purchase inspection and report?
Pre-purchase property inspections are an integral part of the buying process, but not one the real estate agent will highlight for you. a pre-purchase property inspection will reveal if there are any structural issues, any building code violations and whether there are any safety or repair issues which will need to be addressed, and could become costly down the track.
Your building inspector will then put all of the information they have gained from inspecting the property you are interested in, into a pre-purchase report so that you can decide if you want to go ahead with the sale, if you can use any issues as bargaining power to reduce the purchase price, or if you want to walk away from a home which just has too many issues.
A pre-purchase building inspection will include a superficial assessment of any pest problems, but you will need to have a specialised pest inspector look at your property. Some lenders will even require a pre-purchase and pest inspection to be completed before approving finance.
What should be included in a pre-purchase inspection?
You and your family have your list of fixtures, features and favourites that you are looking for when you consider a property for sale, and you’ll also probably be able to spot whether the gutters are rusted or the doors don’t close properly. However, home owners can also be very tricky about covering up issues so a newly painted room could have been done to modernise the look or cover up mould, and only a building inspector can tell you which.
Therefore, expect your pre-purchase home inspection to include:
- Varying fees. The cost of a building inspection will depend on the size, type and age of your property and so can range from $300 to $1,000 while a separate pest inspection can cost around $100 in addition.
- A comprehensive report. You can often choose to have your pre-purchase report posted or emailed to you, and you should receive the finished report within two days. This gives you plenty of time within a cooling off period to make your decision based on the information and recommendations in the report.
- Experienced and qualified inspectors. Building inspectors completing your pre-purchase property inspections must be licensed and fully qualified so they are informed of current building codes and standards.
- Use of the latest technology to uncover and identify the cause of: cracks in the interior and exterior walls; structural defects; asbestos use and safety; plumbing and electrical faults; damp and mould caused by poor ventilation; drainage issues; conditions of fixtures and fittings.
Your pest inspection will include an assessment and search for borers and termites and the inspector’s report will include details of any damage, the costs to remove the pests, and any ongoing issues which may be caused by the damage. Your conveyancer should also be able to organise for strata title inspections to find out about strata schemes, levies and insurance. Plus you’ll also need a land property survey to make sure the property is built within the boundaries of the block, and within council approval.
Importance of pre-purchase property inspections
When you go to buy a car, your purchase is often protected under the manufacturer or the dealer’s warranty if there is an issue with the vehicle. However, when you purchase a new or existing home, it is up to you to make sure you are getting what you pay for – and nothing less (or more in the case of pests) – and there are no regulations which require the vendor or the real estate agent to make sure the property they are selling is structurally sound.
That is why it is so important to organise for pre-purchase inspections before you buy a property, because you should treat a real estate agent as you would any other salesperson, in that they tell you what you want to hear, and not about any problems there may be with the product. A pre-purchase property inspection is the powerful knowledge you need before you take the next final step, and in the case of an auction, where there is no cooling off period, it is important to go into the bidding with all of the information.
If you are making an offer on a private sale you can wait to conduct a building inspection until your offer has been accepted. This is because in most states – except Western Australia – there is a cooling off period after the exchange of contracts if you change your mind about the property. Even though you have signed the contract and provided a deposit – usually 10% – you are often signing subject to building inspections, but your lawyer or conveyancer will look out for your interests here.
During the cooling off period, which is usually five days, it is your chance to organise building inspections, and this is why you need an inspector who can provide you with a pre-purchase report within a two day turn around. If your inspection report uncovers something you don’t want to deal with in your new home, you can change your mind.
To cancel your purchase contract because of the results of a building inspection you will need to write a letter to the vendor and deliver it before the end of the cooling off period. In most cases you will be refunded your deposit but in some states a fee applies; in New South Wales for example the fee is 0.25% of the purchase price. However, this is still much less than you would pay in the long run if you bought a structurally unsound, pest infested home.
When should you organise an inspection?
If you are buying at auction you don’t have the luxury of a cooling off period because once your bid is accepted by the vendor, you have bought the house. Therefore, if you are purchasing at auction you will need to organise for an inspection prior to the auction date.
Unfortunately if you are looking at several properties which are all up for auction, you can find yourself spending thousands of dollars on inspections for properties which reach bids well outside of your price range. This is because real estate agents will set a price range when advertising auctions which reflect their belief of the value, as well as give bidders hope that the bidding will be within their budget to attract more potential buyers to the auction.
If you are looking at a number of properties which are up for auction, don’t get carried away with your building inspections on a property on which you may not be able to put in an offer. Instead, keep in mind the other costs of purchasing a new home including stamp duty, loan application fees and legal fees. At the same time, not having a property inspected is a significant risk, and there are property inspectors who specialise in auction inspections and can offer services such as:
- A comprehensive pre-sale inspection to uncover any pest or structural issues. Even at auction you can still raise issues uncovered in a building inspection to lower the purchase price.
- An email of the pre-purchase report. This can be especially useful if you are an offsite bidder but want to remain informed.
- Insurance against future building issues. If your inspector misses a problem with the property which reveals itself down the track, you will be covered by the inspectors indemnity insurance as they have failed to complete their job correctly. Just the act of organising for an inspection with a fully licensed and insured inspector can protect your purchase.
When you buy a new home you will be making a decision based on the things you can see – the proximity to schools and shops, the size of the rooms and the orientation of the windows. However, as important as it is to find a property which you like the look and feel of, you also need to make sure that the parts of the property you can’t see are as appealing as well. This is why you need to be sure to organise for a comprehensive pre-purchase property inspection before you buy, because no matter how rushed you feel, no matter how fast the hammer is coming down, once the ownership of the property passes to you, any potential problems become yours too. To find out more about new home inspections, or to find a property inspector which specialises in your area, or your style of home, contact Home Loan Finder now.
Related posts:
- Pre-purchase inspection checklist
- I’ve Found a Home, Now What?
- How to Secure a Home Purchase Deal
- Do it yourself home inspection
- Home Inspection Forms
- Property Inspection Services – A Complete Guide
- How to Choose an Independent Building Inspector
- The Home Buying Process Steps Explained
- Construction Inspector
- What to Look for During a Home Inspection
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