Can You Rely On Building & Pest Inspections?
In This Week's How's The Market | Edition 55
Can You Rely On Building & Pest Inspections?
The Investor Sell-Off Is Real
The Biggest Walk-In Robe I Have Ever Seen
Can You Rely On Building & Pest Inspections?
This week's HTM might be a bit more of a controversial one, though I want to discuss the effectiveness and shortcomings of building and pest inspections.
First and foremost, this article is in no way suggesting that you should not get a building and pest inspection done prior to purchasing a home.
As buyer’s agents, we insist in the vast majority of cases on completing B&P inspections prior to the purchase of every home or making our offers subject to.
Though, recently I’ve heard of a few alarming stories from buyers and agents (see the In The Media piece) regarding the quality of inspectors out there which has inspired me to write this article.
Firstly, it’s important to point out that not every building inspector is the same. And many will look at and categorise defects differently to one another.
An issue one building inspector may class as a minor defect could be classed as a major structural building defect to the other.
We have been in situations before where we have received a building report that comes back with major structural defects and the vendor has got a report completed themselves from a different inspector that comes back with no major structural defects.
For this reason, it is so important that you look into and qualify B&P inspectors to make sure that they are experts at what they do. Check their licenses and certifications and ask about their history in the building industry to make sure that your inspector knows what they’re looking at.
You would rather an inspector that is more thorough than not, though they also need to be able to communicate effectively as they can sometimes kill deals by providing 150-page reports to unsuspecting buyers that freaks them out. When if the buyer just called them up and asked if they would still buy the property, oftentimes the inspector would say yes and provide advice on what should be fixed first.
Secondly and most importantly. Real estate agents are very well aware of the above fact.
I have had a real estate agent tell me that many agents in their office will often go to a certain one or two dodgy inspectors when they need a B&P report to come back with no major structural defects.
They will get this report done prior to the campaign and then offer this up for free to interested buyers to help them sell the property and tell the buyers they’re doing them a favour to help save them the $500 or so dollars it costs for a report.
For this reason, we recommend that you should always get your own report done from an inspector that you find and isn’t recommended by the real estate agent. If a certain inspector is friends with a real estate agent and gets lots of work from them, they may favour the report to the vendor which is a conflict of interest.
If there are major structural issues, it can cost you a lot more than what it costs to get a report done prior to purchasing a property.
If you are looking for good building and pest inspectors, feel free to reach out to us and we can share our contacts.
What The Agents Are Saying
The investor sell-off is real.
Agents are starting to get more listings and vendors are becoming more confident in the marketplace.
With so few properties on the market right now and many properties getting great results there is a good reason and opportunity for vendors to capitalize on the marketplace.
As people are now beginning to feel the effects of the interest rate rises, agents are seeing a sharp spike in investment properties that are coming onto the market.
Agents have also reported that downsizers are a big market at the moment, selling houses and moving into smaller apartments and units in similar areas.
In inner Melbourne, villa units are hot property and a rarity for agents as so many downsizers and first home buyers are trying to snatch them up.
The Wow Factor!
23-25 Munday Street, Torquay, Vic 3228
One of the biggest walk-in robes I have ever seen. Check out the floor plan!
Plus check out the yoga room and luxurious design of this beautiful home in Torquay.
Price Guide: $7,500,000-$7,700,000
In The Media
Second inspection reveals the $700k house Erika wanted to buy was 'better suited to demolition'
In this instance, the agent provided the buyer with an inspection report conducted by an inspector that the vendor commissioned.
This report stated the property passed and that it was ‘ready to go’ with ‘no major issues’.
Luckily, the buyer decided to get a report done of her own to compare.
The second report that was completed and commissioned from the buyer found instances of asbestos, mould contamination and a possible termite infestation with major structural defects amounting to over $100,000.
This is a real-life example of why you need to be careful when reviewing properties and taking reports or recommendations into account from parties with conflicting interests.
Final Thoughts
Whilst there is a little more doom and gloom in this week’s HTM, don’t feel as though all inspectors and real estate agents are dodgy. Most of them are great! Though you need to act as if all are untrustworthy when negotiating a deal in order to protect your own interests.
Thanks for reading this far!
We value feedback and if you have any suggestions on what you would like covered in the future please email me at tristan@tomii.com.au
Happy Buying!
Note: This is general advice and does not take into consideration your objectives, situations or needs. Please consider if this advice is suitable for you and your circumstances and speak to a professional before making any financial decisions.
