What to Inspect Before You Invest in a Property

Sep 07, 2023

MLS Finance

Commercial Investment | First Home Buyers | General | Property Investment | Property Purchase

Buying a home is a big decision. For first-time buyers, making such a large investment can be overwhelming. Especially, if you have no idea what to look for when inspecting a property. You may end up with some unexpected future expenses. So, get the property inspected by a professional before signing a contract of sale.

WHY PROPERTY INSPECTIONS ARE IMPORTANT

Property inspections can identify unsafe renovations and repairs and structural defects. A property inspection can reveal any significant underlying issue a property may have. Ensure that the inspection service you use offers full professional indemnity insurance. This insurance protects you against any problems missed during the inspection.

PROPERTIES BUILT BEFORE THE 1980S

Generally, building inspectors will check all the accessible parts of the property. This includes the building’s interior, exterior, roof, crawl spaces, etc. However, properties constructed before the 1980s contain materials like asbestos cement and lead-based paint. Exposure to these hazardous materials can cause adverse health conditions. Plus, removing them could cost thousands of dollars. Building inspectors will check for visible signs of asbestos. However, the building inspection report will not confirm the presence of loose-fill asbestos. It’s vital to confirm whether the property contains loose-fill asbestos insulation. So, get a licensed asbestos assessor to test it.

TERMITE DAMAGE

Over 100,000 Australian homes suffer from termite attacks each year. In some areas, termites are a known issue. Get a pest inspection done before purchasing a property. Building inspection reports should identify any visual damage caused by termites. It is recommended you get a pest inspection along with the building inspection. “Buyers who do not invest in a pre-purchase inspection are making a big mistake. You could be buying a hell of a lot of problems that you just aren’t aware of.” -Simon Lean, Manager, RentokilRectifying termite damage can end up costing you thousands of dollars. A 2012 study revealed that termites cost Australians a whopping $1.5 billion each year in property damage and treatment. Beware of sellers who try to cover up termite damage. In some cases, they’ll place a large wall unit or a lounge suite in front of the affected area. This obstructs the inspector’s access when performing the inspection. A good inspector will bring this to your attention. You can only assess termite damage through an invasive inspection. It tends to go undetected because the destruction happens within the timber. The pest inspector’s report includes details of any installed termite management system. It will also reveal the materials used for critical structural elements.

RENOVATIONS AND EXTENSIONS

Any illegal alterations become your responsibility once you sign the contract of sale. Your pre-purchase building inspection report may state the building work got approval. Check with your local council to ensure required approvals are in place. Sellers aren’t obligated to disclose unapproved building work to a buyer.“The old adage of ‘Buyer Beware’ still very much applies with illegal building works. Once the contract is signed the buyer inherits these problems.” -Richie Muir, Legal Director of lawlab.Buildings like granny flats or studio flats need council approval. The 1993 Building Act, and Building Regulations 2018 state, all building work requires a building permit unless an exemption exists under the regulations.Building permits protect by ensuring that construction complies with building code. They also help to ensure that the building is safe for occupation. Extensions done without permits usually include the use of cheap materials. Plus, there is the question of unlicensed labour. This may even be the reason for skipping the approval process. You could end up with costly rectification work. The council may issue a demolition order for the unapproved structure. Plus, there’s the issue of trying to resell the property. You could lose out on potential buyers when the time comes. Plus, in the face of survey reports, you might have to drop your price.

COOLING-OFF PERIODS

Even if you already made your deposit and exchanged contracts, you can still walk away. A cooling-off period gives you the freedom to withdraw from the sale contract. The standard contract for buying a home comes with a cooling-off period of 5 business days. There might be a fee for the withdrawal, but that’s usually the only penalty. Cooling-off periods are only applicable for properties sold by private treaty. The upfront costs associated with property inspections can be high. However, purchasing a problem-riddled property can be even more costly in the future. Sellers will share the good points of their property while neglecting crucial points. So due diligence is up to the buyer. You can’t see the future, but it sure helps to prepare for it. MLS have developed strong relationships with various trades required when purchasing a property and are happy to connect you with property inspectors and pest control. We encourage you to make the necessary checks before signing any contracts. An inspection could be the difference between buying your dream home and ending up with a money pit.

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