Building inspections should be a well-known tool for anyone interested in property development.
But why? Why does everyone keep nagging you to get an inspection before you buy? Why does your real estate agent keep saying to consider getting a professional to look over your property before you sell it? What is so important about this particular step in the property trade process?
Did you know that Archicentre estimates that 80 per cent of property transactions take place without a building inspection taking place? That is an enormous potential number of buyers quite happily shifting a lot of capital into something that could end up being a lemon.
As a buyer, it is important to ensure that you always get the property checked over by a professional before deciding to buy. Certain property problems will be obvious, such as rising damp or scratched paint, but more sinister problems can lurk in places that you might not expect. According to Archicentre, some of the most expensive problems to erase are in the plumbing ($10,000 to $15,000), wiring ($5,000 to $10,000) and stumping ($6,000 to $10,000).
Imagine if you had foregone an inspection and discovered you had all of the problems above to fix? If you had bought real estate with a house in outer Melbourne for the median price reported by the Real Estate Institute of Victoria ($837,000), these repairs could amount to approximately 5 per cent of the property price – a full quarter of the typical deposit.
However, just because you’ve found issues with a house for sale doesn’t mean you should just pass on it. Your Building Inspection describes how knowing about these issues can allow you to negotiate a lower price with the vendor: asking for the potential cost of repairs to be deducted from the asking price is quite reasonable.
However, sellers or landlords should also be considering building inspections for their properties. It’s all about knowing where you can improve the property, or where you can expect problems to appear in the future.
The ability to hold up a building report and say “here are the known issues, here’s how we are fixing them” will go a long way to build trust with your buyers and tenants, and people may be more willing to make a purchase or sign a lease if everything is transparent.
For more property tips and tricks, speak to your local real estate agent