Hot topic: Getting a building and pest inspection
Today, Melissa talks about one of the best things you can do before buying a house to manage your risk: getting a building and pest inspection.
Melissa is an experienced conveyancing solicitor in Melbourne with a passion for supporting, helping and educating clients to successfully buy and sell property in Victoria with knowledge and confidence.
In today's episode, Melissa delves into the ins and outs that you need to know when it comes to getting a building and pest inspection report, including the best time to get it, the important benefits of an inspection report, who can legally perform the inspection and more.
Plus, Melissa talks about other checks you can do help manage your risk before buying property in Victoria.
Introduction to building and pest inspections
There are properties out there that you look at and think, “gee, that house is really pretty. I can see my kids growing up there” or “that apartment looks really stylish”.
But what if there’s something wrong with it?
How would you know if the new paint job you’re seeing in a 5 year old apartment is a result of water ingress emanating from dodgy plumbing in the building?
Or how do you know if behind the walls of a house there’s termites crawling everywhere?
Eek! It’s enough to make you shiver!
That’s where a building and pest inspection comes in handy.
A qualified inspector will know exactly what to look for and see through any cosmetic improvements that cover up defects or other nasties.
In this podcast I’m going to explain:
- The benefits of getting a building and pest inspection report
- The best time to get a building a pest inspection done and why
- Ways to arrange a building and pest inspection
- The average price of a building and pest inspection report
- Who can actually perform a building and pest inspection
- What's in a building and pest inspection
- Other checks you can do before buying in Victoria.
When is the best time to get a building and pest inspection?
I always recommend getting a building and pest inspection done before buying a property.
With that in mind, you might be thinking, “well, what if the seller doesn’t accept my offer? I’ve wasted my money on a property that I probably won’t get!”
And I couldn’t agree more! So that’s why I recommend ensuring the seller has accepted or is open to your offer before getting a building and pest inspection done.
So why is it important to get a building and pest inspection done before buying?
For two key reasons.
The first is, it makes for a great bargaining tool to determine the price you would be prepared to offer based on the structural integrity of the property or the cost to rectify any defects.
The second reason is, the building and pest inspection report provides clear evidence of what the condition of the property was like at the beginning of the transaction. So that if any damage happens to the property before settlement:
- you can compare the damage to the original condition in the report to prove that the condition has changed; and
- because you’ve been able to prove the change in the condition, you can require the seller to fix the damage before settlement, unless the contract specifies otherwise.
Now the reality is, it can be a hot market out there which means you might not have the time to arrange a building and pest inspection after your offer is accepted by the seller.
If you find yourself in this boat, the next best approach is to negotiate for the contract of sale to be made conditional upon getting a building and pest inspection report.
I recommend that the contract allow you:
- at least 14 days from the sale date to get a building and pest inspection report; and
- to end the contract if the report discloses major structural defects or major pest infestation.
How do you negotiate to make the contract conditional upon getting a building and pest inspection report?
The most cost-effective approach I see people take is:
- asking the agent to draft or select a clause in the contract to make the contract conditional upon a building and pest inspection report; and
- reviewing the contract before signing to ensure the clause specifies that they have 14 days to get the report and can end the contract if the report discloses major structural defects or major pest infestation.
However, I don’t recommend taking that approach to making the contract conditional upon getting a building and pest inspection report.
Agent’s are experienced in selling property, not drafting legal terms in a contract.
I suggest the following approach:
- have your conveyancing lawyer in Victoria carefully draft the clause to ensure it is constructed properly and clearly sets out your rights if the report discloses any major defects or pest infestation.
- your conveyancing lawyer can then negotiate with the seller’s conveyancer to insert the clause into the contract to make the contract conditional upon a building and pest inspection report.
- if the seller is agreeable, your conveyancing lawyer will get an updated contract from the seller’s conveyancer with contains the clause.
There is no guarantee that a seller will agree to make a contract conditional upon getting a building and pest inspection. Hence why it’s important to get it done before you buy.
How do you arrange a building and pest inspection?
You have a couple of options.
You can arrange a building and pest inspection yourself by:
- doing a Google search and shopping around for a building and pest inspector in Victoria; and
- when you have found your preferred inspector, engaging them and arranging with the local selling agent and the inspector a preferred time and date for the inspection.
Otherwise, if you don’t feel like spending the time to shop around and need the job done, we can get it done for you.
If you engage us to arrange the building and pest inspection, we’ll contact our third party provider to have an inspector contact you and the local real estate agent to arrange a time and date to perform the inspection.
How much does a building and pest inspection cost?
An inspector’s fee is small compared to the cost of buying a property that needs A LOT of unforeseen repairs.
The fee is assessed based on the size of the Property. The smaller the property, the lower the cost.
However, as a general guide, I’ve seen inspectors charge around $400.00 to $600.00 for an inspection of a property in metropolitan areas with 4 to 5 bedrooms and 2 bathrooms.
If the property is located closer into the city, or if you’ve bought an apartment and there’s over 100 lots in the building, extra charges can apply.
When you engage us to arrange the inspection, the quote by the inspector will be confirmed before the order is processed.
We’ll then provide to you the quote to accept before proceeding with the building inspection.
Who can perform a building inspection?
A building inspector needs to be properly qualified and insured.
Ideally, they should hold a diploma in building and construction or surveying.
And they should have professional indemnity insurance in place in case they miss a problem that needs to be fixed.
That way, you can make a claim under their insurance policy for any loss suffered if the inspection report did not correctly identify a problem with the property.
The inspector should also be experienced. Look for a registered, qualified and trained builder or engineer to perform the inspection of the property.
The next point to discuss is, what does an inspection report look like?
A written inspection report will list things like:
- any defects in the property or signs of any structural problems, such as:
- large cracks in the walls which could be evidence of house sinking, which may require restumping
- mould or pools of water on the ceiling or walls that may be evidence of excessive moisture which may be caused by water ingress coming in from somewhere else; or
- blisters or bubbles on the paintwork which could indicate termite activity
- if those defects can be urgently rectified
- how much the repairs will likely cost.
It is important to ask the inspector to include these points into the report before engaging them, to ensure you get a comprehensive report that provides the most value for money.
What other checks are important before buying a property?
If you find a property built before 1990, Consumer Affairs Victoria suggests that you get an asbestos assessment done before you buy.
So I recommend visiting the Asbestos Victoria website at www.asbestos.vic.gov.au for more information to how to arrange an assessment.
If there are renovations or extensions done in the last 10 years, you should also call the Council and speak to the building and planning department to confirm if any building permits or certificates of final inspection or occupancy permits were obtained for the work.
Reason being, you will be liable for any illegal work from the sale date.
That's a scary outlook for anyone.
Hence why it's important to make the call to the Council before you buy a property in Victoria.
If you want to know whether the property has any non-compliant combustible cladding, you should call the Council, the Victorian Building Authority and the Owners Corporation (if any) to confirm if:
- any investigations have been launched into non-compliant combustible cladding
- if any building notices or orders have been issued requiring the rectification of the cladding to make it compliant
- if the owners corporation is expecting to raise additional levies in the future to fund the cost of rectification or to issue proceedings against the original contractor hired to perform the cladding.
If you engage us to perform a comprehensive contract review, we will advise you on all the necessary checks you should do before buying a property in Victoria.
I hope you’ve enjoyed learning about the importance of arranging a building and pest inspection when buying your first home. Or any home in fact.
As you step into your first home buying journey, I hope this episode has helped you gain that little bit more confidence and knowledge on what you can do to help you decide on buying a property that’s right for you.
I also hope that you can reflect upon this episode and feel supported by a local conveyancing lawyer in Melbourne that has your back.
I wish you the best of luck on your property journey.
For more information, please listen to the full podcast!
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