Property inspections for beginners
Buying your first home is the biggest purchase you'll ever make, so you really want to make sure there are no major problems with the building. That's why it's important to proceed with a property inspection prior to purchasing the dwelling.
David Hallett, from Archicentre, says property inspections carried out for many people six to 12 months after they have purchased the property can reveal varying problems, from leaky roofs (usually after a severe rainstorm), cracks in plaster work (a telltale sign of a need for restumping), to more extreme cases of termite damage, where repairs can cost from $10,000 to $150,000-plus.
It's vital to get the relevant inspections done before you make an offer. Sure, this may cost you money, but skimping could end up being a very expensive mistake.
"Home buyers should commission a pre-purchase inspection of the building to ensure they are fully aware of any faults and the cost of repairs before making an offer on a property," says Hallett. "This is extremely valuable knowledge when people are negotiating a property purchase, making a property bid or applying for a bank loan.
"Importantly, a pre-purchase inspection can also help avoid expensive unbudgeted repairs in the future, which can drastically reduce capital gain when the property is sold."
A building and a pest inspection are the two main options. A building inspection, which will set you back $300 to $500, can identify such problems as rising damp, roof condition, plumbing and wiring and general structural issues. You will get a written report identifying problems, whether they can be repaired and the likely cost. The main target of a pest inspection - $200 to $300 - is termites. It will look for other creepy-crawlies and give you an estimate of what it will cost to eradicate any pests.
You can get a combined building and pest inspection ($400 to $700). Make sure the inspector has the appropriate expertise to handle both.
Hallett says it's vital to ask and verify whether an inspector is qualified, registered and insured, as well as independent. Does the inspector offer a guarantee on their work? Archicentre, for example, offers a $50,000 guarantee which covers serious structural defects for 12 months from the inspection date.
If something nasty turns up in an inspection, you can choose to walk away - or use it as a negotiating tool to secure a better price or get the vendor to make the appropriate repairs.
If you are buying a strata title property, get a strata report done. Costing $200 to $300, this will contain important information such as a history of repairs, proposed spending, disputes, rules about pets, insurance premiums and the value of what's called the sinking fund (to cover future expenses).
You should get a conveyancer or solicitor to look over the contract and help with the process of buying the home, such as arranging stamp duty payment, checking for outstanding arrears or land tax obligations, discovering if an authority has a vested interest in the land or if a development could affect the property and any information that could be undisclosed, such as an ongoing fence dispute or illegal building work.
This could cost $200 to $500; generally a conveyancer is cheaper than a solicitor. You may also have to pay for "disbursements" such as for a title search, photocopying and registering the mortgage. You can do it yourself but you could miss something important.