Property inspections and reports
To avoid problems and extra costs later on, you should know as much as you can about the condition of a property before you buy. Besides inspecting the property yourself, you can also arrange for property inspection reports, such as a building inspection report.
As a prospective buyer, when you ask for a contract of sale, the agent must inform you about previous property inspection reports that have been commissioned. You might be able to negotiate a cheaper price to repurchase a report.
Property viewings usually last half an hour to an hour. Use this time to do the following checks:
- Check that windows and doors can open easily and don’t get caught in their frames.
- Check for damp or mould along skirting boards, walls and ceilings. Be cautious of paint jobs used to cover up mould.
- Check for sagging ceilings or buckling walls.
- Lift up carpet and check for rotting floorboards or damp.
- Try all taps and check how long it takes for hot water to come through.
- Flush the toilet to check for a running cistern.
- Look under sinks and give the plumbing a gentle shake to test sturdiness. Also look for rust and other damage to the pipes.
- Review the hot water system for size and age, and check for damp in all wet areas.
- Try light switches and look at the fuse box to evaluate circuitry age and see if there is an Earth Leakage Safety Switch.
- Look at the general state of the roof, guttering and drain pipes.
- Inspect exterior walls for cracks and other defects.
- Ask if the home has an energy efficiency rating.
- While in different parts of the property, listen out to gauge noise levels. It is a good idea to test the noise levels around the property at different times of day.
- What does the property smell like? Are there strong smells from nearby restaurants or waste treatment plants?
What is a pre-purchase property inspection report?
A building inspection is just one check you can get done before buying a property. It is sometimes referred to as a ‘standard property report’.
The building inspection report is a written account of the property’s condition. It will include any significant building defects or problems such as rising damp, movement in the walls (cracking), safety hazards or a faulty roof. It is usually carried out before you exchange sale contracts so you can identify problems which, if left unchecked, could prove costly to repair.
Why do I need a building inspection report?
Benefits of getting a building inspection report done before buying a property are:
- knowing in advance what the problems are
- using the information to negotiate a lower price for the property ie. you may have to pay to repair some of the problems
- gaining specialist advice about any major problems and how they will affect the property over time.
Choosing the right person to inspect the property
Always use a suitably qualified person such as a licensed builder, a surveyor or an architect to provide a professional building inspection report of the property. These professions should see through any cosmetic improvements covering up faults that might otherwise be missed by an untrained eye.
A professional person will ensure that the format and content of the report complies with the relevant Australian Standard. Ensure that the person you choose has adequate insurance cover, particularly for professional indemnity.
Contents of the report
The report’s format, detail and cost will depend on the type of property and the process used by the consultant or organisation to prepare it.
There is an Australian Standard that pre-purchase building inspection reports must comply with, but this does not include style or content.
Strata schemes and company title properties
With strata scheme and company title properties, the building inspector will normally only inspect and assess the condition of the interior and immediate exterior of the unit. If you want the consultant to inspect other common property areas you will need to request a ‘special–purpose’ property report.
Most properties will have minor defects such as blemishes, corrosion, cracking, weathering, general deterioration, and unevenness and physical damage to materials and finishes. If you want the consultant to report on minor defects and imperfections you will need to ask for a ‘special–purpose’ property report.
Factors affecting the report
Certain conditions will affect the final report including:
- problems difficult to detect due to weather or other conditions such as rising damp and leaks
- the information you provide to the consultant
- the specific areas of the consultant’s ‘expertise’ as specified in the report
- problems that may have been deliberately covered up to make an area appear problem free.
Using the report for other purposes
A building inspection report should not be used as a certificate of compliance for any law, warranty or insurance policy against future problems. It is also not intended to estimate the cost of fixing problems, for which a ‘special-purpose’ property report is required instead.
Ordering a report
Most consultants need a minimum of 2–3 days notice to do a building inspection. You should get the vendor’s permission to have the property inspected as early in the sale negotiations as possible. This will help you decide if the property is worth buying. There may be little point in spending money on conveyancing until you know the condition of the property.
Inspections done during the cooling-off period
When you buy a property in NSW, there is a five business day cooling–off period after you have exchanged contracts. During this period, you may get out of sale as long as you give written notice. The cooling–off period starts as soon as you exchange and ends at 5pm on the fifth business day.
A cooling–off period does not apply if you buy a property at auction or exchange contracts on the same day as the auction after it is passed in. Always check with your solicitor or licensed conveyancer that you have a cooling-off period, and have the process explained to you.
To get a building inspection done during the cooling–off period, give the consultant as much notice as possible. They will have to do the inspection, prepare the report and still give you time to decide and potentially withdraw from the contract. If you withdraw, you forfeit 0.25 percent of the purchase price.