What everyone should know about property inspections and why it’s an important task to complete before committing to a purchase.
Buying a property is one of the biggest financial decisions you'll make in your lifetime, especially given the inflated property prices in many of Australia's capital cities.
So before you sign any contracts, you want to be sure you’re buying a property that is structurally sound, doesn’t have any pest problems, and has generally been maintained. To do that, there are several inspections you should carry out during the purchase process to ensure that you make the right decision.
It’s important to note that all these costs can add up. To estimate the costs of buying your property, you can use the property buying calculator for an indication.
Skipping on pre-purchase inspections may save time and money in the short term, but if problems crop up later on, you'll have the financial responsibility to cover repairs and maintenance.
Inspecting the property may give you leverage when negotiating a price because it counts against the value of the property.
In all cases, inspections must be done by a qualified and experienced professional.
Personal inspection
The first chance you get to inspect a property is at an open-house viewing. Open inspections give potential buyers a chance to cast their eye over the property and see what they think. They usually last for around half an hour and offer a great opportunity for you to get a general feel for the overall quality and features of a property.
If you can, take someone else along to help you inspect a property because having a second perspective can help you pick out potential issues and faults you may otherwise overlook.
What does a personal inspection involve?
Wandering through a property with several other buyers allows you to get an overall feel for the property, including what you like about it and what you don’t.
If you like the feel of a property, use this inspection time to take a closer look. You can:
- Check that windows and doors open easily. Do they get stuck on the hinge? Or do they open and close easily?
- Look for any signs of dampness or mould on walls and ceilings.
- Examine the structural integrity of the property – check for sagging ceilings or walls that may be buckling.
- Check the taps to see if they run.
- Look under sinks to check the age and condition of the plumbing.
- Look for rotting floorboards hidden under carpet or rugs.
- Try all the light switches and take a look inside the fuse box to determine the age of the circuitry.
- Look for defects in exterior walls, the roof and gutters.
- Use all your senses to inspect a property. Is there significant noise coming from a major road nearby? Is there a bad smell from a nearby factory or sewage treatment plant?
Building inspections
Building inspection
While a personal inspection can tell you a whole lot about a property, if you’re interested in a property and are considering buying it, it’s essential that you get an expert to assess the property. This is known as a building inspection report or a standard property report.
A professional building inspection report can be completed by a licensed builder, a surveyor or an architect. The expert you hire to complete the report will inspect the property for any structural defects or other issues, for example rising damp, that may be missed by the untrained eye. The inspector will ensure that the building conforms to Australian building code.
Qualified inspectors can look beyond cosmetic repairs or improvements, and identify unsafe renovations and repairs, thus minimising the issues of ‘unforeseen damages’ down the road. Knowing the ‘cons’ of a property can also help you negotiate for a lower price.
Building inspections are usually carried out before the exchange of contracts, allowing you to identify problems that could be expensive to repair in the future. If the building inspection report reveals significant issues with the property, you can withdraw your offer.
It’s recommended that you use a third-party professional, rather than one suggested or provided by the seller.
What does a building inspection involve?
A professional building inspector will visually inspect all areas of the property for signs of structural defects or expensive problems. The inspector will cast their eye over every part of the property they can access, including:
- Building interior. From cracks in the walls to problems with electrical wiring, doors that won’t shut and broken windows, the inspector will look at every aspect of the property’s interior.
- Building exterior. The inspector will examine the construction of the property for any defects.
- Building roof. Loose or damaged tiles or roofing, damaged gutters and downpipes will be included in the report.
- Roof and under-floor spaces. If these areas can be accessed, the inspector will check them for any structural damage.
- The property site. The building inspection report will also include details of the condition of garages, carports, garden sheds, retaining walls, separate toilets or laundries, fencing, surface water drainage, driveways and paths.
If there are any particular items or areas on the site you’d like checked out, make sure to mention these before the inspection begins.
Pest inspections
Just like a building inspection, a pest inspection can save you thousands of dollars when it comes to potential future repairs. If you live in an area prone to termites or other pests, this type of inspection is essential for your peace of mind before you buy a property.
A pest inspection should be carried out before you exchange contracts, and sometimes it’s possible to get a combined building and pest inspection.
What does a pest inspection involve?
A pest inspector will thoroughly investigate the property to check for the presence of any wood-destroying insects, such as termites or borers. The inspector will also look for any existing damage caused by those pests already, plus any potential damage they could cause in the future. The interior and exterior of the home will be inspected, including any accessible under-floor or roof cavity areas.
If pests are present and active, inspection reports help determine what treatment should be taken.
Termite inspection is mostly a visual process and is done by a qualified professional. Aside from the building interior and exteriors, areas such as roof and crawl spaces, trees and fences are also inspected. Ideally, this is all done before the property is purchased with a recommended repeat every four to six months.
Experts advise that pest inspections be done simultaneously with building inspections. Any damage detected from the former can be assessed by the latter and immediately determine the extent of repairs to be done. Pest inspection can range from $200 for a simple report, to up to $500 to include infrared thermal images.
Repairing termite damage to a house can cost you several thousands of dollars, so a pest inspection can be the difference between buying your dream home and buying a property that turns out to be a nightmare.
Pre-settlement inspection
A pre-settlement inspection is one of the final steps in the property purchase and settlement process. Also referred to as a final inspection or a pre-purchase inspection, this takes place just before you take ownership of the property – often on the same day as settlement.
The standard contract of sale terms require sellers to hand over the property upon settlement in the same condition it was in on the day the sale was finalised. Buyers should ask what is included in the sale before purchase to prevent misunderstandings once the contract has been signed.
The purpose of a pre-settlement inspection is for you to ensure that the property is in the same condition it was when you signed the contract. You can check that all the fixtures and fittings work, that any rubbish has been removed, and that no damage has been done to the property since you signed the contract.
What does a pre-settlement inspection involve?
There are several issues you can investigate during a pre-settlement inspection, including:
- Whether the home is vacant
- Whether the home is clean and in a good condition
- Whether the previous owners have damaged the property in any way
- Whether all the fixtures and fittings are functioning
- Are any items that were included in the sale (e.g. a dishwasher, air conditioner, in-built microwave)
- Whether the gardens and the exterior of the property are in good condition
- Whether any excess rubbish or waste has been left on the property
If there’s a major issue with the property then the seller will be in breach of contract, giving you the right to withhold settlement until the issue is fixed to your satisfaction.
Organising pre-purchase property inspections is vital before buying a property. This minimises the risk of encountering issues in the future and it can also give you an edge when negotiating a price with the seller.
Frequently asked questions
Do I need to pay for building and pest inspections?
Yes. The price varies depending on the third-party inspectors you use, but you can take advantage of this handy property buying costs calculator to help factor the expense into the overall cost of buying a property.
Why do I need building and pest inspections?
Building and pest inspections are essential to determine whether you will get value for money on the home or investment property you purchase. It can help you work out whether the property will be a good purchase or whether it will end up costing you thousands of dollars to repair in the future.
How can I choose the right building inspector?
Make sure you use someone qualified to carry out an inspection, such as a licenced builder, a surveyor or an architect. The inspector will also need to have insurance cover in place, including professional indemnity insurance.
If a building inspection turns up defects, does that mean I shouldn’t purchase the property?
Not necessarily. Pretty much every property will have a few problems but in many cases they are relatively minor. You’ll need to consider the potential repair costs before deciding whether or not you should purchase a property.
Why should I use a professional?
Professional building and pest inspectors know exactly what to look for and can pick up faults and defects ordinary people might miss. They’re also not emotionally involved in the purchase of the property in any way, so they can give you an honest and unbiased assessment of its condition.
How much do building and pest inspections cost?
Costs vary depending on the size of your property and the inspector(s) you use. A pest inspection will start at around $200, while building inspections can cost from $400 up to roughly $1,000.
