Pre-purchase property reports are understandably popular with homebuyers and the number of people and organizations which offer building inspection services has grown significantly.
Even in a fast market such as we experienced in 2006, it's wise to take a moment to consider a building inspection as an essential part of any contract for the purchase of a property.
A good building inspection will inform the homebuyer of important information that could influence their ultimate decision on a property. Often this includes whether the dwelling is structurally sound and whether the buyer can expect major expenditures in the future, such as roof repairs.
A building inspection can and should be tailored to suit the age of the property. When buying a new home for example, it makes sense to have a thorough inspection of the property's fixtures and fittings including the quality of the cabinet making and tiling in addition to the structural report itself.
With an older home, naturally you should expect normal wear and tear but your primary concern should be with any structural faults that could lead to expensive repairs such as damage to the foundations. A reputable building inspector will discuss these issues with you to create an inspection that suits your needs and budget.
Ideally, a building inspection is completed before you make an offer to purchase. This would allow a buyer to negotiate with the seller, but this process can cause delays and may result in the property going to another buyer. It's not always practical.
It is much more common for a homebuyer to include a building inspection as a condition to an offer to purchase a property. This condition should be carefully written in order to avoid confusion or misunderstanding.
A pre-purchase building inspection condition should state who pays for the report (usually the buyer), and its required completion date.
The criteria for the report should be stated in the condition, such as a reference to the accepted Australian standards for property inspections. Ideally the inspector should be a registered builder or an architect.
The condition should also include the actions necessary if the inspection discloses that the dwelling does not conform to the declared standards required by the buyer. In the event of a negative report the pre-purchase inspection condition should offer the seller the option of fixing the problems within a set timeframe.
If the seller refuses to comply, the buyer should have the option of terminating the contract to purchase the property.
The condition should also state that if a buyer does not have the inspection carried out or does not follow up a negative report within a specified time, then the contract to purchase the property will proceed normally.
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