Have you protected your future investment with these 5 preliminary property reports?
Finding a property within your budget that suits you is like finding that pot of gold at the end of the rainbow. We all know it’s out there (the house, not the gold), but finding it and beating the competition can be hard!
When you find it, should you quickly sign that contract and pay the deposit?
You can, but we’d advise against it.
When purchasing any property the same warning applies, BUYER BEWARE! Without taking some measures to check the property, you could find yourself purchasing a list of expensive problems.
Prior to committing to your purchase, we recommend that you make some enquiries.
Following are some preliminary property reports that may help you identify a bad purchase over a good one:
A qualified pest inspector will provide a pest report.
The report will identify any current pest activity or damage due to previous pest activity.
Termites, for instance, are common in Australia. There is a high chance of termite damage to a property if it is not treated regularly.
A qualified building inspector can provide a building report.
The inspector checks the building to highlight any defects, wear & tear or other items which need fixing.
This report usually includes photographs of any defects and the building inspector may provide estimates of the cost to repair any defects.
Almost every second hand home will have defects and nothing is perfect. However, the price should reflect the condition the building is in.
A survey is carried out by a qualified surveyor.
– the boundaries of the property
– whether the buildings are within the boundaries
– whether the fences are located on the boundaries correctly.
A number of years ago it was mandatory to have surveys done in order to obtain finance. However, these days most banks or financial institutions do not require one.
If you require a building certificate, a survey is mandatory.
This is a certificate issued by the local council.
To gain this certificate, an inspector will inspect the property and the survey report. They ensure the building erected on the property was constructed:
– in accordance with the original plans approved by council
– within the boundaries of the property.
If the dwelling complies with all current building standards, a building certificate is issued.
There is some risk in making an application to council for a building certificate. Council may issue an order for work to be completed if there is a substantial defect discovered.
A building certificate would be strongly recommended if a dwelling is constructed very close to one of the boundaries and there is no clear evidence of the exact location of the boundary.
A Strata report is useful for anyone purchasing a strata titled property. It provides precise detail of what is happening within the building or complex.
A strata report will show things such as:
-Levies payable, and frequency
-Voting rights and property entitlements
-Current or proposed special levies (due to building works or building defects)
-By-Laws (Rules and regulations)
All of these reports are at the purchaser’s expense. If you obtain all of the above preliminary property reports there can be a significant cost. However as a proportion of the purchase price of a house, the cost of all these reports is still minimal.
Ultimately it is up to you to decide what preliminary property reports you should obtain as the law still says “buyer beware”. If you do not carry out full investigations and a defect is discovered after you buy the property, then that will be your problem.
What happens if the reports show an issue?
Depending on the issue, you have a few options. You can:
– decide not to purchase the property,
– ask the vendor’s to fix the problem and proceed with the purchase price,
– negotiate on a reduced purchase price so you can have the issues fixed yourself or,
– decide to proceed with the purchase without negotiations