A property is a big investment and it is important you do your due diligence before committing to buying one. Professional pest and building inspections are a key part of this, as they help you uncover any hidden issues. They also provide a detailed report on the exact condition of the property and any renovation or remediation works required.
However, while pest and building reports can be incredibly useful, they can also be quite difficult to read. They provide a lot of information, and go into great detail, making it hard to tell what is most important. The language used is often also very technical and convoluted, particularly for those unfamiliar with building and construction terms.
Acknowledging this, we want to take a closer look at pest and building inspections and reports. As part of this, we will explore why and when they should be done, and what they should include. We will also share our advice on the key points to take note of, and what they actually mean.
Are pest and building inspections worth the cost?
While exact prices vary, pest and building inspections will add at least a few hundred dollars to your purchase costs. However, as they are not legally required, it is possible to buy a property without having these reports prepared. Recognising this, some investors choose to keep their costs down by forgoing these checks.
While this approach may save you money in the short term, it could cost you significantly over the long term. This is because pest and building reports give you a clear picture of exactly what you are buying. They also highlight the potential issues a property could present and the additional costs you may need to cover.
Importantly, these inspections are carried out by an independent third party with significant experience, and formal qualifications, in building and construction. As such, the report they produce should be an unbiased technical assessment of a property’s true condition. It should also identify issues that would likely be missed, even if you have inspected the property yourself.
When should a property be inspected?
Because of the cost associated, many investors choose to wait until the cooling off period to have a property inspected. To allow for this, they usually submit a conditional offer, subject to the results of the pest and building inspection. This means they can secure the property first, while still having an out, or room to negotiate further, if any serious issues are found.
However, we generally recommend organising to have inspections done earlier in the process, before you submit your offer. This means you can confidently proceed with the purchase, knowing what you are signing up for. It also allows you to submit an unconditional offer, which is more likely to be successful, particularly in a competitive market.
What’s more, the contents of an inspection report can help inform your offer and be used as leverage during negotiations. For example, if any serious issues are identified, your offer can take into account the price of the required repairs. Similarly, if several minor problems are reported, these can also be used to justify a reduced offer.
What should an inspection report include?
While there are standards dictating what must be included in an inspection report, the actual content can vary greatly. Different inspectors use different templates, which range from simple two-page “checklists” to much longer and more detailed documents. And, as a general rule, you get what you pay for, with more affordable reports usually lighter on the details.
Acknowledging this, there are a few things you should make sure your inspection report will include:
Before committing to using a specific inspector, we recommend requesting an example of their standard report. This allows you to check the format they use and confirm it will provide the level of detail you require.
What are the key things to watch out for?
It is important to acknowledge that most properties will have some issues – in fact, even new builds can have defects. As such, being an astute investor is all about understanding which issues are acceptable, and which are really worrying. For example, we generally pay particular attention to any mention of:
By contrast, these issues may sound serious, but are usually fairly easy to fix:
Want to discuss this further?
If you would like to learn more about interpreting pest and building inspection reports, contact Search Party Property. As property investment experts, we have significant experience with these documents and appreciate the invaluable insight they provide. We also work with some of the country’s leading inspectors and can help you find one in your area.