Choose your building and pest inspector carefully- Rob Balanda

All too often property investors are lead by the nose by the friendly real estate agent who recommends them to an inspector who, in the expectation of receiving further referrals from that agent, will look for a soft option or solution to any problem that arises.

That inspector will not stand up on your behalf without fear or favour because of the risk of loosing future business from the agent.

The last example I came across was where the pest and building inspector either did not open all the sliding doors around the property or if he did so, didn’t make mention of it in his report.

When the investor took over ownership of the property, sure the sliding doors worked and, push come to shove, closed and sealed the property from the elements.

But when the owner engaged a specialist window contractor to provide what he thought would be a long overdue routine service to their shaky operation, the inspector advised that they had less than a year of life left and the whole of the eastern and northern frontage to the property comprising the windows would need to be replaced – Oops, a $15,000 cost.

If only the inspector had picked up on this item then the Buyer could have negotiated with the Seller for some reduction in the price.  That opportunity was now lost.

When the property investor looked at the terms of the pest and building report again after settlement (to try and understand how all this could have happened) it was only then that he learned this hard lesson as a property investor.

That is, “Beware the Cheapies.

 

 The explanation for all of this was simple. 

To promote the engagement of the pest and building inspector recommended by the agent, that agent ingratiated himself with the investor by telling him that this inspector was “the cheapest one in town”.

The report the inspector provided reflected just that – it was a Tick Box Report i.e. all of the items in the house that he inspected were contained in a 1 page report, with one line per item and little or no space for comments.

The item dealing with windows  was very general and did not mention sliding doors that doubled up as windows.[sam id=32 codes=’true’]

When challenged by the investor about why the major issue of the operation of the windows was not brought to his attention, the inspector simply pointed to the note at the bottom of the report that stated that “This report is for a fixed price and will deal only with the items noted above.  If investigation on any other matter is required then additional fees will be payable and a written direction required to undertake this work.”

 

So the message is loud and clear, and twofold.

Never engage an inspector recommended by a real estate agent.

Source your own independent professional.  Secondly, beware the low price Tick Box Reports.  Look for an inspector who is “reassuringly expensive”.

Or if cash flow is an issue for you, as one of our infamous Federal Politicians says, “Just put it on credit card”.

[post_ender]



Want more of this type of information?


Rob Balanda

About

Rob is a partner in the Gold Coast based law firm MBA Lawyers. He is a highly regarded educator of property investors and estate agents and the author of the "Made Simple" series of books and CD's.
Visit www.ClausesMadeSimple.com


'Choose your building and pest inspector carefully- Rob Balanda' have 6 comments

  1. November 2, 2013 @ 11:36 am Choose your building and pest inspector carefully : The Australian Real Estate Blog

    […] Read the full article […]

    Reply

  2. December 26, 2013 @ 5:18 pm Rikki Clark

    Thanks for this informative post for choosing the best control inspector for our property. It matters a lot for any property sale or renting purposes.

    Reply

  3. January 22, 2014 @ 6:24 pm Rikki Clark

    I agree that pest inspection and property inspection is very much necessary before buying any property.

    Reply

  4. February 13, 2014 @ 10:03 am Geoff Grover

    This article is most misleading of the Building & Pest situation in my experience as a real estate agent of 10 years standing on the Sunshine Coast. In general, I find the opposite to be so. All inspectors I have come across are more concerned about missing anything and being sued later on, and unless they report absolutely everything, as is designated by the reports they use prepared by the Professional Indemnity insurer they leave themselves open.
    This construes the whole process to a covering backsides inspection, rather than a more pragmatic analysis commensurate with the properties age. This pushes it more to killing a reasonable deal by being unrealistic. I had a case recently where the buyer wanted recompense for a hailrine crack in a glass window for a 25 yea rold house and leaves cleaned out of gutters. The other classic is solicitors playing “smartie” to suggest to their buyer client that the seller should pay for an expensive termite barrier treatment even though there is no sign of temrites and regular inspections have been held. This is for the buyers benefit, they should pay. Just because a Pest inspector recommends same, and they do always here as we a re a high risk temite area, does not mean the seller has to pay.
    I always recommend an inspector and always encourage the buyer to attend and hear it from the” horses mouth”, rather than a report that says everything yet says nothing.
    All the qualified ones charge much the same – this example surely cannot be a common one, I have never heard of a “tick box” cheapie inspector.
    My advice is in the other direction. Get a pragmatic assessment verbally on top of the written report.

    Reply

  5. December 19, 2014 @ 10:37 am Action Property Inspections

    Interesting article and unfortunately not too uncommon with sometimes going for the cheaper quotes with building and pest inspections which are rushed through or not completed in detail or by a qualified inspector.

    Reply

  6. November 27, 2015 @ 5:53 pm pestmanagementbrisbane

    Thank you so much for the useful post. I totally agree that pest inspection is very much necessary before buying any property…

    Reply


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