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The hidden problems with property purchases

Are you looking to buy a new home or investment property? Property-Investment-Checklist-300x199

Well don’t make the same mistake many buyers do and overlook identifying hidden problems that you may overlook in your excitement.

I remember reading a survey by St.George Bank a few years ago that showed the average Australian home buyer spends more than seven months searching for a property, does around 90 hours of real estate related research, inspects 12 about properties before finally settle on a purchase – yet most spend only an hour inspecting the property they eventually buy.

This means most people will look at a new car for longer than they inspect the home they eventually buy.

The survey also found more than half (55%) of Australian home buyers said they discovered hidden problems with their homes after moving in.

Here’s a list of the top 10 problems buyers discovered

  • Plumbing problems 28%
  • Poor TV reception 23%inspection house report pest check building property
  • Bad mobile phone coverage 20%
  • Noisy neighbours 19%
  • Cracks in the walls or floors 18%
  • High speed internet not available 16%
  • Parking on the street is difficult 10%
  • Rising damp 8%
  • Future developments in the area 8%
  •  Insufficient parking onsite 8%

Now this survey was conducted a few years ago, but it’s likely the finding would be much the same today.

Here are some of the thinks I check for when inspecting a property:

I look for things like:

  • Are there any obvious crack to the external walls, is the roof line sagging or are there signs of foundations cracking. 
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  • I check the power board in the electricity box. Is it relatively new? Has it got a circuit breaker? If the board is an original and old this may mean that the property is due for rewiring.
  • Has recent painting works covered up a few defects?
  • Are the floors sagging floors or creaking? This may indicate problems with the stumps or bearers.
  • Is there a musty smell that could indicate rising damp?
  • I check the water pressure by turning on the taps and the working condition of the various appliances including heating and cooling.

If there is a tenant in the property and they happen to be able to chat, I like to ask them a few questions – you’d be surprised what they come up with.

If there’s nothing obviously wrong with the property the next step is to get a professional building and pest inspection done.

What if the pest and building inspection shows lots of problems?

I’ve seen buyers freak out over building reports, especially with older homes, but I’m not suggesting you look for a perfect score card because you’ll never get it.

The building inspection is meant to identify all necessary repairs and it allows you to rule out properties with serious defects.

The purpose of the building report is to tell you every single thing that could be wrong, so it can look pretty scary.

And it’s likely to be detailed and have a lot of disclaimers.

Of course if you’re unsure about what it all means you can always talk to the inspector and share your concerns, as they’re working for you – not the vendor.

What does all this mean? 15563628 - house and question  3d image

When inspecting a property you’re likely to purchase, you should always be on the lookout for obvious defects.

If you identify any major problems, it might be best to give that property a miss rather than buying someone else’s problems.

However problems brought up in a building and pest inspection don’t necessarily mean you avoid the property.

It’s a bit like buying a used car – there will always be dings and dents, so don’t look for a perfect scorecard because you’ll never get it – and you’ll end up never buying anything.

The aim of conducting these inspections is to identify problems so you can go into your purchase with your eyes wide open and minimise surprises down the track.

Of course you can always use the defects as ammunition to negotiate a better purchase price!



Want more of this type of information?


George Raptis

About

George is a Director of Metropole Property Strategists in Sydney. He shares his 27 years of experience in the property industry as a licensed estate agent and active property investor to help create wealth for his clients.
Visit www.SydneyBuyersAgent.com.au


'The hidden problems with property purchases' have 2 comments

  1. January 2, 2015 @ 3:38 pm John O'Grady

    Talking to the tenant will certainly bring forward opinions that the agent will
    not express. They should, however, be treated with caution. Usually,the tenant
    has a seriously vested interest in your NOT buying the property. If you do,
    the tenancy will probably be terminated and he/she will need to move house.

    Reply

  2. March 23, 2015 @ 10:16 pm Ray White Property Management Bunbury

    These are very good tips that not only home buyers but also home renters will find very helpful. Great site!

    Reply


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