Are you looking to buy a new home or investment property?
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 settling 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%
- 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 things I check for when inspecting a property:
I look for things like:
- Is there any obvious crack to the external walls, is the roofline sagging or are there signs of foundations cracking.
- I check the power board in the electricity box. Is it relatively new? Has it got a circuit breaker? If the board is original and old this may mean that the property is due for rewiring.
- Have 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 show 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 scorecard 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 has a lot of disclaimers.
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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?
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!
Now is the time to take advantage of the opportunities the current property markets are offering.
Sure the markets are moving on, but not all properties are going to increase in value. Now, more than ever, correct property selection will be critical.
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