When you are purchasing property in NSW it is important to carry out some pre-purchase inspections prior to committing to the purchase. You may have heard some legal terms such as “caveat emptor” or “due diligence”. These are legal terms that particularly apply to purchasing a property because it is the purchaser alone who is responsible for making their own enquiries about what they intend to purchase.
In NSW there is very little the vendor has to disclose about the property they are selling and as the purchaser you buy the property as it is in its current state of condition and repair. Therefore, it is essential you find out what the condition of the property currently is.
What is a building inspection report?
A building inspection is a pre-purchase inspection always recommended when purchasing a property. This inspection may cost a few hundred dollars but could potentially save you thousands of dollars in the long run.
A building inspector will carry out a physical inspection of the interior and exterior of a property and provide a written report on the condition of the property which can include:
- Structural faults
- Minor defects
- Maintenance issues
- Safety hazards
They may identify issues such as rising damp, structural cracks or issues with guttering or drainage.
How will a building inspection report help me?
Obtaining a building inspection before buying a property means you will know in advance of any existing problems with the property rather than finding out after settlement when you become the owner. This might result in additional costs you had not factored in to the purchase. Once aware of the issues you may also be able to use the information to negotiate a lower purchase price, ie if you will need to pay for the repairs. The report may also prompt you to obtain specialist advice about any major problems and how this may affect the property over time.
What is a pest inspection report?
A pest inspection report is also recommended when purchasing a property. This report is similar to a building inspection but it will provide information regarding the presence of termites or termite damage or other pests which might adversely affect your ownership of the property. Again, this report may cost several hundred dollars but is a small cost compared to the several hundred thousand dollar investment you are about to make.
What other reports are necessary?
Most legal practitioners will recommend at the very least you obtain a pest and building inspection. Should you also get an electrical or plumbing inspection for example? Our advice is that is up to you. It is important to recognize that every property is different so what may be necessary for one property would not be relevant for another. It is your responsibility to carry out whatever inspections you feel necessary to be confident you are aware of the current condition of the property.
Ultimately the purchase price you are offering should reflect the present condition of the property and doing some homework is often the best way to make this determination.
For more detailed information head to https://www.fairtrading.nsw.gov.au/housing-and-property/buying-and-selling-property/buying-a-property/property-inspections
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I appreciated the blog’s clarification of the various stages involved in property inspections.