Monday, 30 July 2012 11:56
Low interest rates and a buyer's market can provide home buyers with a window of opportunity if they purchase a property free from faults and avoid expensive repairs Archicentre, the building design, inspection and advice service of The Australian Institute of Architects said today.
An Archicentre Architect conducting a property inspection
Queensland General Manager of Archicentre Ian Agnew said, 30% of all homes inspected by Archicentre Architects for home buyers have some form of major fault and can include foundation faults, roof structure, illegal building, wiring or plumbing that can run into costing tens of thousands of dollars to repair.
"Buying a home is the major way Australian families build wealth and they should act like a developer to ensure they can make a profit on the home. People need to recognise pre-purchase property inspections can add thousands of dollars to their profit by helping them make an informed decision."
Mr Agnew said, a pre-purchase property inspection is a standard process for investors looking for returns, especially if the property is being purchased for rental as future landlords plan to avoid tenant complaints and costly repairs.
"In the case of purchasing a home for renovation and then for sale, the pre-purchase property inspection provides a strong bargaining tool in a buyer's market where people are keen to sell and open to negotiation, especially where a major fault is discovered. A pre-purchase property inspection from a credible independent expert can estimate some of the extra costs that a purchaser can face and allow for a considered offer which takes these faults into account.
"Failure to assess the property before signing the contract of sale can lead to financial stress as usually people have to add the cost of unbudgeted repairs to their mortgage."
"A lack of knowledge of the home and its renovation potential to provide the required lifestyle and financial return before signing the contract often leads to disappointment," Mr Agnew said.
"A young couple who had purchased a home to extend into a double storey home found when the property was finally inspected that the home did not have the appropriate foundations to add a second storey.
"The popularity of the quick make over with 'products of mass deception' such as gap fillers which can hide a multitude of potential problems, and hidden areas of the home such as under the floor and in the roof cavity can often hide problems which the new owners find out about after they have moved in or start to renovate."
Mr Agnew said, with no legislative protection for home buyers against unqualified property inspectors, people hiring a person to undertake an inspection before purchasing should make sure they undertake their own due diligence to ensure the inspector has current appropriate qualifications and experience to inspect the property and give professional advice.
"Getting the most appropriate qualified person to carry out a pre-purchase property inspection is an important decision as people will base the financial decision on the report and commit in some cases to a twenty five year mortgage."
Top Seven Questions to ask before Hiring a Property Inspector
- Are you a currently registered builder, engineer, or architect?
- Is your inspection conducted to the Australian Standard?
- Do you carry at least $10 Million Professional Indemnity Insurance policy to guarantee your work?
- How many years experience do you have inspecting properties?
- Are you experienced with this type of property, residential, commercial, or heritage?
- Ask to see a copy of a sample report and read the fine print on what is covered and not covered.
- Find out how long the property inspection service has been in business and what is its operating address. Do not just rely on a mobile phone number for contact.
Mr Agnew said, thinking like a developer and using a pre-purchase property inspection to avoid buying a lemon and unbudgeted costs is a profit making strategy for all home buyers.
Archicentre has a FREE Cost Guide for home buyers and renovators to assist them work out the cost of faults and repairs at http://www.archicentre.com.au/cost-guide
Ron Smith, Corporate Media Communications, Archicentre - Mobile: 0417 329 201