If you are getting serious about buying a property, you’ll soon realise it is just as stressful as it is exciting. And, of course, it is expensive.
So whether it is your first foray into the market or you are an existing owner, it is important to know how a particular property stacks up before you commit to buying.
Finding a property.
It’s never been easier to find properties for sale. Simply go to Domain or REA to find just about all the properties for sale in your target area. It is also a good idea to talk directly to local agents as additional “off market” opportunities might also exist.
So finding a property isn’t the problem.
What about finding out about the property?
Almost every property has some compulsory glossy marketing (online and offline) that plays on its strengths – whether it be stunning views, polished floorboards or updated kitchen appliances. However, it doesn’t tell you what the property is really like.
- How well has it been maintained?
- Was the last renovation (or the one before that) approved by the local council?
- When did someone last look into the roof space or under the house?
- Can the body corporate afford to properly maintain the building?
- Was the last renovation (or the one before that) approved by the Owners Corporation?
- Are there any large upcoming remediation projects?
Most selling agents can’t answer any of these questions as they play a different role in a property transaction. But many buyers still go ahead and buy properties without getting proper answers (if any). Would you buy a car like that? I’ll bet you’d want to test drive it, find out about the warranty, compare it with other similar cars and, if it’s a used car, get it inspected to make sure it’s mechanically OK.
So why would you think of buying a house or an apartment without doing due diligence?
Reduce the chance of buying a money pit or paying too much by doing the following before you sign a contract:
For all Properties:
- If you are borrowing to buy, the lender will want a valuation report. Use this process as a general check that the asking price is reasonable. If you are lucky enough to buy outright, think about getting a valuation done yourself. We recommend Herron Todd White for provision of this service.
- Check Council records to make sure all improvements have been approved. Compare latest plans at council with the current property layout.
- Get a Building & Pest Report. Some people think these reports are there just so that there’s someone to blame if an inspector has missed something major but that’s the wrong way to look at it. The real value of these reports is that an experienced and qualified inspector has been through the property and checked those parts of the house you generally don’t see, such as roof or subfloor space (if accessible). You should also talk to the inspector about the report and get his expert view of the property – as it compares to other properties of a similar age and type. We talk more about what the inspector is looking for during their inspection in our video series.
- Get a Strata Inspection Report. Knowing at least some history of a building is important and you must be comfortable that the body corporate is being well-run. If the building is not being maintained properly, you will be up for your share of repair costs in the future. The value of the property might also suffer. It’s also important to find out about any issues in the building. Living in an apartment block can be a challenge if there are disputes. We talk more about buying an apartment here.
- In some cases (e.g. small blocks), a building inspection is also a good idea. But get the strata report done first as it will help to focus any inspection. It may also reveal some issues in the complex that may influence your decision before you commit to a building inspection. Remember that a building inspection of an apartment block can only cover the unit you are buying and accessible common areas.
- There are costs involved in doing due diligence but it’s a pittance compared to the amount you are paying for the property. Please don’t fall for the trap of choosing your due diligence advisors solely on price. Ask friends and family for recommendations and make sure that the business you use has professional indemnity insurance and the inspectors are properly qualified.
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You can also download our Buyers Guide for more helpful tips.
The EYEON Property Inspections Team
At EYEON Property Inspections, we help you buy and sell with more confidence.