Strata records inspections have always been a cottage industry. That means that most strata reports are done by a one-person business responsible for all aspects of the process – liaising with the strata office to arrange an inspection, searching and extracting data, preparing the report, following up on missing information, and providing customer support.

Many sole operators are good searchers. We know this because we use them in our own business. But having responsibility for all facets of the service means their reports are often incorrect because they have no quality checks in place. Other aspects of the service like customer support and follow up on missing information are also poor due to lack of time.

But this bad situation has recently got worse. We are being more vocal about these issues because we have been working with these operators for years, and what we are currently seeing happening in the industry is deeply concerning.

We have a lot of data on inspector error rates because we check 100% of the reports prepared by these operators. That’s tens of thousands of reports over 10 years. Even the best inspectors make regular errors. On average we see 5-10 mistakes, omissions, or oversights from each inspector every week.

Almost immediately after starting to offer strata reports back in 2010, we realised we needed robust systems to improve report quality so we could deliver consistent, reliable reports and high quality customer support. Our systems mean that our inspectors only deal with the searching of records and extracting the data into the report. Our dedicated support team reviews and improves every report as necessary. They also manage all booking, follow up and customer support.

The table below shows a service comparison.

The two main reasons why report quality is deteriorating further are Real Estate Agents and Covid.

Real Estate Agents

A lot of strata reports are now initiated by the vendor/selling agent. We created this innovation to make it quicker, easier and cheaper for buyers to get important property information ahead of auctions. Under this model the vendor and potential buyers share the cost of the service. BUT now with this approach being more common practice, many agents penny pinch on strata reports and treat them as a commodity. As a result, they go for the cheapest price and show no care for the quality of information made available to buyers, or the follow up support they receive.

Clearly, there are costs in keeping quality high, but agents will choose an inferior service so they can save less than $100. In a recent example, the director of a large, branded agency told us that they highly valued our service and quality but could save $70 per listing by using an inferior provider. The cost of selling an average apartment in Sydney is over $20,000. $70 is 0.3% of that cost. The recent change in the property market has worsened this approach.

For sole strata searchers it’s easier to offer a lower price than provide more features or a better service, particularly when agents just want the cheapest report. After all, sole providers are essentially selling their time and will trade a lower price for more work. BUT more work also equals lower quality. There are no more hours in the day.…..or are there?

Covid

Pre-Covid, 99% of inspections were done in-office. Searchers would visit the offices of strata managers and physically search the records or access them electronically in the office. Follow up on missing documents was mostly done on the spot.

Today, most searches are done remotely from a home office. As a result, searchers are now spending less time travelling and think they have more time to do searches, so they are trying to do more work. In some cases, they are trying to do twice as many reports each day. But remote searches aren’t always quicker and there are often issues locating important documents. This is further impacting on the quality of information in reports when follow up to find documents is not done.

So, what’s the solution?

Real estate agents, but also some property lawyers, buyers and sellers need to stop seeing strata reports as a commodity and recognise the importance of the information they provide. They should stop chasing the cheapest price and ensure that proper information and support are provided to buyers. This is the most important information about an apartment. Treat it with some respect.

Pressure also needs to be put on the searchers themselves:

  • It is impossible for one person to complete 6-8 strata reports a day. The quality of each and every one of those reports would be questionable at best.
  • Many buildings have become more complex due to high profile issues like building defects and flammable cladding. So, more time is needed to understand what’s happening, not less
  • Inspectors cannot check their own work effectively. Searchers often work very late at night to meet deadlines. Even the best searchers routinely make mistakes, even with normal workloads.
  • High work volumes multiply deadline pressures, which dramatically affects quality of reports and effectively eliminates any possibility of providing help to customers to understand the information.

We want better information for buyers. At present it’s a race to the bottom and it needs to be fixed.

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Best Regards,
The EYEON Property Inspections Team

At EYEON Property Inspections, we help you buy and sell with more confidence.