Buying Property in Australia and Home Inspection Nightmares
Last Updated: February 21, 2016
Why Property Inspections is the Most Glaring Omission in Australia’s Consumer Laws Property inspection is unregulated in Australia. Becoming a property inspector, therefore, involves nothing more than calling oneself a property inspector. There are no training requirements, no necessary certifications, and no guarantee that individuals in the profession are qualified to be there. As a result, home buyers cannot assume that individuals who market themselves as property inspectors are necessarily well-qualified.
Property inspection, however, remains an essential step in the real estate purchasing process. We have all heard horror stories of naive buyers who acquired new homes only to learn about serious and costly defects. Homeowners need to obtain an adequate inspection in order to avoid investing their hard-earned money in a poor quality home. Most property buyers do not have the skills to perform a thorough inspection of their own, and must therefore trust their fate to the skills of a property inspector.
Because of Australia’s lack of regulation in this area, home buyers need to be diligent in hiring an inspector. So, for example, if a properties inspector markets himself as an “expert on property inspection in Queensland,” prospective home buyers should not take the claim at face value. Instead, they should investigate the inspector’s qualifications. This is, of course, true in areas other than Queensland, also.
Questions to Ask When hiring the property inspector
If you are a home buyer, be sure you understand what does a building inspection cover and you should have a prepared list of questions to ask each property inspector you consider hiring. You are the client, and it is entirely appropriate for you to request information of a potential hire. At a minimum, ask them about their qualifications. For example:
- Have they had adequate experience in home inspection?
- What is their work history, and how did they gain their experience?
- Who mentored or supervised them when they were learning to inspect properties?
- Are they members of a certified home inspection company?
A good inspector will have ready answers to these questions, and will be able to demonstrate extensive, meaningful experience in home inspection. You may also want to ask for a few references from former customers. Call these references and find out whether past clients are satisfied with the service they received.
You should also ask questions about how the inspector’s business operates, focusing on issues that will affect you personally. For example:
- Do they have indemnity insurance?
- If they fail to identify a property defect, how will they correct the error?
- How much do they charge for their services?
- Do they provide any guarantees?
Any reputable property inspector will be happy to answer these questions and provide references. An inspector's refusal to do so should be seen as a major red flag.
To ensure that you retain the best property inspector possible, interview more than one candidate. Examine each candidate thoroughly, and then choose the most qualified (but not necessarily cheapest) candidate. After examining several candidates, it will generally be quite easy to tell which candidate has the strongest qualifications.
In addition in addition to spotting problems with the property, a qualified inspector can help determine the value of the property. A pre purchase building inspection will help you estimate the appropriate price for the property you are considering buying.
Valuation can help you negotiate a good price, and avoid overpaying. It can also help improve your ability to obtain financing from your bank. A bank will obtain its own appraisal of the property’s value, but it will be difficult to get financing if you are offering significantly more money than the bank believes justified.
Your Own Basic Survey
Even before going to the expense of hiring a property inspector, you should do your own simple survey of the property you wish to buy. Even if you feel an emotional attachment to the property, try to be objective in surveying it. Walk through the property, looking carefully for potential problems. Here are a few red flags to watch out for:
- Structural problems. Cracks in the foundation, bowed walls, and sagging roofs can be major problems.
- Utilities. When you visit properties, be sure to switch light switches on and off and run the water, to make sure that utilities are working properly.
- Mold and pests. Watch for signs of mold, including evidence of recent patching and painting. If you see any gnaw marks, rodent droppings, molehills, or other signs of a pest problem, consider the expense you might incur if you have to remediate the damage. If you buy a pest and building inspection report, it should reveal these problems, but you can discover most of these problems on your own.
- Neighborhood. Watch for nuisances and noises coming from elsewhere in the neighborhood. You might want to visit the property at different times of day, because a property that is peaceful during daylight hours might be a party zone at night. There might also be nearby trains, airplanes, or other noise sources that occur only at certain times of the day.
Screening properties on your own will help you avoid paying for property inspections for properties that you will not ultimately buy.
One More Tip
One more way to protect yourself is to befriend neighbors before you buy a property. Knock on a couple or doors, or tactfully approach people in public, and asked them about the house. See what they think of the neighborhood, and obtain a little bit of history about the property. You will learn things that are not written down in real estate records or anywhere else.
It might seem a little bold to approach strangers in this way, but most of them will understand. It is worth stepping out of your comfort zone to avoid buying a property that has hidden problems. If you end up buying the property, these people will be your neighbors, so it does not hear to inspect them a little bit, too.
It is truly unfortunate that Australia has chosen not to regulate the property inspection industry. That may change in the future. For now, though, buyers must bear the burden of ensuring that their properties are properly inspected. Screen your property inspectors thoroughly, conduct your own pre-inspection of the property you wish to buy, and use the knowledge of neighboring property owners to your benefit. By doing so, you can greatly reduce the chances of buying your first or even second home in Australia with serious defects.