Pre-auction pest and building inspection
#1
Forum Regular
Thread Starter
Joined: Nov 2008
Posts: 48
Pre-auction pest and building inspection
For houses selling at an auction, just wondering if it is worthwhile to arrange a pre-auction building inspection if you have no idea whether you will get the house within your budget. Please advise.
#2
Re: Pre-auction pest and building inspection
Sadly, this is part of the evil of the auction system. You would be a fool not to have an inspection done before you buy any house, yet with an auction, you HAVE to buy there and then if you win, and are unable to back out later on, yet you have no idea if it will even be in your price range until the day of the auction.
So the reality is that you will need to get an inspection done for any house that you are interested in bidding on, irrespective of whether you will ultimately be able to afford it or not. Over many months of failed auction attempts, this could amount to thousands of dollars in inspection fees alone, before you even obtain a contract to purchase a house.
S
#3
Re: Pre-auction pest and building inspection
Sadly, this is part of the evil of the auction system. You would be a fool not to have an inspection done before you buy any house, yet with an auction, you HAVE to buy there and then if you win, and are unable to back out later on, yet you have no idea if it will even be in your price range until the day of the auction.
So the reality is that you will need to get an inspection done for any house that you are interested in bidding on, irrespective of whether you will ultimately be able to afford it or not. Over many months of failed auction attempts, this could amount to thousands of dollars in inspection fees alone, before you even obtain a contract to purchase a house.
S
So the reality is that you will need to get an inspection done for any house that you are interested in bidding on, irrespective of whether you will ultimately be able to afford it or not. Over many months of failed auction attempts, this could amount to thousands of dollars in inspection fees alone, before you even obtain a contract to purchase a house.
S
Barney
#4
Re: Pre-auction pest and building inspection
In the ACT, it is the seller who has to have a house inspection done on the property that is being advertised for sale. This inspection report must be prepared prior to it being advertised and passed on to any interested party at request. The cost of this inspection is passed on to the buyer at time of exchange of contracts.
Barney
Barney
That sounds like a much better system. Though I am unsure if I would necessarily trust an inspection provided by the vendor, though I am guessing there are certain checks and balances in place to prevent any wrongdoing. But that mechanism certainly makes it much fairer on the purchaser.
S
#5
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Joined: Feb 2010
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Posts: 98
Re: Pre-auction pest and building inspection
Which State are you in gumtree? The system is a bit different in the ACT as POW 148 says. I'd also add though that the inspection report I got when I bought here in Canberra was pretty well useless as it was so full of fillers, legal disclaimers and equivocations that all it really told me was that there was a structure and it was standing, $800 or so later.
If you're in QLD I would definitely say pay for a pest inspection beforehand. But your own gut feeling about the state of the house otherwise, could save you a lot of money. Cheers
If you're in QLD I would definitely say pay for a pest inspection beforehand. But your own gut feeling about the state of the house otherwise, could save you a lot of money. Cheers
#6
Re: Pre-auction pest and building inspection
and in Vic, local councils advise if your area is a declared termite zone or not.
If you are worried about pests, check bits of wood in the property with your fingernail...if it crumble, worry!
If you do buy a property in the early stages of termite infestation, treatment is effective. Or buy a brick house on a concrete slab...
(alternatively as many auctions are failing now, wait for the property to be put up for private sale, make a post auction offer and build inspection clauses into the contract)
If you are worried about pests, check bits of wood in the property with your fingernail...if it crumble, worry!
If you do buy a property in the early stages of termite infestation, treatment is effective. Or buy a brick house on a concrete slab...
(alternatively as many auctions are failing now, wait for the property to be put up for private sale, make a post auction offer and build inspection clauses into the contract)
#7
Re: Pre-auction pest and building inspection
and in Vic, local councils advise if your area is a declared termite zone or not.
If you are worried about pests, check bits of wood in the property with your fingernail...if it crumble, worry!
If you do buy a property in the early stages of termite infestation, treatment is effective. Or buy a brick house on a concrete slab...
(alternatively as many auctions are failing now, wait for the property to be put up for private sale, make a post auction offer and build inspection clauses into the contract)
If you are worried about pests, check bits of wood in the property with your fingernail...if it crumble, worry!
If you do buy a property in the early stages of termite infestation, treatment is effective. Or buy a brick house on a concrete slab...
(alternatively as many auctions are failing now, wait for the property to be put up for private sale, make a post auction offer and build inspection clauses into the contract)
The down side is that we have been having a long distance marriage for the past 20 months.
Barney
Barney
#8
Forum Regular
Thread Starter
Joined: Nov 2008
Posts: 48
Re: Pre-auction pest and building inspection
Which State are you in gumtree? The system is a bit different in the ACT as POW 148 says. I'd also add though that the inspection report I got when I bought here in Canberra was pretty well useless as it was so full of fillers, legal disclaimers and equivocations that all it really told me was that there was a structure and it was standing, $800 or so later.
If you're in QLD I would definitely say pay for a pest inspection beforehand. But your own gut feeling about the state of the house otherwise, could save you a lot of money. Cheers
If you're in QLD I would definitely say pay for a pest inspection beforehand. But your own gut feeling about the state of the house otherwise, could save you a lot of money. Cheers
#9
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Joined: Feb 2010
Location: Coming up for air
Posts: 98
Re: Pre-auction pest and building inspection
Having said this, generally the standard of Australian houses, no matter how old, is nowhere near as high as in the UK and we just have to live with that. What are firms charging in Melbourne for a pest inspection?
For what it's worth if you're worried, pay $150 or so for a pest inspection beforehand and use your own instinct about whether the house is sound. My one experience with building reports has convinced me it's not worth getting one unless they go the whole hog and do jackhammer testing of the ground, camera inspection of pipes, drains, etc, which you'll pay a great deal of money for. In Canberra the inspection report that comes with the property is very superficial and does not cover these sorts of investigations, and this may well be the case in Melbourne too.
#10
Re: Pre-auction pest and building inspection
Out of 4 or 5 houses we ended up bidding for, we had one checked by Archicentre and the other by a cheaper independent builder. We got none of those...
We asked friends with some building knowledge to have a look at the other ones.
The 2 inspections we paid for, it was because of a gut feeling really. We wanted a professional opinion on repairs and potential renovation possibilities on those 2.
The other houses were in good repair (as far as we could see) and had been well looked after. Also, there weren't any renovations needed straight away and so we felt we could move in immediately.
But it was almost a relief to not be successful at auction as with hindsight you realise what a huge gamble it is to buy a house that way.
If you have researched the area well and have a good idea about what prices are doing, then you should be able to predict whether you will be able to afford it. By the end of our search, we could tell how much a house was going to be sold for within a few grands. House on our street last week was quoted by agent at low $400s. Seeing the turnout, I told my OH it'll go for over $500k. He thought $480k. It went for $507k!
We ended up buying a house that had been passed in and we were able to get a contract conditional to inspections and finance. Best way to do it if you can.
If you are in a high-risk area for termites (we are), it is advisable to get at least the pest inspection before bidding. There are lots of termite-prone areas in Melbourne so it pays to be careful.
We asked friends with some building knowledge to have a look at the other ones.
The 2 inspections we paid for, it was because of a gut feeling really. We wanted a professional opinion on repairs and potential renovation possibilities on those 2.
The other houses were in good repair (as far as we could see) and had been well looked after. Also, there weren't any renovations needed straight away and so we felt we could move in immediately.
But it was almost a relief to not be successful at auction as with hindsight you realise what a huge gamble it is to buy a house that way.
If you have researched the area well and have a good idea about what prices are doing, then you should be able to predict whether you will be able to afford it. By the end of our search, we could tell how much a house was going to be sold for within a few grands. House on our street last week was quoted by agent at low $400s. Seeing the turnout, I told my OH it'll go for over $500k. He thought $480k. It went for $507k!
We ended up buying a house that had been passed in and we were able to get a contract conditional to inspections and finance. Best way to do it if you can.
If you are in a high-risk area for termites (we are), it is advisable to get at least the pest inspection before bidding. There are lots of termite-prone areas in Melbourne so it pays to be careful.
#11
Re: Pre-auction pest and building inspection
In the ACT, it is the seller who has to have a house inspection done on the property that is being advertised for sale. This inspection report must be prepared prior to it being advertised and passed on to any interested party at request. The cost of this inspection is passed on to the buyer at time of exchange of contracts.
Barney
Barney
#12
Re: Pre-auction pest and building inspection
In brisbane you are sometimes offered a vendor organised inspection but these are usually organised by the agent through an agreement with an inspector who does the bare minimum with 5 pages of caveats. These inspectors will often just do a structural inspection which misses many other things.
TBH the inspection I paid lots of money for on the house I bought was full of caveats and citations of legislation as to why he couldn't look at this, provide an opinion of that and access the other.
Once you had taken out the legal stuff, there wasn't really much left!
S
#13
Re: Pre-auction pest and building inspection
TBH the inspection I paid lots of money for on the house I bought was full of caveats and citations of legislation as to why he couldn't look at this, provide an opinion of that and access the other.
Once you had taken out the legal stuff, there wasn't really much left!
S
Once you had taken out the legal stuff, there wasn't really much left!
S
#14
BE Enthusiast
Joined: Jan 2010
Posts: 440
Re: Pre-auction pest and building inspection
We also ended up buying a house that had been passed in at auction.
We participated in one auction (and paid the building and pest inspection fees). Based on this experience I would never buy a house at auction. I would SELL a house at auction, though!
An alternative is to make a serious offer for what you think the place is worth PRE-auction. There was quite a good piece on this in last weeks Sydney Morning Herald. You could also consider using a buyers agent if you are not used to negotiating or are not sure about local values.
We did this on the above property and it very nearly worked. The most important thing is to leave the offer on the table for a very limited period of time (24-48 hours). In our example the vendors ummed and aahed and eventually said they would stick with the auction.
They were right, as the property sold for 15% more than our offer (and 15% more than it was worth!) Two couples, one of them audibly egged on by the wife "please darling, just another $10,000" went head to head and lost all sense of reality.
Good luck.
We participated in one auction (and paid the building and pest inspection fees). Based on this experience I would never buy a house at auction. I would SELL a house at auction, though!
An alternative is to make a serious offer for what you think the place is worth PRE-auction. There was quite a good piece on this in last weeks Sydney Morning Herald. You could also consider using a buyers agent if you are not used to negotiating or are not sure about local values.
We did this on the above property and it very nearly worked. The most important thing is to leave the offer on the table for a very limited period of time (24-48 hours). In our example the vendors ummed and aahed and eventually said they would stick with the auction.
They were right, as the property sold for 15% more than our offer (and 15% more than it was worth!) Two couples, one of them audibly egged on by the wife "please darling, just another $10,000" went head to head and lost all sense of reality.
Good luck.