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Pre-auction pest and building inspection

Pre-auction pest and building inspection

Old Jul 8th 2010, 1:36 am
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Default 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.
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Old Jul 8th 2010, 2:34 am
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Default Re: Pre-auction pest and building inspection

Originally Posted by gumtree
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.

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.


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Old Jul 8th 2010, 6:08 am
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Default Re: Pre-auction pest and building inspection

Originally Posted by Swerv-o
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
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.

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Old Jul 8th 2010, 6:23 am
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Default Re: Pre-auction pest and building inspection

Originally Posted by POW148
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

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.


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Old Jul 8th 2010, 6:32 am
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Default 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
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Old Jul 8th 2010, 10:38 am
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Default 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)
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Old Jul 8th 2010, 7:39 pm
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Default Re: Pre-auction pest and building inspection

Originally Posted by Pomster
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)
As my wife works in Brisbane, we brought a litttle town house in the southern suburbs last year. The house went to auction but on auction day, we were travelling from Canberra to Brisbane so wasnt able to attend. The house was passed in as it did not reach the desired $$$$. We went to see it a couple of days later. It ticked every box that we had put on our "wish list" for a little "second home". The house was in imaculate condition, a real credit to the lady who had been renting it for the past 4 years. We put an offer in for $10K more (subject to inspections) than what it was passed in for and the offer was accepted. This offer was still $20K under what the vendors wanted for the place but in the GFC, it was a still a very good offer. We settled 4 weeks later and we have been extreamly happy with our purchase. My wife loves her little town house in the city.

The down side is that we have been having a long distance marriage for the past 20 months.

Barney

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Old Jul 8th 2010, 10:47 pm
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Default Re: Pre-auction pest and building inspection

Originally Posted by moonsurfer
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
Thank you all for your advice. Most popular houses are selling and gone in an auction here in Melbourne but there are lower clearance rates recently where private sale can then be negotiated. Will the risk of not getting a building/pest inspection be lower if the houses (incl. villa and townhouses) are less than 15 years' old?
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Old Jul 9th 2010, 1:55 am
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Default Re: Pre-auction pest and building inspection

Originally Posted by gumtree
Will the risk of not getting a building/pest inspection be lower if the houses (incl. villa and townhouses) are less than 15 years' old?
Again there are different points of view on this. In Canberra, people have been saying that building/workmanship has actually got worse in the last few years with developers building on the cheap to make a quick profit. But some of these earlier houses built in the 60s-70s (like my own) really are getting past it, with the harsh weather conditions causing subsidence/cracking of walls etc - which can be easily seen and doesn't always mean the house is in danger of falling down.

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.
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Old Jul 9th 2010, 3:08 am
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Default 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.
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Old Jul 10th 2010, 12:13 pm
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Default Re: Pre-auction pest and building inspection

Originally Posted by POW148
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
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.
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Old Jul 11th 2010, 10:35 pm
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Default Re: Pre-auction pest and building inspection

Originally Posted by fish.01
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!


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Old Jul 12th 2010, 3:48 am
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Default Re: Pre-auction pest and building inspection

Originally Posted by Swerv-o
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
Yeah, they are all full of them but I guess it is relative....the good ones climb into/on the roof and do lots of extra non structural checks...
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Old Jul 13th 2010, 6:56 am
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Default 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.
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