Buying a property is a massive investment – an investment you want to safeguard. One way of doing this is by organising a building and pest inspection.
Some experts argue getting a building and pest inspection done is a non-negotiable when buying property. This is because it allows the buyer to pull out of the deal or renegotiate if unsatisfied with its findings if the property contract is conditional – potentially saving you from buying a dodgy home. But since building and pest conditions mean your offer is conditional, this could potentially mean it isn’t as competitive as any unconditional offers on the table.
In the current seller’s market, should you risk it to get the biscuit? Or do you need to cover your ass(et) by organising a building and pest inspection?
What is a building and pest inspection, and what’s on the report?
A building and pest report is written up based on the findings of a building and pest inspection. The purpose of a building and pest inspection is to identify any issues with the property – structurally or otherwise – so that you’re fully informed about the condition of your new asset. With a building and pest report, you won’t be caught out by any nasty surprises.
Issues that could pop up on a building and pest report include:
- Structural issues with the building
- Any evidence of termite infestations/other pest infestations
- Holes or cracks in the roof or walls not visible in plain sight
- Any mould, rust, stains, dampness, rotting timber, or any other kind of damage to the property
- Doors, windows, or any other feature of the home not working correctly
- Any potential electrical, gas, or water issues
- Any other issue with the property identified by the inspector
“Problems could include a squeaking hinge, a loose door, a handle that needs fixing, a little bit of paint missing, a corner that’s popped,”
“There could be some small issues like that that you’d expect when buying a home that might be 10 to 40 years old.”
You have two options once you’ve received your building and pest report: (1) you can be satisfied with the findings and proceed as agreed, or (2) you can be unsatisfied and either renegotiate your terms or back out of the contract. That is if the building and pest conditions are listed on the contract.
Getting a building and pest report done without mention of it on the contract (for example, if you signed an unconditional contract) can leave you without a leg to stand on, as you may need to follow through with the purchase no matter what the findings are.
Do you need a building and pest inspection before you buy?
Legally, you’re under no obligation to have a building and pest report was drawn up for you. It’s meant to be for the benefit of the buyer, not the seller – so you’re more than allowed to not get one done.
“Whether it be termites or a structural problem that you can’t see with the naked eye,”
“Not doing a building and pest inspection is like buying a car without getting a RAC check. It is very risky.”
“Without going into the roof cavity or subfloor space, you are unlikely to know if lingering building issues are waiting to cause an expensive problem,”
“One in 100 people don’t do a building and pest inspection because they either have a family friend or relative who’s smart enough to see the issues,”
“So, if you’ve got a family member who can spot any concerns, you could make the contract subject to a pest inspection, not a building inspection.
“But again, you’re still having a condition on the contract, so you might as well cover both building and pest inspections, just to be safe.”
“You can have a better offer than your competitor price-wise, but if you’ve got ‘subject to building and pest inspection’ attached to that contract, those conditions are to a certain degree looked at,”
“So, although your offer can be higher than somebody else, chances are they will accept a lesser offer, the fewer conditions that it does have.”
But if you’re buying a normal family home, it’s not such a bad idea to make your offer subject to building and pest – only if you’re not in competition with somebody else.
“If there’s not a lot of buyers on that particular property and you’re buying it as a home to live in, then that’s not a bad idea for peace of mind.
“Also, if it comes back with major structural defects, you can then renegotiate potentially the purchase price, based on the amount of work that it needs doing.”
So, is it ever acceptable to skip a building and pest inspection?
“A lot of first-time developers tend to still get a building and pest inspection… when they’re sort of losing focus that their main motivation is the actual land itself,”
“Sometimes, there are situations where the builders have gone bust as well,” he said.
“So, in those circumstances, although the builder’s warranty insurance might be there, it’s sometimes hard to enforce. It’s rare, but it can happen.”
“If you’re still within the warranty period then it’s on the builder to rectify those issues,” she said.
Tips for negotiating your contract
If you’re thinking about submitting an offer with building and pest conditions – but you’re worried, it’s going to make it less competitive – there are a few ways that you can strengthen your offer while safeguarding your potential new asset.
Shorten the building and pest dates
Typical building and pest dates can range anywhere from one day to 21 days – often, the dates are in line with finance approval. One potential way to put in a strong offer with building and pest terms attached is to shorten the period in which you get the inspection done, with Building Inspections Perth this can be achieved within 1 day.
“Normally, you allow seven days for a building and pest inspection clause. But what you can do is bring that down to one day.”
“Then that falls in line with the buyers cooling off period. That way, it not only cuts the time in half, but it’s also in the timeline that they could have cooled off on the property anyway.”