Forums / Property Investing / Help Needed! / Auctions and building/pest inspections

Viewing 9 posts - 1 through 9 (of 9 total)
  • Profile photo of echelon6echelon6
    Member
    @echelon6
    Join Date: 2009
    Post Count: 19

    Auctions are a funny thing – once the hammer falls if you win you can’t back out no matter what. So what do you do regarding building / pest inspections? Do you spend the $600+ for each auction you attend / hope to win? Or is there some sort of way around this massive risk?

    Conversely, say I have a dodgy house that has serious problems e.g. termites or structural issues. What's to stop me from doing a quick fix that will hide the problem for long enough for the entire auction process?

    Profile photo of Scott No MatesScott No Mates
    Participant
    @scott-no-mates
    Join Date: 2005
    Post Count: 3,847

    1. If you buy at auction without a P&B it’s @ your risk, is a couple of hundred too much for peace of mind vs thousands in repairs?

    2. Anyone who has a diligent inspection will discover th issues you are trying to cover.

    Profile photo of echelon6echelon6
    Member
    @echelon6
    Join Date: 2009
    Post Count: 19

    So are you saying each and every bidder would have spent $600 on each house he bids on?

    Basically what I'm trying to get at is if you have a dodgy house, auction is the way to sell it.

    Profile photo of Scott No MatesScott No Mates
    Participant
    @scott-no-mates
    Join Date: 2005
    Post Count: 3,847

    No, anyone who is seriously considering spending $x00,000’s is going to do due diligence auction or private treaty.

    Profile photo of Property TraderProperty Trader
    Participant
    @property-trader
    Join Date: 2002
    Post Count: 111

    Hi echelon6,

    Unfortunately, that is one of the major challenges that I see in trying to buy houses via the auction process. We have purchased well over 100 houses in Queensland and always had a building and pest inspection done on the property every single time.  It is a bit of a gamble paying good money for building and pest inspection before the auction HOPING that you will be the winning bid.

    In a perfect world, it would make sense to have a building and pest report completed prior to the property going to auction from a panel of inspectors. The report can be transferred over to the new purchaser and the new purchaser is required to pay for the building and pest report up and above the auction price received on the day.  For the potential buyer, it would give them the reassurance on what they are actually buying. For the seller, it would encourage a much more bigger pool of potential bidders at the auction.

    Ah well, that is my 10 cents worth.

    Regards,

    Jason Moore

    Property Trader | Boston West Pty Ltd
    http://bostonwest.com.au
    Email Me | Phone Me

    Private money lending opportunities available paying upto 12%, secured by bricks and mortar!

    Profile photo of colinnewlandcolinnewland
    Participant
    @colinnewland
    Join Date: 2006
    Post Count: 128

    I agree; as a seller, have the pest and building inspection reports completed by nationally recognised companies who include a warranty in their DETAILED report. Make sure to advise them in writing that you and the buyer will be relying on their report as an investment and that damages will result if faults are not discovered…it make cost a little more up front but you will recover them later.
    Then add the reports to the purchase contract…this will provide assurance to any prospective buyer and speed up the entire process.
    Have a special clause included in the sale of land contract that provides for he buyer to pay for these reports on settlement.  The buyer can get a 2nd report if they wish but they pay for that one as well. 
    As a buyer, ask that the inspections be paid for by the seller but with a written agreement to pay for the reports (up to a stated figure) if you complete the purchase of the property.  Remind them that they can use this report for other buyers if you decide not to buy (for whatever reason). If they are not will to pony up the expense even with your written guarantee of payment, ask yourself if this is the property for you. 

    Profile photo of Placebo_veganPlacebo_vegan
    Member
    @placebo_vegan
    Join Date: 2011
    Post Count: 7

    If you are in Sydney and are paying $600 for a pest and building inspection, you are getting ripped off!. Had inspection done by Acquired Property Consultants http://www.acquiredproperty.com.au. They charge $380 for both pest and building combined and the inspector actually calls you after the inspection to talk to you about the property prior to sending the report through.

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069

    I'm with the others. If you've honed in on a property that you are serious about then the building/pest report will provide peace of mind.

    Also ensure that you are in a good position to source finance as well.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of WilsonWilson
    Participant
    @marcowilson
    Join Date: 2018
    Post Count: 1

    Hello All members,

    Home purchasers forking out expenses to unfit building controllers

    While hunting down another home with a financial plan of about $3 million, acupuncturist Hong Lau turned down the shot of purchasing existing irritation and building reports offered to her by land operators on two properties.

    She dismissed the establishment reports authorized by the operators in light of the fact that “right off the bat I didn’t know who did the report and I didn’t feel I could ask that individual inquiry. Besides you don’t get the advantage of a building monitor taking you through the property and demonstrating to all of you the deformities.”

    Rather, Lau charged her own particular pre-buy provides details regarding four properties in Sydney’s Bondi Beach from experienced building advisor Chris Dyce, executive of Informed Building Reports. “I was extremely happy I chose to utilize him.”

    Dyce revealed that the back expansion of one house had died down. “When I moved toward the land operator about this, he was extremely disturbed that I had raised the reality it had died down.” The specialist said there was no way of it in the building examination report they had appointed and “denied it completely”. Lau chose not to offer on the house, which sold for about $3.5 million.

    She wound up purchasing an alternate property, “completely mindful” that she expected to spend about $300,000 to settle the wiring and plumbing and remodel. “That had a direction on the value I was ready to pay.”

    Dyce, leader of the Australian Society of Building Consultants, suggests purchasers select just experienced building monitors, who are appropriately qualified, have worked in the building business and are protected. He says a pre-buy report is totally justified regardless of the cash in the event that you get the correct examiner. “In any case, it’s a misuse of cash in the event that you get a nitwit… It can be exceptionally costly in the event that they don’t really distinguish the issues.”

    • This reply was modified 1 year, 1 month ago by Profile photo of Wilson Wilson.
Viewing 9 posts - 1 through 9 (of 9 total)

You must be logged in to reply to this topic.