9 September 2014
Be Careful of Costly Repairs
Home buyers should act like developers in some ways to avoid being caught with a lemon in the current Australian property market. Developers, who are driven by making a profitable return on the properties they buy, methodically go through the process of carefully assessing the condition of the building and how it can be renovated or redeveloped working out their budget and return before they consider signing contracts.
Archicentre's national inspection statistics show that around 30 per cent of all homes inspected have faults in areas including illegal building, footings, roof structure, wiring, plumbing and dampness.
"Illegal building can leave the new home buyer with a major and costly legal issue especially if it creates a safety issue or the building does not comply with regulations."
"Unbudgeted costs for repairs such as restumping, plumbing and wiring can run into tens of thousands of dollars and blindside home buyers and investors who fail to do their homework before spending hundreds of thousands of dollars on purchasing a property."
Many buyers start "behind the eight ball" by purchasing a property without first having arranged a pre-purchase property inspection only to find they may face many unbudgeted costs after taking possession.
Home buyers can use pre-purchase property inspections to gain value during the property purchase process and includes:
Assessing the quality of the property and the potential cost of any repairs.
Provides an independent document to negotiate the price with the vendor.
Forms the basis for a feasibility study for any future renovation.