Nobody buys items off the shelves with their eyes closed. For sure, consumers would want to look at the item they’re about to spend their hard-earned money on. Inspection is certainly part of making informed buying decisions, after all.
The same logic applies to real estate investments. You’d want to know as much about the property you’re investing in as you possibly can. That’s when building inspections enter the picture. Get one done for a prospect asset and you’ll uncover the many intentional and unintentional secrets the property hides.
Once you know the property thoroughly, you can then use your newfound information as a bargaining chip to get the best possible price at the negotiation table. As a smart buyer, we’re sure you wouldn’t want to lower the bar as you fork out a fortune for such a substantial purchase.
Investing in real estate involves a lot of risk, especially when you’re bidding for existing structures. If the property has been around for a considerable amount of time, expect the place to hide potential problems here and there.
A simple ocular inspection won’t suffice for this purpose, sadly. This should be enough reason for anyone to turn to property inspectors but not every investor is convinced about the necessity of working with one. It’s from this lack of understanding of what these professionals bring to the table that often leaves property investors with a serious case of buyer’s remorse.
A vendor is required to disclose to you property defects they’re aware of. They’re bound by law to do that. But what if there’s damage somewhere that they haven’t seen just yet? In reality, it’s the latent defects that typically go unnoticed and they’re the ones that cost you a hefty sum to fix once you’ve bought the property in question.
A newly painted ceiling may be pleasing to look at but it may be hiding growth of black mould or leak stains underneath. Freshly laid floorboards can be enticing but it could be covering pest damage, wood rot, or rising damp. A bathroom that has freshly laid tiles may be a clincher but it could be distracting you from the fact that the original design failed to take waterproofing into account.
For anybody with limited knowledge on buildings, these problems could easily slip one’s notice. So if you don’t want to be fooled into buying subpar assets, your best bet is to really engage a property inspector to prepare an inspection report.
Another common cause for concern in any building is the presence of termites. These nasty, little pests can go about living in structures undetected for months (even years). And by the time the property owners find these insatiable threats lurking around, they’d be a few months away from wreaking massive havoc on the very foundation of the property.
Fixing the damage caused by these unwanted guests often goes as high as thousands of dollars, and in the worst cases: ten thousand. If you don’t want to spend that much for such a horrific yet avoidable problem, you have to treat hiring property inspectors as a non-negotiable part of you doing due diligence. Otherwise, you’d be forced to rectify termite problems instead of letting vendors shoulder the bill in the first place.
Pre-Listing Inspections
In reality, it’s not just investors who can benefit from a timely and thorough building inspection. Sellers can use it as a tool to give potential buyers peace of mind, especially when the report is done by a trusted name. It also eliminates the pitfalls and hassles associated with waiting to do the inspection report until a serious buyer is found.
Waiting to do the building inspection until after a property goes under agreement isn’t wise. A pre-listing inspection, however, puts property sellers in a position of strength during negotiations. That’s because the report allows them to fix-up issues that would likely come up if a buyer does get property inspection done before closing the sale.
Once the necessary repairs have been made, the seller or realtor can substantiate asking for a higher price for the property. That or he or she can adjust the asset’s current market value into a more realistic price, which makes it easier for him or her to sell the place. Either way, the vendor can eliminate over-inflated buyer-procured estimates from the negotiation table when a proper building inspection is done before the property gets listed.
When to Engage a Property Inspector
A timely building inspection just solves a whole gamut of problems for both the realtor and the property investor. However, there is a proper time to call upon the services of an inspector.
When buying a property through a private listing, the inspection has to occur before exchange or within weeks following the exchange. It’s a good way to arm yourself with knowledge that you can use to lower the price of the real estate asset you’re purchasing.
If you carry out the inspection shortly after exchange, you typically have a 14-day period to make requisitions with respect to the property you’re buying. It’s a way to see what the vendor is prepared to do about nagging latent problems before you finalise the purchase. Otherwise, you’ll have to exercise cooling-off rights as stipulated in most real estate contracts.
It can be trickier performing a property inspection when you’re purchasing a real estate asset via an auction, though. For the most part, a buyer gets the property as is on the fall of the hammer. Meaning, you have to live with the state of the edifice once the bidding ends.
For this particular scenario, it may be best to arrange a building inspection before the auction begins. This way, you can make a reasonable offer early and not get caught paying for more than what you bid for.
Inspections Benefits All Parties
Building inspections isn’t only necessary by virtue of what it does but mostly because it’s beneficial to all parties involved in any real estate transactions. It gives buyers much needed leverage on the negotiation table and it allows sellers to do important fix-ups so a property can justify (or even raise) its asking price.
To get one done in conjunction with your current real estate endeavours, don’t hesitate to call us today!