For anyone wanting to buy a house, having a building and pest inspection conducted is wise – after all you don’t want to buy a lemon. However, a report could also flag problem areas that could help you to bargain down the asking price.
When looking for a home to buy, it always helps to look for ways to negotiate the price down. That’s when it can be handy to have a completed building and pest report. If you find problems with the property such as wet areas that are not watertight, structural issues, non-council approved work or past termite activity, you can use this to show the property isn’t worth the purchase price and ask for a discount.
After purchasing a property, buyers have little legal protection, so if you find termites a few weeks after moving in, the previous owner may not have any legal obligation to fix it. Although there is an upfront cost for the inspection, it will be well worth it down the track.
As a buyer, the better you understand the inspection report, the better chance you have at negotiating the purchase price. If you really want to be ahead of the game, you can call the inspector right after they have visited, so it will be fresh in their mind and they will be able to answer any questions you have and clarify any issues. This way, you will not get lost in the terminology and when you go back to the real estate agent, you can make your argument confidently.
Quick Tip: Search Online
It is also important to pick a high quality inspector. You may search on the internet and find a company with a great website, but do they have any qualifications? Your best bet is to dig a little deeper to ensure they are qualified, registered and also have insurance.
If you are buying a property as an investment or for yourself, one of the biggest risks would be termite infestation. These little creatures can cost homeowners thousands of dollars and in really bad cases, may result in the building being torn down. So this problem can be used as a great bargaining tool, but it is important to weigh cost versus benefit. However, some buyers look for properties they can renovate, so finding termites may not always be a bad thing for them. If they are already planning to pull the house apart, then the termite problem will help reduce the property price even more. In this case you would probably have to fund the property outside mainstream lenders as most will not use a property as security if it has termites. Renovators need to work closely with their lenders if they are buying very dilapidated properties to improve.
It is always worth going back to the real estate agent to ask for a discount no matter how big or small the problem is. It is highly likely that most properties will have something wrong with it, but it is up to you to use it to your advantage.
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