How to have the upper hand in negotiation and save potentially thousands off the asking price...

NYPD Expert Series with Paul Antonelli

When it comes to purchasing a property, it’s not as simple as finding an existing dwelling that fits the bill, and signing the contract of sale.

Potential issues such as faulty hot water systems, worn foundations and re-stumping requirements, and deteriorated copper and sewer lines are all common problems. Whilst these issues are not immediately obvious to a buyer, they can prove financially devastating after the deal is done.

As a New Young Property Developer, it’s really important to be aware of ALL incidentals and defects on a property that could incur future costs. That’s why undertaking a property inspection is a critical step in the buying process.

Not every defect will be a show-stopper, but awareness of their existence allows you to plan for repairs and also leverage them during the negotiation process.

The better prepared you are before reaching the negotiation stage, the more likely you’ll score a good deal on your new property. And with a property inspection report up your sleeve, you’ll have the upper hand when it comes to signing the final contract of sale.

NYPD caught up with Paul Antonelli from Resicert to find out the nitty gritties of property inspections.

Paul is an expert Property Inspector, and provides a range of property inspection services for builders, vendors, buyers and investors.

We asked Paul some pertinent questions about property inspections, including when to initiate one, the structural problems and other issues that are commonly revealed, and how to choose the right property inspector for your potential purchase.

1. When should a purchaser initiate a property inspection?

A property inspection should be organised when a person decides to purchase a property and an offer has been put forward. Allow sufficient time for the inspection to take place. I would recommend at least 7 days.

To ensure that a purchaser has the right to undertake a property inspection, the purchaser must include an appropriate clause in their offer to purchase. This will make the purchase of the property conditional on a Pre-purchase Building Inspection and a Timber Pest Inspection to the satisfaction of the buyer.

2. What type of property inspections are necessary during this process?

The minimum property inspections that should take place before purchase are a Pre-purchase Building Inspection in accordance with AS4349.1, and a Timber Pest Inspection in accordance with AS4349.3 (which are compliant with Australian Standards).

Optional inspections to consider depend on the property, and also depend on specific concerns of the purchaser, including a Pool Safety Barrier and Condition Report, an Electrical Inspection, and an Asbestos Audit.

3. Can you identify some of the most common issues that result from conducting these inspections?

Having conducted over 10,000 inspections, we have come across many common issues. Key concerns that tend to have a higher cost impact for the purchaser include:

• Live termites in the property
• Termite damage to timber work
• Structural issues with the roof and sub-floor
• Sagging ceilings
• Leaks in the roofing cover
• Incorrect and unsafe electrical wiring
• Add-on structures that are not structurally sound
• Foundation settlement issues resulting in excessive wall and floor cracking

For the cost of a property inspection, identifying any one of these issues will avoid thousands of dollars in unexpected costs.

4. What is the average cost of having a property inspection completed? And typically, what are the potential savings of having a property inspection carried out?

The cost for inspections varies as do the cost of all services. The quality, thoroughness and professionalism of the inspector is of utmost importance.

Generally a Building Inspection takes approximately 1 to 2 hours to complete. The average cost at a minimum quality in accordance with the standard will range from $500 to $800 depending on the property and what is included.

A Timber Pest Inspection takes approximately 1 to 1.5 hours to complete to a minimum standard, and will range from $250 to $400.

Be aware that many companies offering Timber Pest Inspections are pest control companies. They may not execute the inspection to the required standard, and may be more interested in selling a pest control solution. This is an important potential conflict of interest to be aware of when engaging a Propery Inspection expert for a Timber Pest Inspection.

5. What questions should a buyer ask their Property Inspector before engaging them to complete the inspection?

• What qualifications or expertise do you have in order to carry out property inspections?
  For example, at Resicert, our inspectors are fully trained and licensed building inspectors, with chartered professional engineer support.
• Do you have professional indemnity insurance to cover all your inspections?
  To compare, at Resicert we have $3 million of insurance for all our inspections for your added peace of mind.
• Do you provide a detailed written report with photos as part of your service?
  Our report format is recognised as one of the best in the market – clear, concise, and understandable with full colour photos.
• Do you offer a money back satisfaction guarantee?
  
• Do you have client testimonials that I can review?
  
• Do you actually go into the roof space and climb up onto the roof as part of the inspection?
  At Resicert, this is a critical part of the service. If there are issues this is often where they are found, and it’s essential to inspect these areas where possible.

Arranging a professional building and pest inspection on a potential property deal is a must. It’s a minor cost of doing business that could save you major financial heartache in the long run. And it’s important in preparing for a negotiation process that secures you a good deal.

Paul Antonelli has built a successful business called Resicert with a number of different locations right around Australia. For more information, please visit their website for a free quote and download a sample report www.resicert.com

Alternatively, you can give them a call on 1800 737 423