• Daniel Hooper


This week we are looking at the potentially stressful Building & Pest Inspection and how best to handle it.

Building & Pest inspections (B&P) are a regular part of the property game in Australia with hundreds happening every day across the country. I am sure most of our readers will be familiar with the B&P inspection process but put simply the idea behind the inspection is to protect the purchaser from any unknown issues the property may have such large problems like termites, wood rot or cracked stumps all the way through to leaky taps or windows that do not close properly.

The problem that we have found with the B&P inspection is the drastic difference that can be seen between the judgment and standard of work from one inspector to the next. Some inspectors have a wealth of knowledge and give un-biased and clear information for the buyer to use to finalise their decision while other inspectors we have encountered are rude and seem intent on making the property fall through by delivering advice to the buyer that contradicts builders and even QBCC advisors.

When you are preparing to sell your property you need to ensure that you do as much as possible to prepare yourself and your property for the B&P inspection so that there are no issues and you can proceed with your sale to the happy buyer! Below are seven key “must do’s” to make sure you avoid the nasty situation of a sale falling through due to B&P!

1. Deliver a good product!

This is by far the most important of the seven points. Make sure when you are completing your project that you do not cut corners and that you complete all of the tasks up to code and to a good finished product.

It is important to note the difference between the “finish” and a “good product”. The grade of finish should match the price range of your house. For instance; if you want to sell your property at $500,000 you will not apply the same level of finish as a property to be sold for $1,500,000. When we refer to a “good product” we are stating the your home should be completed to a professional standard with the proper materials and fittings suitable to ensure it is functional and looks good.

We have mentioned a number of times the importance of using qualified trades and this becomes especially obvious when you are dealing with your B&P inspection. If you have had the work done by licensed trades and you have all the forms and documents you are much less likely to have any issues from the B&P inspector.

2. Be Open and Pre-Empt any potential issues

When you are selling an older property that you have renovated, it will never be a perfect product due to the fact that it is not a brand new home. It is extremely important to be aware of the potential faults and issues with your home and to handle these issues during the sales process. If you do not discuss the issues during the sales process then you buyer will almost certainly use them to ask for a price reduction or worse they may cancel the contract entirely!

This Home Had a Treated Asbestos Roof

Any potential issues that could be found during the B&P should be discussed during the contract negotiation so that you know when the buyer puts pen to paper they will be proceeding with the purchase. Finding the right time to mention the faults is a delicate process but you must let them fall in love with the home first and make sure you mention the issues before the B&P inspection takes place.

We have put this process into action a number of times on our own projects across various different issues. Two of our properties have had old “super-six” asbestos roofs which we have had professionally cleaned, sealed and re-painted instead of being replaced. This was an issue with a number of potential buyers but when we found the right buyer they were aware of it early, which meant we had no issues with the B&P and were able to proceed with the sale. Our last project in Brighton also had a significant amount of termite damage when we purchased the home but we employed a good builder to fix all of the damage and then made sure the buyer was aware of the extent of our repairs prior to the B&P, once again the sale went through without any issues.

3. Be prepared for the inspection (forms and documentation)

When you are preparing for your B&P it is important to ensure you have all of the relevant forms and documentation you need to back up any works you have done. A good example of this would be your plumbing and electrical forms, insurances or asbestos removal certificates.

On our last project with the significant termite damage we decided, as an extra assurance to the buyer, that we would install a termite baiting system on the property that came with a $200,000 warranty. By spending $3000 on this system we were then able give these documents to the buyer and get around the concern and potential objection buyers might have of recurring termite damage in the property.

4. Be present for the inspection

We believe this is a really important point. If you are not present for the inspection and you just allow the agent (if you use one) to take the B&P inspector through this means that you are not able to have any discussions with the inspector and you will not have the opportunity to show your relevant forms or documentation. There are times where there may be a relatively simple explanation for something but if you are not there to answer the question so an assumption will be made that could potentially lose you a sale.

5. Do not argue with the inspector

This point follows on nicely from the previous point. If you are present for the inspection do not argue with the inspector what ever you do. We have had a number of B&P inspections done on our properties during which the inspector has made observations and references to building code that were flat out wrong (later confirmed by our builder).

However, one of the worst things you can do is start a confrontation in front of the buyer. If there is a point you do not agree with make sure you confirm your point of view via your own trades or through the QBCC and prepare your documents and share these with the buyer. If there is a mistake that you believe the inspector has made it is a good idea to ask the buyer to get a second opinion from their own trade or expert.

6. Be reasonable and open to fix any issues that arise

If, during the B&P inspection, there are issues or problems that arise that you were not aware of it is important that you look at this as an opportunity for you to fix these issues and deliver a properly finished product. It is important to keep in mind that if you do not repair the issues then the next B&P inspector will probably find them and you will end up potentially losing another sale.

If any problems arise first discuss the issue with the buyer and check if they want them fixed or some might want a price discount. Once you understand their position you can look at the issues and work out whether you will fix them or if you do not have the time/inclination maybe you just accept the price discount and move forward with the sale.

It is quite rare that a buyer will just pull out of a contract without any negotiation unless there is an issue with the house that they believe has compromised the entire property such as termite damage, rot or structural damage.

7. Stay calm and do not worry

The last point is just to stay calm and remember this is a normal part of the sales process! B&P inspections can be a stressful process, especially if you are needing to sell your home urgently, but if you have completed a good renovation and stuck with all of the six points above you should have nothing to worry about so stay calm, have a cup of tea and let the B&P inspector do his work!

Thanks so much for reading this week!

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