Expert Advice for Anyone Buying a New Home

 Unless you’re a big-time investor, you probably don’t purchase real estate often at all. On average, people buy a new property every seven years, but it can often stretch into decades between drinks. As a result, it’s easy to feel unfamiliar with the process when you start looking on the market after a long absence. Choosing a building inspector is no exception.

When searching for an inspector and comparing the results, a natural response will be to choose the one that offers the cheapest rate. If you choose to take this road it may seem like you’re getting the same service regardless of cost – but you don’t know what you don’t know. You may never discover what you should have received without digging a little deeper. It’s natural to want the best price on a service, but don’t let it compromise the standard. Choosing an inspector on price alone is a quick way to land yourself in hot water.

You get what you pay for

As we’ve mentioned in some of our previous blogs, not all building inspectors are the same. Those emphasising bottom-dollar rates are often inexperienced and possibly unqualified – at the very least, they are giving you the bare minimum. The industry is also unregulated, which only serves to make the waters even murkier. 

The cheap inspector is probably either the one recommended by the vendor’s agent or the highest bidder – or the lowest, in this case – found through your Google search. You should already be hearing alarm bells if you find yourself in the first scenario.

The devil is in the detail

These inspectors commonly use a standardised report known as a Pre-Purchase Template, which contains a huge number of pages filled with endless disclaimer clauses, standardised comments and large photos – but a profound lack of useful information. When they do make a comment, it will be couched in such cautious, ‘don’t-sue-me’ language that you may very well read through the entire report without getting an accurate portrayal of the condition the property is in.

Remember: an inspection report is next to useless unless it’s thorough and unbiased. While you may make a small short-term saving on a cheap inspection, you could end up paying for it down the track in the form of unexpected repairs and maintenance issues. On top of that, any problems missed in the inspection report mean you are losing negotiating power that could potentially lower the price of the property.

To say men are strongly represented in the building inspection industry would be an understatement. According to the most recent data available through Job Outlook – an initiative of the Department of Employment – more than 89.6% of architectural, building and surveying technicians are male. The Workplace Gender Equality Agency tells a similar story, reporting that men make up 88.3% of the entire construction industry. Considering the total Australian workforce is over 46% female, these numbers tell a compelling story about the dramatic underrepresentation of women in the building industry.

To take a more anecdotal perspective, the building industry tends to attract the ‘blokey bloke’. While there are certainly building inspectors that show respect towards their clients regardless of gender, the unfortunate reality is that there are still too many who condescend or show off to their female clients. To put it more bluntly, misogyny is not uncommon in this male-dominated industry.

Society is moving forward, but some are lagging behind

Thanks to cultural shifts and the ever-evolving values of society, women are more involved in home purchase decisions than ever before. However, the building industry has failed to keep up with the steady increase in female home buyers, with rampant misogyny still affecting the accuracy and integrity of inspection reports.

The trouble is, it’s still imperative that home buyers get an independent building inspection. Committing to a purchase without this third-party knowledge runs a massive risk and could lead to significant financial losses down the track. As a result, women can’t afford to simply forgo an inspection – nor should they have to.

Taking a stance on sexism

Sexism in the workplace is not a newfangled concept, but it’s one that is taking far too long to stamp out. Such workplace cultures tend to both echo and effect the culture of society in general. Progress has been made over the decades, but there is still some ways to go, and it’s vital for individuals – particularly men – to take responsibility for their behaviour and that of others. This means setting an example for others to follow by taking a zero-tolerance approach; labelling something as a ‘joke’ or ‘just a bit of fun’ is no excuse.

From an inspector’s perspective, there is no place for judgements based on gender. Whether this be in the form of inappropriate remarks or assuming a lack of knowledge, it shows a distinct lack of professionalism and absence of respect.

For men in general, it’s important not to react defensively to the idea of sexism by distancing oneself from the issue. Acknowledging the existence of sexism is not about hurling accusations: it’s to take the first and one of the most important steps in the journey towards gender equality. This approach is much-needed both in the workplace and out of it.

Choosing the right building inspector

It should go without saying that misogyny has no place in building inspections, let alone any other setting. The building industry and men in general are ultimately responsible for a much-needed shift in attitudes towards women to ensure today’s female home buyers can remain confident that their gender does not affect the outcome.

It’s important to look for an independent building inspector with extensive experience, and not just because their reports are more likely to be accurate and unbiased. Generally, the more confident they are in their knowledge, the less they will feel the need to compensate by showboating or talking with condescension.

Employment of both genders and a significant amount of female clientele is a good sign that an inspector values equality. Talk to other home buyers who have had an inspection and encourage word-of-mouth referrals. Ultimately, the building industry will need to accept its downfalls and adopt a workplace culture that wholly reflects where we need to be as a society.

Standing in the living area of a two-bedroom apartment in Southbank, it quickly becomes obvious why this building’s residents are having trouble sleeping. The click, creak, click emanating from the walls is frustratingly persistent and enough to drive you mad during the day, let alone in the middle of the night.

During inspection, the culprit was found to be a loose section of roof flashing which vibrated in certain wind conditions. Add that to a stressed trussed roof system, loose panels and rails, a rattling extraction fan and several other issues, and you’re left to wonder how a two-bedroom property so plagued by poor workmanship could be sold for close to one million dollars.

During another inspection of a multi-story apartment building in Melbourne’s CBD, we identified incorrectly manufactured joinery used in the installation of the windows. This caused significant condensation on the sills of all aluminium windows throughout the apartment.

In this case, the builder advised the resident that the problem could be addressed by “opening a window to circulate airflow in the apartment”. However, excessive moisture was found, despite the window staying open for seven hours prior to the inspection.

Is this a sign of things to come?

These two cases are not anomalies. Sadly, they represent an increasing trend towards inadequate building practices in a city that takes pride in its architecture. In terms of both workmanship and materials used, ineffective industry regulations have allowed builders and developers to exploit home buyers and produce some of the worst buildings we have ever seen.

Builders Collective of Australia president Phil Dwyer spoke to the ABC, saying he believes the building industry is heading towards an "endemic failure" in the decade to come due to a focus on profits over safety.

“There will be so many defects and problems in buildings that we won’t be able to cope,” he said.

Aside from insufficient regulations, this exploitation continues to occur due to a lack of understanding on the part of home buyers. This could be attributed to inexperience, low expectations or a tendency towards accepting whatever is on offer, which is why a building inspection is so important.

Another explanation potentially lies in the perception that new homes, or even those bought off the plan, are not likely to have defects. As it turns out, the opposite is true on an increasingly frequent basis.

Awareness is a start, but not a long-term solution

While home buyers will benefit from unbiased building inspections and an improved awareness of the issue, the industry faces a challenge to turn the trend around as soon as possible. Some fear that any change may cause housing prices to rise even further, but the cost of ignoring safety could far exceed any monetary value.

 Real estate agents have long been plagued by a reputation for dishonesty, but is this perception well founded?

It’s worth noting that real estate agents are trained to not tell outright lies to home buyers. There are all kinds of laws that are drilled into new agents to ensure they don’t land in hot water, and they soon build an extensive understanding of what they can and can’t say.

The key is that instead of lying, real estate agents perfect the art of not telling the whole truth. Here are five examples of deceptive behaviour that you may encounter as a first home buyer along with an explanation of what the agent may really be trying to achieve.

Discouraging inspections for new homes

Many newly-built homes are pushed to be sold under the logic that a recent construction does not require an inspection. After all, new buildings would automatically meet all standards and regulations, right? On the contrary, more than 50% of new homes fail our inspections due to all manner of shortfalls. Don’t be fooled—always get an inspection from a third party regardless of how new the building is.

Clouding your judgement with flashy interior design

Hopeful first time buyers are often lured in by agents who dress up an interior in order to distract you from the more important issues. While the use of décor is a great way to demonstrate what can be done with the space, it can also make you forget the essentials and overlook certain factors, such as a lack of renovations or poor upkeep over the years.

Encouraging offers before the auction

Another classic form of temptation: some agents encourage potential buyers to make an offer before an auction without any intention of telling the vendor to accept it. This tactic is used to force the buyer’s hand and show their intentions, allowing the auctioneer to be fully briefed on who has offered what. As a result, the buyer is effectively set up and loses a significant amount of negotiating power.

Quote it low, watch it go

“…quote it high, watch it die”. This industry saying refers to the practice of agents “low balling” an expected selling price to draw larger numbers to an auction. Hocking Stuart in Richmond was recently fined $330,000 after misleading house hunters by significant amounts in order to build audiences at upcoming auctions.

Generating urgency

Been told that another buyer is interested in the same house? While there are certain laws pertaining to this area, real estate agents who are able to choose their words carefully can falsify this information and push you towards making an offer than you otherwise wouldn’t. It’s possible that there is another buyer, but keep in mind that the agent could be trying to take you for a ride.

Why Home Buyers Can’t Rely on Consumer Protection

From an overall standpoint, Australian consumers are strongly protected by legislation. Common law is designed to cover all manner of contexts, while many different policies have been introduced by the Government to support specific industries. But bureaucracy often stands in the way of these measures, leading to exploitation of the process and a system that is far less favourable to the home buyer than it should be.

What’s in place to protect home buyers?

Building industry regulations such as the Home Owners Warranty policy have been introduced in an effort to protect home buyers from defects in newly constructed buildings. However, despite the positive intention of this industry-specific legislation and general consumer law, most measures are poorly implemented or subject to manipulation. In practice, they do not favour the home buyer in a system that is already stacked heavily against them.

Warranty claims are a maze not worth navigating

One of the major problems for home buyers in regard to these regulations is the difficulty involved in submitting a claim to the builder or their insurer. Most builders and insurance bodies are experts at dealing with claims and, on the balance of probabilities, will be more prepared to deal with the complaint process than you are. Through a combination of defence, avoidance and other abuses of process, they commonly wear home buyers down to the point where only the most resilient and vigilant complainants achieve any sort of outcome after a long and arduous battle. Even those who push on through the procedures and reach a result often wish they had never tried in the first place.

Don’t be fooled by newly constructed homes

Many house hunters assume that building inspections are only necessary for older structures. After all, new buildings are always constructed according to current standards, right? Wrong. While there are comprehensive standards in place to ensure buildings meet a certain standard, there are many instances where even new homes have been sold for far more than they are truly worth due to shortcuts or loopholes in the building process. Many first home buyers get excited at the prospect of owning their dream home that they sign on the dotted line only to find that they have to spend thousands rectifying defects they weren’t initially aware of.

How a building inspection can save you the trouble

Despite everything, it isn’t all doom and gloom. Defect reports from an independent building inspector are an extremely powerful negotiating tool in the buying process, and can allow you to purchase a home at a price that reflects its shortcomings. These extra savings in your pocket can then be used to pay for any rectification work yourself.

If you choose to take on the system with a claim and are lucky enough to succeed, you will ultimately achieve a similar outcome—but not without the time, money and frustration involved in submitting a claim. Being proactive with a building inspection puts you in a position to either negotiate a fair price before making a purchase or turn your back if the vendor won’t budge.

Buying your first home can be a nerve-racking mix of high hopes and utter trepidation. It’s a huge investment and a significant milestone, so it’s a given that you’ll be experiencing a whole range of emotions. Among all the excitement, you may not realise how heavily the real estate system is stacked against you: there’s much more to it than saving for a deposit and hoping your offer gets accepted.

While it may feel like a fair and balanced process, everyone involved has a vested interest and is out to get their slice of the pie. That smiling real estate agent with the firm handshake and friendly banter? It’s easy to forget that they are trained in the psychology of sales and acting solely on the best interests of the vendor and themselves. Combine this with all the costs associated with stamp duty, vendor advocates, legal services and other fees, and you could end up paying far more than the true worth of the property.

Why you should never skip a building inspection

First home buyers often get swept away by the opportunity of owning their ‘dream home’ and end up signing on the dotted line without an inspection only to find out the roof has an unrepairable issue that’s invisible to the untrained eye. With an impartial report in your hand, you can make a sound decision that isn’t clouded by your emotions.

And you must take care to choose the right inspector. When it comes down to it, an experienced building inspector is the only party that’s truly impartial in the home buying process. An inspection gives you an honest appraisal of the property that cuts through the buttered-up sales pitch offered by an agent and provides you with an accurate and detailed summary of the structure’s condition and its present and future repair and maintenance costs.

More than 50% of new homes fail our inspections

Let that sink in. Inspections apply as much to brand new structures as they do to old ones, especially since many building contracts are awarded to the building team with the lowest bid. New homes are often failed due to structural faults, failure to comply with building codes and all manner of other issues, so don’t always be fooled by the dazzling packaging!

A building inspection comes with a fee, of course, but the report could give you the bargaining power you need to knock thousands off the asking price during negotiations. It may also be the only thing that protects you from making a dud investment and gives you the chance to turn away before it’s too late.

Booking a pre-purchase building inspection is a no-brainer and anyone would say that they want to choose a professional that they can trust. That said, you’re likely to encounter varying rates between providers after a quick Google search and a few phone calls, and it can be hard to know what the difference is between them all. While there can be a number of variables between inspectors, it can all be broken into four major concepts.

Quality of the report

Typically, cheaper building inspections include much less information so that the provider can reduce their overheads. These reports are often evasive, non-committal and potentially useless if they overlook key issues, which is why you should seek a provider that can produce a detailed report at a competitive price.

Time taken

A quality building inspector should offer a fast turnaround time on their report and even allow you to come along during the inspection. Spending less on an inspection often extends the time it will take to finalise the report after the property has been examined.

Negotiating power

An added advantage of a building inspection report is that it can allow you to negotiate the purchase price based on the estimated cost of any repairs that may be required. The more detail in the report, the more authority you’ll have during negotiations.

Long term costs

If you choose to sacrifice quality and go for the lowest bidder on a building inspection, there’s a chance the report may overlook current or potential problems with the structure. As a result, you could go through with a purchase on the impression that no work is required only to be faced with costly repairs down the track. Quality reports often pay for themselves by picking up any issues early on and giving you the information you need to look the other way or negotiate a new price.

Consider price matching

It’s still easy to be tempted by a lower price, especially when the level of service appears to be similar. The good news is that some providers — including Building Masters Inspections — will be able to beat the price offered by qualified competitor. If you are given a cheaper quote for an inspection that offers a similar level of service to our own, send it through along with a sample of their report and they will not hesitate to beat it.

If you take the time to do your research instead of jumping the gun and booking the lowest bidder, you’ll improve your chances of receiving a high quality report at a price that you can fit within your budget.

Like most things these days, when we need a professional service or product we turn first to the internet. As a near infinite depository of information, you’ll always have access to a comprehensive list of reliable businesses from which to choose from. However, how are you supposed to know when a business is reliable or not? Just because they have a flashy looking website, compelling content and appear on the first page of your search engine, doesn’t always guarantee the integrity and professionalism of their service.

When it comes to building inspectors, as this is an unregulated profession, you will find that many ‘inspectors’ are unregistered and incompetent. This undoubtedly makes choosing the right business challenging, but not impossible. If you’re having difficulties choosing from all the service providers available online, then there are a few things you can keep an eye out for to make sure your inspector isn’t dodgy.

They call it cheap and nasty for a reason

If you’re only basing your decision on which service is cheapest, then you might as well not get an inspection done at all. Most of the cheaper services are priced so low because they can’t get business any other way. An unaware and prospective home buyer enlists their services, pays them, and doesn’t realise the report they’ve been given is unreliable at best, until they discover the defects for themselves.

Don’t get suckered in by the appealing price tag, you’ll only end up paying for it later. A mid to high priced inspector may cost you more initially, but you’ll inevitably save considerably more when they help you to negotiate a lower asking price for your dream home.

Does your inspector of choice let you tag along?

Services such as Building Masters Inspections will let their clients join them on the day of the inspection to give them a first-hand account of any defects they find. Not only will this allow you to ask any questions you might have and make the most of their expertise, it’s also an indication that they’re serious about their work, and a seasoned professional.

Worst case scenario

Many home buyers have found themselves trapped living in a defective home paying for problems that their inspection report failed to identify. This happens when the inspector is either too inexperienced, lazy, or simply doesn’t know what they’re doing. Don’t become trapped by your dream home. Enlist the help of an expert.

 It’s understandable that when you’re purchasing a new property, you want to limit the expenses as much as possible. You’re already paying for costs such as stamp duty, legal fees, surveyors and other possible services and this amount is not even factoring in the deposit you’ve just paid for your home loan. It is because of this that many home owners forgo having a building inspection conducted prior to purchasing their property. This is the biggest mistake you could make however, as you’re much more likely to have to spend more in the short, medium and long run when potential defects force you to invest in costly repairs or renovations.

 Spending a little now, to save a lot later

 In comparison to some of the repairs needed to fix structural or irreversible damage to your new home, the cost of a competent building inspector pales in comparison. With many service providers offering competitive and very reasonable rates, you’ll be able to enlist the assistance of a professional with the years of experience necessary to offer a comprehensive inspection.

 Spending this comparably small sum in the beginning, could prove immeasurably beneficial should the inspector uncover serious defects such a termite infestation or hidden structural distortion. This forewarning then puts you in the favourable positon of being able to negotiate a lower asking price for the property, or force the current owners to cover the expenses of any repairs before you buy.

 The money you save can then be spent on turning your house into a home

 Many first home buyers and families only ever have enough savings to cover the deposit for their home loan and the first few repayments. Sometimes they might have a little extra to serve as a safety net should any unforeseen complications arise. This extra play money is instantly compromised however, should a property be purchased without having first booked a thorough inspection. Any plans to add an extra room, build a pergola, install new flooring, or landscape the backyard will be replaced by the expense of fixing faulty wiring, damaged or cracked foundations, leaks, or any number of other common home defects.

 The most important thing to remember is: don’t be reactionary towards defects, be proactive and identify them before you’re stuck paying for them.

Buying a new house is a daunting prospect at the best of times, especially if it’s your very first property. Many young couples for example, tend to feel that the entire home buying process is stacked against them – which it is. Every professional involved in the process, from lawyers to conveyancers, buyers to vendors and real estate agents, are all interested in one thing and one thing alone – making a profit. If they are successful in convincing you to purchase a property then they stand to make a commission and at the end of the day, this is their primary objective.

Building inspectors on the other hand, have no such biases and are purely concerned with doing the right thing by the potential home buyers. They are obliged to be forthright with their findings and completely transparent with any reports, meaning you get the truth and not some over inflated sales pitch. A building inspector still gets paid the same regardless of whether the property is sold or not, which means they stand to gain nothing by misleading a home buyer.

Don’t let the agent talk you out of a property inspection

It’s an unfortunate reality that many real estate agents convince home buyers to forgo a property inspection in an effort to score a higher offer. It is in their best interest to get as much money as possible for any given property, but their ability to do so is jeopardised if a building inspection reveals any defects.

Keep in mind that almost all new houses have defects due to young or inexperienced builders who are still learning as they work on any given property. A professional building inspector is likely to identify 15-20 defects on a new house, whilst older houses may have as many as 20-30. These issues can include issues with asbestos, poor wiring, inferior light fittings that are a fire hazard, termites, and mould, just to name a few.

Once a home owner becomes aware of such defects, and they have a more comprehensive idea of how much it will cost them to get them repaired, they are automatically in a better position to negotiate a more favourable price. This is something that the real estate agent would prefer to avoid.

Why you’ll never find a reliable building inspector without grey hair

Many young building inspectors are too scared to be completely honest in their inspection reports regarding certain defects for fear of being sued. This is why it’s important to choose the older, veteran inspectors who have the confidence and the experience to offer a comprehensive and brutally honest evaluation.   

 

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TESTIMONIALS


Hi Mike,

Thanks for your help yesterday. If it wasn’t for you we would have been saddled with a lemon. We have exercised our right to withdraw in the cooling off period and barring any other tricks we have hopefully managed to save thousands of dollars. We feel like we’ve learned a bunch and will most definitely be using your services again in the future (and telling all our friends!).

Thank you very much,
Sincerely,
Cameron 

 

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