Why is a Building and Pest Inspection Important Before Auction?

Building and Pest Inspection is amongst one of the critical things to check when buying your home or investment property in Melbourne. It is especially critical to have the building inspected before an Auction, if you intend to buy at auctions.

In this article, our buyers advocates will explain what is a building and pest inspection, how much it typically cost in Melbourne, and ways to save on unnecessary costs.

Why is a Building and Pest Inspection Important Before Auction?

A building and pest inspection is crucial before an auction to uncover defects, protect you from costly repairs, provide information for pricing. It is also to ensure you understand the property's true condition before making a legally binding, unconditional bid. An auction sale in Melbourne in unconditional, has no cooling-off period, making a pre-auction inspection essential for an informed and safe purchase.

From experience, between 80-90% of the properties will come with issues. Even brand new houses are not immune to problems. While most issues are minor and cosmetic in nature, some could be serious structural issues, which will have safety and liveability implications.

What is a Building Inspection?

A building inspection is an inspection of the building structure performed by a licenced and certified building inspector. The inspection ensures the building meets the applicable building standards and health and safety conditions. The inspection will identify issues and defects with the building which buyers must know. Major, structural defects and safety concerns will be identified while the more diligent inspectors will also identify minor and cosmetic issues in their reports.

What Does a Building Inspection Cost in Melbourne?

In Melbourne, a Building Inspection usually cost between $400 - $700, depending on the location, and size of the property. It is a very competitive market in Melbourne, prices will vary and the better inspectors tend to command a higher fee.

What is a Pest Inspection?

A pest inspection is a detailed, methodical and careful examination inside and outside your home by a licenced and certified pest inspector. The inspection will identify pest issues such as termites and burrowing insect in the building. These infestations can usually damage the structural integrity of a property, if left undetected and untreated, making the building to be unliveable.

What Does a Pest Inspection Cost in Melbourne?

A typical Pest Inspection in Melbourne cost between $300 - $600, depending on the location, and size of the property. Again, because it is a free market, prices vary and the better inspectors tend to charge a higher fee.

What is a Combined Building and Pest Inspection?

A combined building and pest inspection simply means the building is inspected for both building defects and pest concerns at the same time. It is increasingly common for inspectors to be certified and licenced for both building inspection and pest inspections.

What Does a Building and Pest Inspection Cost in Melbourne?

If both the building and pest inspection are conducted at the same time, the combined inspection usually cost less than 2 separate Building and Pest Inspections, as the same inspector will only need to inspect the property once for both concerns. The typical cost of a combined building and pest inspection in Melbourne ranges from between $700 to $900, depending on location and size of the property. The inspector's experience and attention to details plays an important role in determining the quality of the inspections. The good inspectors may charge more, but they are worth every cent you pay.

Quality and Experience of Inspectors Matters more than the Price

The quality of inspections varies widely from bare minimal reports to over hyped inspectors featured on social media. Remember, experience and time is money, and being expensive does not necessarily mean you will be getting a better job. You could be paying for the social media editing time. Similarly, beware of cheap inspectors charging peanuts.

In our line of work as buyers advocates in Melbourne, we had the opportunity to read hundreds of reports from various inspectors, from $400 inspections to $800 inspections. While it may be more budget friendly with cheap reports, they are usually not worth the paper they are printed on. The building and pest inspection industry is quite competitive in Melbourne, and you get do what you pay for. Quality and details are usually the reasons why they can afford to charge more.

In our 80+ years of property investment and buying experience, our buyers advocates only rely on a handful of tried and tested inspectors to do the job for our clients. They are usually not the cheapest, neither are they the most expensive. But we have the confidence that they will get the inspection job done properly.

What Happens when Issues are Found During Building and Pest Inspections?

We always expect that we will find issues during the building and pest inspections. Perfect buildings do not exist. I'll be questioning our inspectors if they are not able to find any issues during the inspections.

When issues are found during the inspections, it is not the end of the world. You need to read and understand the report. The report will identify issues ranging from minor cosmetic issues to major structural problems. How you manage this information is important. These inspection reports should determine if you go ahead with buying the property, and how much you offer for the property.

Most experienced buyers will use the information provided in these report to assess if it is still worthwhile buying the property. Using their experience, they would have an idea of how much the property is worth, considering the issues highlighted in the report. The cost of repair will also play an important part in this decision.

What Does it Cost to Fix Issues Discovered in a Building and Pest Inspection?

The cost to fix issues discovered in a Building and Pest Inspection report varies. Some are relatively cheap, while some could be costly repairs. The seriousness of the issues also bears no resemblance to the cost of repairing those issues. It all has to depend on what the issue is, how it should be properly rectified and the consequences of not addressing it can be.

What Does it Cost to fix a Minor Defect?

Most minor issues can be cheap to fix, but some can be costly. For example, the report might indicate minor, cosmetic cracks on the walls. Most of these cracks are no more than a few hundred dollars to repair. But if there are several of these cracks, it can add up quite quickly. Another example, is the condition of the paint. While the condition of the paint is usually reported as a side-note, not a defect, it can easily cost between $10,000-$30,000 to have an entire house repainted.

What Does it Cost to fix a Major Defect?

Similarly, a major defect need not be expensive. While some can be cheap to fix, some can be costly or not worth repairing. For example, a major defect can be a weakened foundation. This can easily cost between tens of thousands of dollars, to over hundreds of thousands, depending on what is wrong and what is required to address it. Conversely, an issue with the roof and gutters may sometimes be flagged as a major structural issue, but could cost no more than a few thousand dollars to repair.

How Had Building and Pest Inspections Saved Our Buyers?

In our decade long experience as buyers advocates, we had seen countless examples of how building and pest inspections had saved our clients from trouble.

Case Studies. How have Building Inspections Helped our Buyers.

Every building will have some form of issues. Through building and pest inspections, some significant examples highlighted includes:

1. When is a Three Bedroom House a Two Bedder? This buyer came to us when they realised their mistake after making an offer for a 3 bedroom house in Rowville, a south eastern Melbourne suburb. Our on-site inspection flagged a suspicious looking bedroom, which our building inspector subsequently confirmed as an illegally built 3rd bedroom. There is no way to rectify it as it was not built to building code. The dimensions of the room are non compliant, there is insufficient insulations and no proper heating and cooling. As a result of this major issue, it triggered an avalanche of events which eventually allowed our client to walk away from the purchase without any penalties. This was about 10 years ago, and rectifying this would easily cost around $100k, or about $200k in today's money.

2. A house with a broken roof truss. This house in the eastern Melbourne suburb of Ringwood was newly renovated and looked dressed to sell. Our client initially wanted to save some costs, and did not agree with our recommendation to have the building inspected. But we managed to convince them otherwise. A detailed inspection by our trusted building inspector revealed a major structural issue. A major roof supporting structure has snapped, suggesting the roof had either suffered a major impact or there are other major shifts in the load bearing structure in the house. To have this properly assessed by an engineer and repaired by a builder would cost between $100,000-$150,000. Vendor insist the building is safe and refused to accept the report. We walked away. The building was subsequently sold to an unsuspecting buyer.

3. Leaning Townhouse of Forest Hill. This 20 year old 4 bedroom townhouse in eastern Melbourne visually looked dated but it otherwise looked structurally OK. However, a building and pest inspection revealed that the entire townhouse was tilting to the left. This was reported as a major structural defect and we walked away successfully. The inspector was unable to estimate the rectification cost as this repair work was major and would involved the body corporate. The entire complex of 8 other townhouses need to be assessed. We chose not to get involved and we walked away from this purchase.

What if You Do Not Have The Experience to Understand the Report?

As part of our full property buying services, we will help our buyers understand the report, highlight the major concerns, estimate the cost of repair, and recommend if we proceed with the purchase. If you do not have privileged access to these information, you can discuss this with your inspector. An experienced inspector would have a good understand of the extent of the issues, how the issues should be addressed properly to meet the building, health and safety standards, etc. Good inspectors would also give you an idea of what it will cost to have the issues rectified.

Time to Move Ahead?

Book a strategy call to discuss how our property buying services in Melbourne can help you reduce the cost of unnecessary building and pest inspections. Our buyers advocates are builder-trained and we include a preliminary check on the building as part of our Property Appraisal at Open for Inspections. Our independent appraisal gives buyers a realistic value of what the property can sell for during Auctions, giving buyers the confidence to attend and bid at auctions, knowing they will not overpay.

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