Beware the building inspector

Buying a house is terrifying. House hunting is difficult in any market but in the current market it’s basically the quick and the dead.

Once you find the right property, you have to perform your due diligence with lightning speed. We all know of stories of people being 99% the way there, another buyer swoops at the very last minute and the property is lost.

The one part of the process that often scuttles a sale is the building and pest inspection. The elation of finding the right home is often met with the horror of a written fault report on your dream home. Inspection reports even on the best homes never read well.

 Building inspectors have a pretty tough gig and the legal exposure for them is frightening. In approximately one hour they have to determine whether a building is structurally sound, if termites are present and if there are going to be any major issues in the future. If you read a report these days, it is basically one very big disclaimer with a few comments thrown in. In many cases the reports are useless. Recently my wife and I bought a house and we didn’t even read the report; I rang the inspector (who I know and trust) and asked ‘if you were me, would you buy it?’ he said ‘yes’. SOLD!

Every house in the country has faults that a building inspector will find. Common things we see are rising damp in walls, inadequate sub-floor ventilation, past termite damage, settlement cracks etc. Often people attempt to re-negotiate an agreed sale price because of these findings, which in my opinion is simply unreasonable.

My advice would be that the things you really need to look out for are major issues like structural problems, live pests and safety hazards. These are the things that can cost a small fortune to address and by addressing them you are not adding value you are simply restoring it. This needs to be factored into the price and I believe it’s reasonable to expect that.

If you are looking for the perfect home, you won’t find it. The best thing you can do is get a good inspector that you can trust and one that will talk to you. We are happy to recommend some – and we do not receive any kickbacks from any of them.

David Murphy owns an independent real estate agency in Sydney’s lower north shore – feel free to call ON 02 9968 2088 or email with questionsdavid@davidmurphy.com.au

 

 

'Tis the season

It’s that time of year again, where all of the promises we make to ourselves about how much we will eat (or drink) are forgotten, where busy families re-unite for a traditional roast meal on a scorching hot summer’s day and celebrate Christmas. What a fantastic time of year it is and probably the right time for most of us to remind ourselves just how lucky we are to live in this beautiful city.

Since starting my real estate career in 1999 this has been one of the most extraordinary years I have seen in the domestic property market. In December 2012, the property market was soft, average times on market were prolonged, clearance rates were hovering around 45% and the overall sentiment was negative.

What a difference a year makes…

2013 has seen the property market roar back to life. Self-managed super funds, overseas buyers and record low interest rates have helped to fuel a boom with new price levels being tested and an average clearance rate of around 80%.

Apart from fundamentals, it has to be said that there is something in the Australian psyche about the desire to own your own home and an un-waivering belief that property will always go up in the long term. The one thing I have heard all year is people saying ‘if you are going to live in it for a long time, don’t worry too much about the price.’

If you believe what’s in the media, 2014 promises to be another big year for real estate. SQM’s Louis Christopher has forecasted 15-20% gains for Sydney; and St George banks CEO George Frazis recently commented on prices saying ‘you have got to remember we’ve had 10 years of very subdued activity, particularly in NSW, so theres a lot of catch up occurring.’

One thing this year has proven is that predicting the future is impossible. But isn’t it nice to be heading into the season where friends and family take front seat and predictions on property prices fade into the background.

On a personal note I would like to thank all of my friends, family and clients for their support this year and wish everyone a very Merry Christmas and a safe and happy new year in 2014.

David Murphy owns an independent real estate agency in Sydney’s lower north shore – feel free to call ON 02 9968 2088 or email with questions david@davidmurphy.com.au