Handing over the keys

How to get your ducks in a row: Careful planning and a pre-purchase building inspection

After hunting high and low, finding that perfect home or property is an exciting and satisfying discovery but actually signing the deed and making the purchase can be a pretty stressful process. Once you’ve signed your name you’ll likely have the thought racing through your mind, “What if there’s something wrong with the place that I didn’t notice before?” Having a pre-purchase building inspection is an important step in relieving that anxiety but there are a whole lot of things you can do to protect yourself when buying a home.

Being organised and doing the groundwork is the easiest way can feel confident in your investment and ensure the buying process is as smooth as possible. Here are a few things to consider when it’s time to go unconditional:

Pre-approval first!

When you know that it’s the right time to dive into house hunting, you might want to consider seeking pre-approval from your bank or lender. That way, when you do find that perfect property, you are ready to go and won’t miss an opportunity. Unfortunately, getting that approval can sometimes be pretty tedious and time consuming. Lenders need to do a whole lot of background research into your finances, such as your income, credit history, and expenses.

With a pre-approval in place you’ll have a better idea of homes that are within your budget, saving you time and avoid disappointment later. Giving them the time they need to approve your loan request is a great first step when you embark on your hunt for your dream home.

Extend time for due diligence

Due diligence is your way of eliminating any doubts you may have and allowing the time to back out of the deal if you notice something’s not quite right. That’s why getting a comprehensive appraisal of the physical and financial risks of your potential new home is a really important step in the home buying process. While it’s ideal to get a pre-purchase building inspection before you make an offer, sometimes you just don’t have time when you are trying to swoop in on a great deal.

Extending the time for due diligence is your way as the buyer to safeguard your investment by giving you the time to get a building inspection company to review any potential risks and make sure that all your ducks are in a row. If they offer 5 days, request 10 (or even 30) to give yourself the time you need to get the most thorough review of the property that you can, as well as plenty of time to sort finances. There are so many variables that add or take away value from a house to consider. Having enough time will alleviate the stress.

Get a pre-purchase building inspection

You wouldn’t buy a car without popping the hood and making sure the engine isn’t about to fall apart, and buying a house shouldn’t be any different. But unless you know what to look for, getting a professional to check out the bones of a house and any structural concerns is your best bet at making sure you are aware of all factors impacting the value of your investment.

Having a pre-purchase building inspection will also make getting that final approval on your home loan a whole lot simpler and can help you negotiate on the price of the property if you do discover any significant issues.

Go out on a LIM

Local councils compile what is called a Land Information Memorandum (LIM) for your property – which is basically a record of information about a property including rates, building consents, developments of the property, and any potential risks such as flooding or erosion.

While you are likely to get a copy of the LIM from the real estate company, remember that they are representing the seller and their best interests. Make sure it’s a recent version and consider requesting one from the council yourself.

Get the Council Property File

Alongside your LIM, be sure to get the Council Property Files – the easiest way to compare what is on file at the Council to what you are looking at to buy. Property Files include construction plans if they’re available, although unfortunately due to the age of some properties and amalgamation of Councils, plans and documents can get lost.

Take the stress out of the home buying process and do some homework before you sign. Being organised and covering all bases is essential to safeguard your investment. Having a professional building inspector weigh in on the value of the property will rid you of any doubts and make buying your perfect home is exciting – not a pain in the neck.

Get a quote for your pre-purchase building inspection now.

Get a pre-purchase building inspection to make sure your pre-approved finance will actually come through – don't be fooled by old plumbing and a rusty roof!

Pre-approved finance: Avoid losing it with a pre-purchase building inspection

Buying a house can be stressful at the best of times. Often it feels like there’s so much going on at once, it’s hard to get all your ducks in a row and actually buy the home you really want. So thinking about a pre-purchase building inspection might not be the first thought on your mind!

However, the advice I give to new home buyers and seasoned investors alike, is to get pre-approved finance as early on in the buying journey as possible – and make sure that any home you’re keen to buy will be covered under that finance with a pre-purchase building inspection.

The last thing you want is to fall in love with a home, sink time and energy into making an offer, then miss out because you can’t get the right finance in time or because the house isn’t covered by your pre-approval.

What is pre-approval?

When we talk about ‘getting pre-approval’, it’s basically a guarantee from your bank that they will lend you money. Two forms exist: Initial pre-approval, and specific pre-approval.

Initial pre-approval may be acquired from your bank at any time, whether you have a house in mind or not—it’s basically just an expression of how much money your bank is willing to lend. For example, you may get a letter from the bank saying you have pre-approval up to $600,000, meaning you should limit your search to houses in that range.

Specific pre-approval comes when you have a house in mind. The bank will want to know details about the condition and valuation of the house, along with your income, expenses and history, and will make a decision based on this whether they will lend you money for the particular property you’re hoping to buy. This means that you’ll be able to leave the bank armed with a letter saying, for example, that they’ll loan you up to $575,000 for 12 Pond Street.

Why is it important?

Having pre-approval takes a lot of the worry out of buying a house, and gives you an edge over other buyers.

When the market is hot, sellers will often only consider offers from buyers who have pre-approval. Think of it from their perspective: They don’t want to enter into an agreement with someone who might not even be able to come up with the money—that’d be a waste of their time, with so many other willing buyers out there. Gaining pre-approval means a fast, easy purchase, putting you one step ahead of others in your shoes.

Pre-approval also helps you set boundaries. There’s nothing worse than looking at a bunch of open homes, falling in love with your dream house, then realising the bank won’t lend you money for it.

What can prevent pre-approval?

Plenty of factors affect gaining pre-approval: Your personal finances (incomes, expenses, type of employment, credit history, assets), the house’s valuation, and condition.

The majority of these are out of your control, but not the house’s condition. Often a house can seem like it’s in great condition aesthetically, yet have major issues lying just under the surface. That’s where a pre-purchase building inspection comes in. Some banks may not give pre-approval for houses that may have:

  • Roof issues (rust, significant leaking etc)
  • Old wiring and electrical board (these may require an electrical inspector to check)
  • Dux Quest plumbing (popular in the 1970’s, but found to have serious leaking issues)
  • Age (anything pre-1940’s may have specific criteria to meet, such as no scrim)
  • Foundations (houses made with old totara poles will typically suffer from rot)
  • Cladding type(some banks have specific criteria for high risk cladding types, such as cladding on a cavity system)

A good pre-purchase building inspection will quickly unearth any of these issues.

Taking the time to invest in having any potential future home thoroughly checked over can not only mean gaining pre-approval and an advantage over other buyers, but also saving unnecessary time wasting and heartbreak, should issues arise.

Rather than leaving a building inspection to be part of the mad rush before settlement date, get it out of the way nice and early, and make sure that your financial pre-approval is secured with a pre-purchase building inspection.

Get a free quote now.