Auction: who pays for building and pest inspection
Whether you’re buying a home at auction or through the usual processes, it’s important to get a building and pest inspection. It ensures you’re making an informed decision about the property – prior to placing a bid.
Why is it important to get a building and pest inspection before auction day?
Buying a house at auction is more complex than buying through the usual process of the sale of treaty or tender. With sale of treaty or tender, potential buyers have the option of putting an offer on the property subject to certain conditions. Often, these conditions include getting approval for finance and a building and pest inspection.
In an auction, this process becomes more complex for two reasons. Firstly, any bid on the day is considered legally binding. This means that unless you state at the time of making a bid that the price you’re willing to pay is subject to certain conditions, it will be received as an unconditional offer. This means you must buy the house no matter what – regardless of whether you get approval for finance or if there are issues with the building.
That’s why it’s important to have a pre-auction building and pest inspection before auction day. It ensures you know exactly what condition the building is in - prior to making a bid. You don't want to buy the property at auction only to find out there are major issues you can't afford to repair.
Building and pest inspection
Regardless of how you’re buying a property, the building and pest inspection is the same. It is a thorough visual inspection of a property to determine its current condition.
Firstly, a building inspection looks for any major or minor building defects, safety hazards or other issues that affect the livability of the property. Secondly, a timber pest inspection looks for any evidence of termite activity or damage. It also checks the home's current termite management system.
During the inspection, the building and pest inspector will also use a thermal imaging camera and moisture meter. The thermal imaging camera detects significant differences in temperature using infrared technology. Abnormal hot/cold patterns often indicate termite activity or moisture issues like a leaking shower. Whereas, the moisture meter helps identify high moisture readings within the property. Moisture problems are often serious and costly to repair. Likewise, termites are highly attracted to damp areas.
Finally, the inspector will collate their findings into one report and send it to you within 24 hours of the inspection taking place.
Who pays for the auction building and pest inspection?
It can be confusing about who pays for the building and pest inspection for an auction. Ultimately, it is the buyer’s responsibility to do their due diligence before purchasing a property – including at auction. The vendor (seller) is not obligated to provide a building and pest report for bidders on the day of auction and buyers are bidding on the property as they see it.
If the bidder wants to make sure the house is in good condition prior to purchasing (in this case placing a bid), it is their responsibility to get a building and pest before auction day. Therefore, it is typically the buyer who will organise and pay for the building and pest inspection.
What happens if the seller already has a building and pest inspection report?
On occasion, sellers get a pre-sale building and pest inspection and will have that available for bidders to view on auction day. However, we don’t recommend relying on this report for two reasons:
1. It doesn’t give you legal recourse should issues arise
A building and pest report is a legal document that is recognised in a court of law. This means that should you move into the property and find defects that should have been reasonably seen by the inspector, you can take legal action. However, this option is not available if the report is not in your name as you are not the legal owner of the report. That person is the one whose name is on it. Some building and pest companies are willing to offer a re-sale of the report to change the name on the report if it was completed in the past 4 weeks.
2. It doesn’t give you an unbiased opinion of the house
Understandably, both the selling agent and the vendor want to present the house in the best possible light to get a good sale price. Whilst most are honest, some vendors and agents have been known to deliberately cover up issues or withhold information. In fact, real estate agents in Queensland are under no obligation to disclose information regarding the condition of the property. It sounds crazy but it’s true. A building and pest inspection gives you a professional builder’s opinion of the house that you can trust.
The benefits of an auction building and pest inspection
A building and pest inspection is the best form of insurance you can get when buying a new property at auction or otherwise. As it will:
- Help you make an informed decision
- Give you the confidence to bid on the property
- Identify major and minor building defects
- Identify any evidence of termite activity or damage
- Potentially save you thousands in costly repairs for major defects that may have otherwise gone unnoticed
- Give you peace of mind
Ultimately, a building and pest inspection is there to protect you from buying a money pit. You’ve likely heard horror stories of people buying properties only to find the house is plagued with problems or riddled with termites. A pre-auction inspection helps to prevent this from happening to you.
Have peace of mind with a building and pest inspection from Local Inspections
At Local Inspections, our inspectors have a minimum of 30 years of experience within the building industry. This ensures you are getting the best quality building and pest inspection.