What does subject to building and pest inspection mean?
"Subject to building and pest inspection" is a common clause in real estate contracts. It means that the sale of the property is contingent upon the outcome of a professional inspection of the building for timber pests and structural issues.
Ultimately, this protects you (the buyer) and gives you an option to withdraw from the contract should major defects be found. It also gives you greater bargaining power during negotiations.
A building and pest inspection ensures you're making an informed decision
No doubt, you’ve heard horror stories of people purchasing a property only to find it needs serious repairs or is riddled with termites. The purpose of a building and pest inspection is to prevent this from happening to you.
It ensures you are fully aware of the current condition of the property before purchasing. This enables you to make an informed decision and ensures that there are no hidden surprises down the track.
It helps to protect you from being deceived
Another reason why having a contract be subject to building and pest inspection is to ensure that you’re not being duped by the real estate agent or the buyer. The truth is that real estate agents work for the vendor. Both the selling agent and vendor want to sell the property for the best possible price. Understandably, the vendors want to make money on the home. Whilst the selling agent gets a commission from making the sale.
For this reason, both the vendor and agent will do everything they can to present the home in a positive light. Whilst this is completely understandable, some agents and vendors have been known to take this too far on occasion. Unfortunately, this means there’s a possibility that either party (agent or vendor) may paint a picture of the property that is simply untrue.
A building and pest inspection gives you a clear picture of the true condition of the property – free from influence or bias from other parties involved.
It gives you greater bargaining power
After you have received your building and pest report, you have a few options:
- Proceed with the purchase of the property and settle on terms already discussed with the vendor
- If major defects are found, you may be able to request that the vendor fix the defects prior to settlement
- Use the list of defects to negotiate a lower buyer price and have the repairs completed after the settlement
- Choose not to purchase the property and walk away from negotiations
Regardless of which option you decide to pursue, you must act in a manner that is fair and reasonable. For example, it would be considered fair and reasonable to walk away from negotiations because the listed defects are too severe or are outside of your scope or budget to repair. It would not be considered fair and reasonable to exit the purchase contract based on minor defects, such as stained carpet or general aging to the property.
What is a building and pest inspection?
A building and pest inspection is a visual assessment of a property to determine its current condition. As the name suggests, it is a combination of a building inspection and a timber pest inspection.
The building inspection looks for major building defects that may affect the livability or safety of the property. It also looks for minor building defects that are non-urgent but may require maintenance. You can find out more about the common defects found here. The timber pest inspection involves checking the home for any evidence of termite activity or damage – both past and present. A thermal imaging camera and moisture meter are also used during the inspection to help the inspector detect anomalies that may not be visible to the human eye.
All accessible areas within 30 meters of the home are checked. This includes the interior, exterior, yard, roof, roof void, subfloor, garage, fences, retaining walls and more. The roof, roof void and subfloor will only be inspected if it is safe for the inspector to do so, as outlined by Australian Standards.
The importance of subject to building and pest inspection
In summary, it's important for a contract to be subject to building and pest inspection for several reasons:
- Ensures you're making an informed purchase decision
- Gives you greater bargaining power
- Protects you from being deceived
- Gives you peace of mind
- Identifies major and minor building defects
- Identifies evidence of termite activity or damage
- Saves you from costly repairs from issues that may have otherwise gone unnoticed
- Helps you to plan maintenance and renovations
Have peace of mind with a building and pest inspection from Local Inspections
With all our building and pest inspectors having over 30 years of experience, you can trust that you're getting a quality building and pest inspection.