Australians are spending less than one hour inspecting the property they go on to buy and find big issues when they move in.
Data released by ME Bank shows 55 per cent of home buyers devoted less than 60 minutes to pre-purchase inspections, with 61 per cent of the 1000 property owners surveyed discovering issues after settlement.
Most of the owners were hurt financially by their lack of due diligence and some of them expressed regret as a result.
Of the 61 per cent who identified issues, 34 per cent said they experienced a degree of “buyer’s regret”, 58 per cent said they would have paid less for the property had they known about the issues, and 84 per cent said they had already spent money to fix the problems, or had plans to do so.
Curtin University property lecturer J-Han Ho said it was shocking that people were spending such little time researching a purchase that could take “10 years of blood, sweat, and tears” to afford.
He said he would personally spend up to two hours researching a property on top of an hour-long inspection.
“That’s coming from an expert that has been in the industry for 20 years,” Dr Ho said.
“So how much does the general person need to do? Well, how long is a piece of string?”
Dr Ho said regulations differ between states and territories, but generally there is no way for people to back out of a sale once a deal is settled if they only have buyer’s remorse.
Builders Collective of Australia president Phil Dwyer said some people might spend more time researching a $300 air fryer than a house worth hundreds of thousands of dollars.
He said the builder’s warranty is “next to useless” because it is only available to the buyer when the builder has died, has disappeared, is deregistered, or becomes insolvent.
A statutory warranty lasts for 10 years but only applies to structural defects, with smaller issues that may seem serious to the buyer not covered, Mr Dwyer said.
If you feel aspects of a property were misrepresented before you bought it, “justice comes at a huge price”.
“I know of cases where [each side has paid] over $100,000 … to fight an issue over $20,000 or $30,000,” Mr Dwyer said.
ME Bank data showed 18 per cent of people who found issues with their homes after buying them had been “impatient and concerned by rising prices”.
“That type of approach … is not a good thing with such a significant purchase,” Mr Dwyer said.
“I’d rather miss out than buy a property that’s got a lot of problems, because even the rising market’s not going to save you [if there are issues].”
What to look out for when inspecting a property
Dr Ho said buyers willing to do proper research have access to plenty of online resources.
He said many councils have interactive mapping that can measure the size of a property and provide a “legal description” of the property.
Dr Ho said if you order a title search, the certificate title can give you legal information on the property, such as whether it has easements, restrictions, benefits or liabilities.
“A lot of times people … don’t even know that they’re buying a strata property versus a green title property,” he said.
Dr Ho also said you should check whether the property is listed on a website of contaminated sites, and ask the water corporations whether the property had any building restrictions due to underground sewage or water pipes.
Dr Ho and Mr Dwyer said it’s always important to hire a building inspector, which normally costs a few hundred dollars.
But they also gave TND a list of the top things buyers should be aware of when inspecting a house:
- Roof structure: If there is sagging visible from outside or inside the house, the beams may have to be replaced. Together with replacing the roof and tiling, this could cost up to $100,000
- Water leakage: If you can see the ceiling is sagging or if plaster is “powdering off the wall” this could indicate water leakage. To get a “rough” idea as to whether there is water leakage in a wall, Dr Ho said select a wall near a bathroom or kitchen, and touch it about one-and-a-half to two metres off the ground. Then slide your hands down the wall; if the wall starts to get cooler, that indicates moisture in the wall
- Electrical wiring: Dr Ho said a property’s age and location is important, because each state and territory brought in electrical licensing regulations at different times. Also, if your electrical wiring is more than 30 years old, things like rubber conduits and insulation might be brittle and need replacing
- Cracks in walls: Mr Dwyer said cracks in plaster or bricks, particularly extending from doors and windows, are a concern. Dr Ho said these cracks could potentially indicate structural issues.