Knowing the real conditions of the house you want to acquire, before paying a single dollar, is essential to avoid that the investment of your life becomes a horrible and expensive nightmare
You have found the house of your dreams: it is located in the area you have always wanted, it is spacious, has a beautiful garden and a garage for two cars. The price is high, but you can afford it and sign the purchase contract. After two months of moving, you discover that the roofs are leaking, the structures are cracked, and the electricity is not stable. The repair is almost one-third of the total price of your mortgage. How to avoid this?
Once you sign the purchase contract in real estate, you will begin a process with a series of steps that will take you to the acquisition of the property. Therefore, your real estate agent will give you a checklist where all the activities to be done appear before reaching the closing of the deal.
Most contracts have a contingency clause that allows the buyer to cancel them if there is a substantial problem revealed by an inspection. However, if there are no major problems, you have a legal obligation to comply with the contract and sign.
You must order a complete and detailed inspection immediately after signing the contract and request a report of the building inspections in Melbourne before making the loan application.
Ask your agent to recommend several inspectors who work in the area where the property is located and dominate local requirements.
If you are pre-approved by a lender, as recommended, it will not take you long, upon receipt of the inspection clearance, to apply for the loan. Take care that the inspection of the property is as professional as possible, ask your agent to accompany the inspectors to check if they are thorough in their work.
When selecting the professionals who will do the inspection, avoid that they have conflicts of interest. Do not hire those who may have a reformed company and recommend jobs that they or people in your environment should undertake. Remember that Melbourne inspectors have a license that regulates their actions.
Find out what a regular inspection is, according to the standards in your area and check that the inspector you hire complies with those standards.
Another good idea is to hire the inspector to do the Walk Through with you one or two days before closing when the seller has removed furniture and personal belongings from the property. This way you can check on site if they made the repairs correctly and if all the devices are as established in the contract.
When you buy a new property, many agents do not recommend hiring an inspector. However, you should consider that new constructions may also have defects and some very significant ones that could invalidate the contract. It is better to spend money on an inspector capable of discovering errors that you can overlook.
Home inspections are concentrated in eight areas
- The state of the structure.
- The external evaluation of housing.
- Very important, the conditions of the roofs.
- The condition of the plumbing.
- The operation of housing systems and components.
- The state of the electrical system, cables, sockets, voltage level, state of the electrical boxes.
- The situation in which is the kitchen, air conditioning, washing machines, dryers, fans, openings and electric locks, heating and other appliances of the house.
- The condition and operation of the garages and the cupboards of the property.
When you are applying for a mortgage, you should take into consideration that the lenders also have something to say about the inspections. The lenders are mainly interested in two reports:
One on the ceilings, where it is explained that they lack leaks or cracks susceptible to let the water pass; where the inclination of the same, the state of the coatings and the drainages are analysed. If it is a flat roof, the document must state that it is in good condition, without water bags or bulges.
The other report is about the state of the structure. The inspectors must prove that the house is free of wood destroying organisms (WDO), if applicable.
If there is a problem in the structure of the property or the foundations are defective, the ceilings in very bad conditions or the electrical cables are not coded, you can cancel the contract thanks to the contingency clause.
However, if you discover a minor problem of plumbing or electricity that is easy to solve, you can reach an agreement with the seller to correct or reduce the price of the home.
You must press to comply with the deadlines set in your real estate broker’s agenda. Remember that the inspection reports are valid for 20 days. The purchase process must take place in a short period; it is like clockwork so that the hands mark the time, you have to put into operation different wheels that you must accompany in your movement. If only one stops, all the gear will stop and could result in a postponement of the closing date, for which you will have to contract new inspections.