When Buying a Home, Don’t Judge a Book by its Cover 4

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Thursday, March 31st, 2016
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The old saying “never judge a book by its cover” is just as important when it comes to buying a property.

I love helping clients understand what lies beneath the skin of property. I still get surprised when assessing a property; often I walk up to the front door and think “this one is going to be pretty good” but as I start to peel back the layers, I’m more often surprised with what I find.

Sometimes it feels like I am destroying someone’s property dream, but at the end of the day, I am saving them from making a big mistake. Mostly, I am providing them with an opportunity to save thousands of dollars on the purchase or the option to walk away.

It disappoints me the lengths homeowners and real estate agents will go to and hide a known problem from a potential buyer. You have probably heard the stories of car owners putting banana skins in the diff to remove that whining sound when you go for the test drive, or the fresh paint job on a home to cover wood rot, termites or rust.

Termite mudding

Termite mudding

I have had agents state to me that they do not want to know about any problems that I find because then they are obligated to advise any potential buyer. Needless to say, many times I have made a point of making sure an agent is aware of a major issue and even followed up later to ensure that prospective buyers have been advised. Guess what? Sometimes they haven’t.

We ask a home seller whether they’ve had any issues with termites and many a time we have been told they haven’t, only to find significant termite damage to the structure of the building. When we raise it with the homeowner they then backpedal and say “oh that was years ago, and we had it treated!” The problem is, treating termites does not correct structural issues with the building.

Leaking shower

Leaking shower

So as a property inspector, I am always very mindful not to judge a book by its cover. It is vitally important to look beyond the pretty bits – the freshly baked bread hiding the smell of the dog; the pleasant smelling air freshener at the front door masking the musty smell from the poorly ventilated and drained sub-floor area; the newly painted deck and stairs where the paint has been applied thickly enough to fill the rust holes and the wood decay and so on. Then there is the freshly painted wall in the bedroom that just happens to back onto the leaking shower recess, or the freshly painted ceiling right beneath the area where the valley roof gutter leaks every time a storm comes in from the west.

In fairness, agents often have situations where the homeowner does not disclose the issues and then they are blindsided when a problem comes up in a building and pest inspection.

There are also the genuine people still out there in the world who will tell you about warts. I was lucky to be involved in that very situation myself when we bought our own property 16 years ago. The elderly couple we bought from were wonderful people and upfront in telling us that they had issues with a termite infestation in the past and that there was some termite damage in the front section of their home.

So, the next time you or someone you know is looking at a property to buy, make sure you look beyond the pretty bits, peel back the layers and check out what lies beneath. If you don’t, you could be stung with unexpected expenses. Worse still, when you sell in the future and someone else peels back the layers and discovers old structural termite damage, they will want to negotiate a substantial price reduction from the purchase price. Ouch.

Take the emotion out of the purchase and have your own independent building and pest report carried out from an independent source. These guys will peel back the layers and find the things you can’t possibly find as they have the local experience and knowledge. Sometimes you may not like what you hear, but it’s important that you find out now rather than when the budget can’t accommodate an immediate expense of a defect that must be rectified now. If possible, source your own building and pest inspector rather than using a referral from a real estate agent.

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  1. Andrew Foley

    What amazes me is that people fork out $500k or so for a new home and do not spend $555-$1,000 on a proper pre-purchase inspection report. Not to spend that initial money up front could cost tens of thousands later on.

    Another thing that amazes me is that outside of Queensland, no state in Australia requires pre-purchase building inspectors to be licensed. Therefore, people are being put at the mercy of cowboys who might not have any building training or knowledge of structural/termite issues at all.

    • Branko Mladichek

      Great article from Bruce and as experienced and accredited building and timber pest inspector I fully endorse it.
      I sympathise with Andrew but we have registration of builders in Victoria that has not stopped cowboys ripping off home owners. Probably the quickest check you can do is if they have current professional indemnity insurance (preferably from Rapid Solutions). Insurer will not underwrite inspector unless they are themselves satisfied as to their proficiency.
      As for relevant qualifications and experience and talk to past clients.
      No insurance, walk away no matter how attractive inspection quotation looks.

    • beverley-jane

      Our delightful builder is a prime example of any Tom, Dick and Harry becoming an inspector Andrew!
      After multiple VCAT appearances and successful warranty claims against his significantly defective, dangerous construction delivery and resultant financial and emotional damage to multiple families left to pick up the pieces, he executed his well planned liquidation.
      Guess what he became once liquidated? A Building Inspector which does require registration but nobody bothered to enforce this for 8 years until we pushed for investigation of this fraud.
      What did he get for TWO guilty counts of fraud in the Ringwood Magistrates Court? A slap on the wrist good behaviour bond with a $2000 charity donation.
      He is now a 'property inspector' offering pre-purchase inspection reports which in itself is a sick joke since he couldn't deliver homes built to plan, permit, contract or Australian Standards and Tolerances. His lack of knowledge and deficiencies, over and above outright theft, have cost us over one hundred and fifty thousand dollars to repair and he has not had to pay a cent! Who says crime doesn't pay?
      BUT, registration only offers a false sense of security. Neither the multiple VCAT hearings, successful warranty claims or his liquidation apparently bothered the 'regulators' who continued to allow him ongoing registration to 'reassure' other trusting families he knew what he was doing!
      Regulators and industry players turn a blind eye to the damage inflicted on those who trust their so called controls. Why? $$$$?
      And no, there were no assets to pay out the multiple claimants against his liquidation but he did manage to sell his property for $1,325, 000.00 two years later. What a surprise!

  2. beverley-jane

    Branko unfortunately you are incorrect re insurance being a safeguard.
    Our deregistered, liquidated builder with a track record of multiple successful warranty claims against his name, non compliance to permits, drawings and regulatory standards, defective, rotting and collapsing structures to our home, currently on the regulator's disciplinary register and he's STILL given insurance! He has no remorse or shame claiming "he expects the highest quality of standards.".
    Here is his current deceptive blog as a 'property' inspector and bear in mind that he alarmingly claims he is an accredited VCAT expert witness!! :

    Having been a Registered Building Practitioner since 1989 and, with the experience of managing over three hundred of his own Residential and Commercial construction projects (as the primary builder), he knows what to look for – and he expects the highest quality of standards. **** established ***** in 2010.

    *** can view your New Home, Rental Property, Pre-Purchase and/or Specific Issues with a constructive but critical eye, and complete the process with specific reports that tell you what you need to know. He also has significant VCAT experience, and the accreditation to be an expert witness.

    Accreditation
    HIA Platinum Member since 1989
    Registered Building Practitioner (Unlimited) ****
    Professional Indemnity and Public Liability Insurance assured
    HIA Courses completed in both Supervision and Legal Standards
    VCAT Recognised as a qualified, reporting expert in the Building Industry.

    Beware! It is not compulsory for Property Inspectors to hold insurance for Public Liability, or Professional Indemnity. As part of his commitment to premium quality and service, *** retains both for your protection.