Pre-purchase property inspections are highly desirable before you buy for essentially two reasons.
Firstly it should be a practical warning against significant defects in the property that you may not be aware of. Secondly it is strategic, to be used as a negotiating tool in the purchase. Simply, if significant defects exist, you can use the report to justify offering a much lower price. However, there are problems and misconceptions.
Customers often wrongly believe a pre-purchase report reports on everything. It does not. No property inspector is an expert at everything. For example, some inspectors say they check electrical, but how can that be if they are not licensed electricians? The same holds true for plumbing, air conditioning, structural and regulatory and title matters. So it leads to a situation where inspection will exclude (exclusions) a whole array of matters outside of an inspector’s expertise.
Some purchasers are also under the misconception is that property inspection is some form of insurance that will prevent future defects. Simply put, it’s not.
Then there are problems with inspections, often to do with access. A furnished building cannot be fully inspected – you can move a chair to have a look but if you moved a chair why didn’t you move a bedside table, bed, lounge, wardrobe, rugs, and pictures on the wall? The problem is that when you are inspecting someone’s home, you are a stranger in their home. Whether it’s an owner or a tenant, you cannot turn everything upside down.
There are further access difficulties. Roof space is often obstructed by heating and air conditioning ducting, or by a low pitch line. Safety is also a concern. Do you walk on the roof of a two-storey building that has no safety rails? There are lone wolf inspectors out there that make big claims about walking on the roof but they never employed another inspector. Had they done so, they would be acutely aware of OH&S responsibilities and having a safe inspection practice for the employees. Good inspectors go as far as they can without damaging anything, and then report access restrictions.
Sub floor space may be restricted by stored goods, or it may be contaminated with pesticide or broken asbestos cement from renovations. So in addition to restrictions, there are safe access limitations. Property inspection is an inherently dangerous occupation and the inspector is alone on his own, whether walking on the roof, crawling in the roof space, or in the sub floor space.
Fortunately there is guidance in the form of AS 4349.0,4349.1 and 4349.3 that sets out the purpose of pre-purchase property inspections, exclusions, limitations and disclaimers. More importantly, it requires a pre-inspection agreement where the customer can be informed about exclusions, limitations and disclaimers and agree before proceeding with the inspection.
To summarise, a property inspection and report is an attempt to discover and report on significant issues before a client makes a decision to buy. It is not a guarantee that there are no defects that cannot be detected due to inspection limitations. Just as GP cannot see inside your chest without an X-ray or know about your blood without a blood test, the inspector cannot see everything. Of course, if there are symptoms of underlying problems, then further invasive inspections can be recommended.
The healthy way to look at a pre-purchase inspection is as a valuable tool in risk reduction in helping to make a decision whether to buy or not and or to negotiate. Notwithstanding limitations, exclusions and disclaimers, property inspections deliver the right information in the vast majority of cases.