What is a building and pest report? And why should I read it?

The value of building and pest inspection report is that they can help you avoid terrible investments.

Guides
Home Ownership
by
Erin Howell

Earlier this year, we found extensive, hidden termite damage in a house in Newtown, Sydney. It was worth land value only, as far as we were concerned. Another family bought it one day later for the full asking price. They did not appear to know that the property had a hidden defect and are in for a terrible shock.

This is the value of building and pest inspection reports—they can help you avoid terrible investments. 

While this report isn't a mandatory part of the home buying process and isn't a regulated industry, it should be a non-negotiable for any buyer. It requires an expert opinion to see beyond what you can in a typical inspection. Getting informed of your property's issues will save you headaches in future.

Knowing what to expect, what to look for and how to identify a red flag in a building and pest report will help you avoid a problem purchase.

This guide will tell you everything you need to know about these professional reports and help you buy a great home.

What are building and pest reports?

A professional report for a freestanding house is typically a building & pest inspection report. It'll usually be a strata report for apartments and townhouses in a strata complex.

Building inspection reports:

A building report is a detailed property inspection conducted by a licensed and accredited building inspector. A building report can uncover defects in a property before purchase. Often, these are structural defects.

Pest inspection reports:

A pest inspection is where a qualified pest inspector attends a property and conducts a methodical and careful visual examination of the inside and outside of a property, using thermal sensing and moisture detecting technology. A report is then put together which outlines the risks in the property's condition. Common pests include termites and cockroaches.

Why do I need a building and pest report?

Your home will likely be one of the most significant investments you make. After spending so much on a home, it is devastating to discover that you must spend tens of thousands of dollars in unexpected costs due to building defects or pests.

The building specialist will check the structure of the roof, walls, floors, cavities, fences and any other structures on the land. They look for things such as cracks, faults, asbestos and movement. The inspector will note anything that you should look into further or any worrying aspects around the building that can usually only be seen by a trained eye or with specialist equipment—for example, using machines to check if the house is damp and may have issues with plumbing, flooding or rain.

The pest expert will check for termites, termite damage, white ants, borers and other pests. They will identify any pest infestations in the home. This can save you from finding out you have issues in the house that will cost money and sometimes are hard to fix.

If there are issues that are identified in the home, it will allow you to get quotes for the repairs or understand the depth of the damage and liability. With this information, you may negotiate with the seller if they are significant or choose to walk away from the purchase. If any changes or agreements are made about things the vendor will fix, your legal team must include these in the special conditions in your contract of sale.

What comes up in a building and pest report?

You will want to look out for things like water damage and leaks, broken appliances and wood rot in person and in reports. The major callouts to look out for in reports include evidence of untreated termite activity, serious structural issues (including ground movement) or anything flagged as a 'major defect'.

What gets checked in these reports?

  • Interior and exterior walls
  • Roof exterior view and the roof space/cavity
  • Gutters
  • The floor and subfloor
  • Toilets and bathrooms
  • Laundry
  • Garage, sheds, driveways and carports
  • Stairs, fencing and pathways
  • Non-structural retaining walls
  • Visible structural issues
  • Minor defects like paint chips or cracks in tiles

Some things that won't come up in your report:

  • Issues that are hidden behind walls or ceilings - Inspectors can't assess things that aren't readily accessible and will outline the areas in their report that were obstructed. This includes everything that is blocked by these things, including plumbing, drains and electrical wiring issues.
  • Appliances - Some properties are sold with built-in appliances. Appliances such as dishwashers, ovens, air conditioning and range hoods often aren't within scope.
  • Home accessories - Alarm systems, fire and smoke alarms and television antennas aren't included in the report.
  • Swimming pools and their local compliance. This differs across Australia, so whether you're in NSW and buying in Newcastle or Sydney or Queensland and purchasing in Brisbane, The Gold Coast - you should get a local professional to check this is safe.

The inspector is working for you to help you secure a great home, and they will provide a detailed report with their findings. It can be really helpful to attend the inspection so you can ask questions to see exactly what they are referring to, but in most cases, inspectors provide their number for a call after the report is complete in case you have questions.

How much does a building and pest report cost?

To access a report there is typically a fee of $500, sometimes up to $750 depending on providers. Real estate agents will often organise to pre-purchase building inspection report so that it is quickly accessible to buyers. This fee is usually split into $50 upfront, and then $450 if you successfully purchase the home. 

You can also commission your own Building report, which we often do at OwnHome. If you do commission your own report, you'll need to pay for this upfront and out of pocket.

It is a great idea to use a building and pest inspector who will take the time to explain what has been identified and who is willing to explain the findings to you.

Overall, this is a low-cost written report that provides peace of mind that your home doesn't have major red flags. Property buyers should be aware that there are risks and take precautions to minimise unexpected safety hazards, structural damage and major costs.

Whether you are buying your first home or investment property, this is a very worthwhile cost.

How do we help at OwnHome?

At OwnHome, we complete a building and pest report on every property we purchase. We have a team that talks to the inspectors and invests the time to call our specialised builders to find out the costs of defects identified - so you have all of the information you need upfront to ensure we are buying great homes.

Inspections need to be taken seriously as they have legal and financial implications for purchasing a home. Don't wing them. As well as getting a professional to look over your home use our checklist to make sure you're protecting yourself against a poor purchase.

We help all customers navigate home purchases and get onto the property ladder, without needing hundreds of thousands up front in deposit savings. If you're considering buying a home and would like to learn more about rent-to-own, you can use the buying power calculator online.

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