How to read a building report

About to purchase your dream home? When buying property it's essential to go into any purchase with your eyes wide open. It can be easy to fall in love with a property, but seeing a home for what it really is - faults and all - will help you to decide if it is the right place for you.

Obtaining a pre-purchase property report should be high on your priority list before you make any big financial decisions about the home you can't wait to purchase. These reports highlight potential long- and short-term problems and can save you thousands in repairs later down the track.

We spoke to Peter Georgiev, Director of Archicentre Australia, about how to select a company to undertake an inspection of your potential new abode, what you should expect to cover and how it can be used as a negotiating tool to get a better price.

Choose a report with a holistic approach

“There are quite a few practitioners out there who offer building reports and they can be quite different,” says Peter. Look out for a report that will cover the whole title, not just the property.

“It’s not just about the building, it’s about what’s on the title. Context is important, as the circumstances around the building play into how it all comes together.

“The report is there to help a purchaser to get an overview of the primary construction materials, the site conditions, roofing, floor systems, walls, stories, land slope and age of the building,” he says.

Understanding age and type

The age and type of your property will give you some indication of what to expect on your building report.
Peter explains, “For example, an inner-city terrace with be understood and evaluated differently to a new build in the suburbs.

“There are also a number of issues you’ll need to consider that will be unique to your property, such as the condition of shared walls or parking areas. With freestanding homes set on a slope, it’s a matter of understanding how the property performs within the context of certain landscape elements and drainage.”

Reporting elements

Some building reports can be extremely detailed in their reporting, making notes on every small or minute defect. This can be off-putting for potential buyers, so try to understand the report in the greater scheme of things. Others are less detailed - it simply depends on the company you choose to engage.

However, one thing remains clear across the board - major problems should be clearly outlined.

"We have two basic areas of major concern," says Peter. "One is a major defect and the other is a serious structural defect. The report will also highlight suspected illegal building work and maintenance items like peeling paint on facias or broken chipped windows.

"The report will also include the site and garden, exterior (which covers roof, walls, courtyard and verandahs) and then also a room by room assessment internally."

The presence of mould and termites will also be documented.

Gaining confidence

Most people go into a sale blind if they don’t have a pre-purchase assessment conducted on their potential property. This can be extremely nerve-wracking for buyers, so a report can help you to anticipate what you’re up against.

The information we provide will hopefully put buyers at ease, and help them to make their decision,” says Peter. “As assessors, we just need to tell people what we know and tell it exactly how it is. It’s then up to the purchaser to decide if it’s good or not quite right for them.”

A negotiation tool

Property assessors have no say in the value of a property – but their findings can help you to get a better deal if you obtain a report far enough in advance.

“We simply put forward what we understand to be the condition of the property and then we bow out. As far as negotiation, it’s a matter for each individual to use the report as a vehicle to get a better price or decide if they want to walk away,” says Peter.

Join others on their property journey with the new season of My Dream Home, Mondays, 8.30pm on Lifestyle HOME.

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