Pests: A deal-breaker or negotiating tool?
The family home is often a lifetime investment, so it is important to make informed decisions before you buy. There are three simple steps to discovering whether your new ‘forever home’ is your dream palace or lemon:
1. Include a building and pest clause in your contract of sale
As a rule, the clause allows buyers to undertake building and pest inspections by a specified date, however, buyers are advised to read all terms carefully. Optional clauses can be added, for example: “If the Buyer does not terminate this contract by 5 pm on the Inspection Date, it will be treated as being satisfied with the building and pest reports it has obtained”. Agree on a date that gives you enough time to source reputable inspectors and receive written reports.
The building and pest clause also gives buyers the right to terminate the contract if a report is unsatisfactory. Purchasers should seek legal advice in this situation, as general defects or cosmetic issues are not legitimate reasons to end a sale. If the building is found to have structural defects, or has a severe pest infestation such as termites, the buyer would normally be within their rights to terminate the sale.
2. Obtaining written reports from qualified building and pest inspectors
Make sure the building inspector you engage is suitably qualified and licensed at the online licence check. Choose a licensed builder, architect or surveyor for your building inspection. If you have concerns, make sure you specify the particular item or on-site area when you book your inspection.
Pest inspections should be carried out if the property is in a termite area, or there are signs of active infestation from termites or rodents.
3. Acting on the information in the reports in a reasonable and timely manner
If you receive an unsatisfactory report, but the problems are not severe enough to terminate the sale, you can still use the information as a negotiating tool. You may take the opportunity to ask the seller to fix the problems, or you may prefer to negotiate a lower purchase price.
There are very few properties that are completely problem-free. More often than not, building and pest inspections can help mitigate the cost of fixing problems that are discovered pre-sale. They can also help you manage existing issues when you move into your new property.