Why You Should Get a Building Inspection Prior to Auction

house auction

Buying a home is considered one of the most stressful experiences you may experience during your lifetime. The sleepless nights, last-minute scares, and stresses about finances all lead to an intense experience. In South Australia, we are lucky enough to have two common ways of buying a house – Private Treaty, and Auction. In this article, we will compare the key differences between the two methods of sale, explore how the Building Inspection Report fits into the sales process, and finally wrap up with a short discussion on the detail of what a regular building inspection report includes.

Private Treaty means a private sale where you make an offer, if the seller is amenable to said offer, they will accept it, and you will start to finalise contracts, perform inspections, and arrange funding. It is not unheard of for these trials and tribulations to carry on for weeks. Luckily, for those who want to get it over with quickly, there is another method – Auction!

This method of property sale has the advantage of being quite quick. Although the disappointment can be hard if you lose after setting your heart on a particular property. In both methods, most of the same steps apply, just in a different order and speed.

The following Gantt charts summarise the typical steps and durations for both a Private Treaty Sale and an Auction:

Sale by Private Treaty

Gantt Chart sale by private treaty

Typical Steps for Sale by Private Treaty

Week 1

Organise finances. Check Bank will give you a loan.

Week 2 and 3

Find your dream home. This could take anywhere from a couple of days to several weeks.

Week 4 and 5

Research property. Review: Buyers Information Notice – Vendors Statement – Commission a Building Inspection Report.

Week 6

Engage professionals. First task for your solicitor is to write the offer.

Week 7

Make an offer. Remember you must personally sign it.

Week 8

Wait for Vendor to accept. This could take longer than the week if the vendor has several offers.

Week 9

Offer accepted. The contract may have conditions attached. E.g. Subject to… A final valuation may be required if financing by loan.

Week 10 to 13

Settlement. This is probably the most agonising part of the process waiting for the big day when money changes hands and keys are exchanged.

Sale by Auction

Sale by Auction Gantt Chart

Typical Steps for Sale by Auction

Week 1

Oragnise Finaciers. Check Bank will give you a loan.

Week 2

Read the catalogue and arrange a viewing/inspection if you are interested.

Week 3

Research Property.Review: -Bidders guide -Collusive practices statement -Commission a Building Inspection Report (this must be performed before auction day).

Week 4

Go to Auction. The biggest difference from a private treaty – you must sign the contract and pay the 10% deposit immediately. No “Subject to..” clauses or get-outs.

Week 5 to 8

Settlement. This is probably the most agonising part of the process waiting for the big day when money changes hands and keys are exchanged.

We can see that the Auction process takes around 2/3 of the duration that a Private Treaty Sale will take. Note – figures used above are typical times for the standard method to be followed. In real life, there are likely to be twists and turns that delay things further.

The process and rules of bidding at Auction give us the most crucial reason for commissioning a building inspection before auction day. Access will typically not be provided again until after settlement is complete and the home is yours. If you decide not to commission the Building Inspection Report up-front before the Auction, you are taking a significant gamble. You may be purchasing a house that has significant issues.

What Is a Building Inspection Report?

We have made plenty of mention of a Building Inspection Report, but what exactly is it?

Australian Standard AS4349.1 – 2007 – “Inspection of buildings. Part 1: Pre-purchase inspections – Residential buildings” defines the requirements for a Pre-Purchase Building Inspection Report. This standard sets out three core deliverables/tasks that make up the building inspection:

Inspection Agreement – this sets out the purpose, scope, and acceptance criteria for the Building Inspection and will be signed by the client and inspector before work begins.
Inspection – this shall “comprise visual inspection of the property to identify major defects and to form an opinion regarding the general condition of the property at the time of inspection.” AS4349.1 – 2007 2.3.1.
  1. The Report – this will highlight the following items (AS4349.1 – 2007 2.3.5):
    • Major defects
    • A general impression regarding the extent of minor defects.
    • Any major defect that is an urgent and serious safety hazard.

It is also essential to check on the property from a pest control perspective. We work in conjunction with Adelaide Pest Control, one of Adelaide’s biggest pest control companies. You can be sure that you are getting the very best advice on buying your next home,termite, and pest free.

What Will Be Checked by The Building Inspectors?

As a minimum (defined in AS4349.1 – 2007 3.2.1), a building inspector should inspect the following areas where safe and reasonable access exists:
We will be looking for the following defects (AS4349.1 – 2007 3.3):
Put simply, we will assess the condition of your property and record factual observations.

Why is a Building Inspection Important?

The most important reason for commissioning a building inspection is simply for peace of mind. For most people, their home is their most valuable asset. Gambling on its condition to save a few hundred bucks on an inspection may be a greater cost to you later.

Final Thoughts

We are lucky to have two methods of property purchase available to us in South Australia. Like personalities, some people like a quiet, measured process when buying a house, while others love the atmosphere and adrenaline rush of the Auction. Whichever method of purchase you choose for your next home, ensure you commission a Building Inspection Report. It will make the auction experience that little less stressful and allow you to bid safe in the knowledge the home is in the condition you expect it to be. Remember unlike a Sale by Private Treaty, you cannot have a “Subject to Building Inspection” clause in the Auction contract. It is therefore essential to perform a Pre-Sale Building Inspection before Auction day for all the houses you plan to bid on.

Contact us today to arrange your pre-auction building inspection. Our experienced team of inspectors is here to protect your interests and ensure your exciting new home is all the auction guide describes it to be.

Please feel free to contact us and get a quote now.


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