Avoid costly traps

Have you heard the one about the toilet where the plumbing went nowhere? Or the house where the roof tiles were upside down? Then there was the couple who showered at the gym for years because turning on the hot-water cylinder created a mysterious stench.

Archicentre spokesman Ian Agnew says 30 per cent of all homes inspected by its pre-purchase inspection service have some form of major fault.

These can include problems with the foundations or roof, faulty wiring or plumbing and illegal building, some of which can run into tens of thousands of dollars to repair.

''The popularity of the quick makeover with 'products of mass deception' - such as gap fillers - can hide a multitude of potential problems,'' he says. ''Areas of the home such as under the floor and in the roof cavity can often hide problems which the new owners find out about after they've moved in or start to renovate.''

He says a pre-purchase inspection will allow you to walk away with your bank balance intact or make a considered decision and buy the property knowing the likely cost of repairs.

Building and pest-inspection reports can also be strong bargaining tools in a market where people are keen to sell and are open to negotiation.

Property investment author and mortgage broker Jane Slack-Smith paid $8000 to join the toilet in our above example to the sewerage system.

On another occasion, an eagle-eyed inspector spotted traces of soot in the roof cavity of another property she was considering - evidence of a previous fire and ringing alarm bells there may be hidden damage.

HOUSES

Slack-Smith, the author of Your Property Success with Renovation and director of Investors Choice Mortgages, says her first tip is that people should never rely on a real estate agent's recommended building or pest inspector, because they can never be truly independent. How comfortable is the inspector going to be writing a report that creates a hurdle to the sale of the property and therefore to the agent earning their commission?

Second, she always attends the property inspection. ''If the inspector says something like, 'These floorboards are quite spongy - it might be a problem with the stumps,' you can ask them how much that would cost to fix,'' she says.

''You've got a builder of some experience there, giving you an estimate of potential costs.''

But don't let the real estate agent in on the inspection, she says. Tell them you'll meet them outside afterwards.

''That's information you've paid for, and you can lose the edge in negotiations [if they attend].''

You don't want the agent telling rival buyers that a property inspection has been done and it was fine.

If you want to keep your costs down, check whether the inspector will do a verbal report, which could slice the cost from about $500 to half that, she says.

And use your report as a bargaining tool. Those spongy floorboards might cost $5000 to fix but you could negotiate $10,000 off the price.

(Archicentre has a free guide to help work out the cost of faults and repairs at archicentre.com.au/cost-guide.)

UNITS

Slack-Smith says pre-purchase inspections of units can be a different matter, because the inspector may not have access to all parts of the building. Her advice is to obtain copies of the building's strata reports and minutes going back 10 years, and check them for clues to the building's condition.

She tells how she was under pressure to finalise her offer for a beachside unit by the end of the day but the strata report had not arrived.

The agent told her the property had previously sold for $600,000 and she risked losing a bargain at $495,000. She stood her ground and when the strata report finally arrived, it showed the owners in the building were up for $100,000 each to repair concrete cancer on the roof.

Talk to the neighbours, too, she says. On another occasion, this uncovered the fact that the lifts were to be replaced in the next six months.

Archicentre says anyone hiring an inspector should make sure they have appropriate qualifications, professional registration and at least $10 million of public indemnity insurance in place.

Key points

■ Use inspectors who are independent of the agent.

■ Attend the property inspection yourself.

■ Use inspection reports as a bargaining tool.

■ Look through strata reports and minutes for looming costs.

Pipe nightmares

Sydney plumber Darren Clancy is helping out a customer who bought a beautiful old home that has a dark secret.

The home came with a ''shiny renovation - new kitchen, new bathrooms, all loveliness,'' says Clancy, of Pipe Perfection in Sydney's inner west.

''But all those shiny new fixtures were put on top of old clay sewer pipes that have collapsed,'' he says. ''We're having to fix her sewer for her and help her get some kind of recourse for the disaster that she unwittingly purchased.''

The solicitors involved with the purchase should have checked that a new drainage diagram had been lodged with Sydney Water, he says.

And a thorough building inspection should include the plumbing. ''Builders doing building inspections don't, as a rule, thoroughly check the plumbing,'' he says. ''Having the plumbing checked in an old home is a must because with old clay pipes it's a matter of when they break, not if.''

The story Avoid costly traps first appeared on The Sydney Morning Herald.

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