A concerning trend is emerging across the state, one auctioneer says – a trend that the industry’s regulatory body warns has potentially dire ramifications for homebuyers.
Ray White SA chief auctioneer John Morris, pictured right, who has held about 170 auctions so far this year, said he was seeing more and more people – particularly younger buyers – forgo a building inspection in an attempt to save a few dollars.
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“It started at the start of the boom when I spoke with one bidder at an auction and they said they’d spent thousands of dollars on building inspections – a large chunk of their deposit on building inspections only to miss out at auction,” he said.
“Since then, I’ve noticed fewer people getting building inspections prior to buying – they’re taking the risk that hopefully nothing’s wrong with it and that if something is, hopefully it’s not as much as all of those building inspections would have cost.
Ray White SA chief auctioneer John Morris.
“There’s a service out there called Before You Buy, where the owner takes out the building inspection and the new owner pays for it if they’re successful – I don’t know why not more people are doing this because it seems to me to be an absolutely fantastic idea. If I knew I was going to bid at 10 auctions, I wouldn’t want to spend $5000 on building inspections, because you don’t know which ones your going to be successful on.
“A very small percentage of the auctions I do have had building inspections, and of those that have, a lot of the bidders haven’t.
A building inspector carries out a building inspection. Pic: Supplied
“I have six to seven bidders per auction and in the cases where there have been a building inspection, it’s generally only one of those that have got one done.”
Mr Morris said the speed with which the market was moving meant buyers looking to get an inspection were at risk of missing out on homes from sellers looking for a quick sale.
“The days on market for are so low for both private treaty and auction that you’re often having to jump in and put your offers in before you can even get all of your ducks in a row,” he said. “Until we’ve got an oversupply of properties and it turns back into a buyers’ market this is going to happen.”
REISA legislation and industry adviser Paul Edwards said to buy without getting a building inspection was “a very foolish move”.
Paul Edwards of the Real Estate Institute of South Australia. Supplied.
“A building inspection gives a purchaser peace of mind that there is nothing wrong with the property,” he said. “If a building inspection is not secured, then it is basically buyer beware. By getting a building inspection, the purchaser is put on notice that there may be things wrong with the property.”
Mr Edwards said the risk in not getting one is that buyers are effectively buying a property as is, and said househunters should get an inspection on even relatively new builds.
“It is always a good idea for the purchaser to be as informed as possible,” he said.
“Another important point is that if you are a buyer purchasing with the intention of having the property tenanted, then the property must meet minimum housing standards.”
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