Pre auction inspections are really no different to the standard pre purchase building and timber pest inspection. If you are thinking of purchasing a property at auction it’s important for you to be prepared and still take the necessary steps to have the property thoroughly checked out before you place your bid.
Auction conditions are not normally conditional upon the purchaser obtaining a satisfactory building and pest inspections. It’s too late one the hammer has come down!
Many times I am asked to conduct the inspection on the day of the auction. The purpose of this report is not to negotiate a reduction in price for the property. The report has many other advantages. It can highlight hidden defects and conditions that may be conducive to wood and timber pest decay. Rectification may add significant costs to an already stretched budget. If the property is an investment being able to determine how long you many need to service the mortage before tenants can safely move in can be an important factor. All this information needs to be considered before you bid and may be helpful in determining what your maximum bid should be. It may even be a game changer and the outcome may be that you won’t be bidding at all.
A pre-purchase building inspection can also provide you with evidence to prove the condition of the property at the time of purchase. This can be invaluable if you need to make an insurance claim in the future. Some insurance companies will not pay out on a claim if they believe damage was pre-existing. The report has many labelled photos and highlights defects and maintenance items that need attention.
The video below was conducted hours before an auction. I only just had time to conduct the inspection, send it out to the potential purchaser (within ½ hour) and go through a verbal overview before the auction commenced. I believe that this was the only building inspection completed on the property so my clients were the only ones that knew of the concealed termite damage that lay under the floor in the flooring and skirting boards.
The hidden costs for this couple were too much to bear and because it was an investment they may have been without rental income for months whilst rectification took place.