In the past, it was the buyers responsibility to organise a pest and building report once their offer was accepted. But times have changed. More and more often, sellers are providing these reports prior to their property hitting the market.
The number one reason why this has changed is because of the increasing prevalence of auctions. If you wanted to buy a property at auction, the contracts become unconditional once the hammer goes down. If you get a report later and it says the building is about to collapse, it is tough luck: your problem.
If you buy at auction, you need to get a pest/building report organised prior. But you aren't guaranteed the property afterwards if you are outbid. So if there are ten bidders, you could have nine people spending $600 each on reports for no reason. Once you lose an auction and go the next one, you will most likely be reluctant to lose another $600. This cost acts as a barrier to people bidding. When that is the case, you won't achieve the optimum price. So, some time ago, agents began encouraging sellers to provide these reports. The logic here is sound.
With so many auctions around Newcastle now, it has now become expected that reports will be available, even when the property isn't going to auction. Buyers now feel something wrong with a property when pest and building report are not provided.
One of the seller's major advantages when providing the report is that it helps to remove the old habit of the buyer trying to renegotiate the price once an offer is accepted.
Back in 'the old days', the price was finalised, and then the report was completed. Inevitably it came back with some issues. The buyer would then ask you to fix these issues or ask for a price reduction. Otherwise they would threaten to walk away from the sale. This was a very common and costly issue for sellers.
By providing the reports up front, you can disclose any issues before negotiations. In theory, buyers can factor any defects into their price. In reality, buyers are usually more focused on beating out the competitors and defects are just accepted as part of the property's normal wear and tear. From experience, owners typically end up with a superior price and significantly less stress. Buyers also appreciate it, and we think that looking after the buyer is a good thing.
By you providing the report, you can also be prepared for any major issue. For example, your place might have some major rising damp problems. You don't have to fix these, but you can get a quote to get it fixed. So all parties know what we are dealing with. Burying your head in the sand and thinking there is nothing wrong with your place because there wasn't when you got your report done 15 years ago is not a good strategy.
Before you go ahead and get this done, please talk to us for recommendations. Some of the inspectors in Newcastle have very short warranty periods which renders them useless if the property doesn't sell within a month. The inspector also needs to be willing to transfer the ownership to your buyer so the legal liability transfers with it to the buyer. Not all inspectors will allow this, so please don't waste any money on this until we have provided further information.
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