If you’re thinking about buying property this spring, you’ll likely encounter the term “pre-purchase reports” during your conveyancing transaction. These reports are essential tools that provide crucial information about the property you’re considering, helping you make informed decisions before committing to the purchase.
Think of pre-purchase reports as your safety net. Once contracts become unconditional, you generally take the property “as is” with any existing problems, so these reports help identify issues before it’s too late to negotiate or walk away.
When Are Pre-Purchase Reports Obtained?
Pre-purchase reports are typically obtained during the cooling-off period or before contracts go unconditional. This timing is crucial because it gives you the opportunity to review the property’s condition and make informed decisions about whether to proceed, negotiate repairs, or adjust the purchase price.
The information in these reports supplements what’s already outlined in your contract, giving you a comprehensive understanding of what you’re buying.
The Three Essential Pre-Purchase Reports
While there are many different types of reports available, three reports are considered essential for most property purchases:
Building Reports
A building report involves a qualified building inspector conducting a physical inspection of the property to identify any defects. The inspector will:
- Access subfloor areas where possible
- Check the roof space through manholes
- Test for moisture in bathrooms and wet areas
- Take detailed photographs of any issues found
The inspector compiles this information into a comprehensive report, helping you understand the property’s condition before making your final decision. If significant defects are discovered that weren’t obvious during your initial inspection, this can lead to negotiations about repairs or price adjustments.
Keep in mind that even brand-new properties typically have some defects. The key is identifying issues that could be costly or problematic in the future.
Pest Reports
Similar to building reports, pest inspections require a specialist to physically inspect the property. The pest inspector will examine:
- Roof spaces and subfloor areas
- Gardens and substantial vegetation near the house
- Areas where termites and other pests commonly hide
The inspector looks for signs of termite activity and other pest issues, providing photographs and a detailed written report. This is particularly important in NSW, where termite damage can be extensive and expensive to repair.
Strata Reports
For apartments, units, and townhouses within strata schemes, a strata report is essential. This report involves reviewing the strata plan’s financial and administrative records to understand:
- Insurance coverage for the building
- Quarterly strata levy amounts
- How the strata committee spends its money
- Any major upcoming expenses or repairs
- Outstanding debts or financial issues within the scheme
This information helps you understand ongoing costs and potential future liabilities that could affect your investment.
Understanding the Costs and Process
Your solicitor or conveyancer typically arranges these reports on your behalf. The total cost for all three reports is usually around $1,000, which is a relatively small investment considering the financial protection they provide.
Remember, these reports are about identifying genuine issues that could affect the property’s value or your enjoyment of it. While sellers should expect that reports will identify some defects (this is normal), buyers should focus on significant issues rather than minor cosmetic matters that would have been obvious during initial inspections.
Making Informed Property Decisions
Pre-purchase reports give you the confidence to proceed with your property purchase, knowing you understand exactly what you’re buying. They protect you from unexpected surprises and provide valuable negotiating power if issues are discovered.
Whether you’re a first-time buyer or experienced property investor, these reports are an essential part of the conveyancing process that shouldn’t be skipped.
Ready to move forward with your property purchase? Our experienced conveyancing team can arrange your pre-purchase reports and guide you through every step of the buying process. Contact Complete Legal today to ensure your property transaction runs smoothly and your interests are fully protected.
