By Guest Carol from Vista Financial
Congratulations on preparing for the costs that lie ahead.
Buying a house is exciting. And daunting. And expensive. In fact, for most it will be the single largest purchase of your entire life. If you’re lucky, you may even buy more than once! But let’s not get carried away.
Over the next few days I will be posting about a different cost each day, so follow this post to be updated.
Let's start with the immediate costs.
Like a band aid, these will hurt at first.
Building and pest inspection
$400 - $500 (estimate only)
Now, if you are from the UK, I have heard this referred to colloquially as a ‘survey’. It is important to note the differences between a survey and a building and pest inspection.
Surveying or in particular “cadastral” (boundary) surveying focuses on the land itself – it’s legal ownership and exact location of associated boundaries.
Building inspections focus on the structural soundness of the building. Pest inspections investigate the current or potential impact of any pests such as termites (white ants) on the property.
These inspections are normally undertaken prior to making an offer or during the cooling off period after you have signed a contract. As cooling off periods can be as short as 48 hours, inspectors are used to having pretty short notice to do this, but you will have enough going on at that point, so find one you like and check their availability earlier.
Once complete, you are given a report on the findings, including estimates of how much it would cost to fix anything.
These serve a dual purpose of knowing what you are buying and, if there is something wrong, what it may cost to fix it. You can then use any downsides or estimated costs as leverage when negotiating the final purchase price (e.g. the vendor can fix the retaining wall prior to settlement, or you can reduce your offer by the $5,000 it will cost you to fix it yourself).
It is highly recommended that you undertake building and pest inspections to make sure you are not up for any nasty surprises. This is especially the case if you are buying under auction conditions, as cooling off periods do not apply. If you don’t get the house then yes you’ve lost a few hundred, but if you win the bid and find termites too bad, so sad. You have purchased it as it is, warts and all - so buyer beware!