How unusual is it for a house buyer to request a building inspection before a contract has been signed?
Edit: Also what about before a contract has been drafted?
Is It Unusual for Buyer to Request Building Inspection before Signing Contract?
bargain huntress on 23/12/2020 - 14:59
Last edited 23/12/2020 - 17:48 by 1 other user
Last edited 23/12/2020 - 17:48 by 1 other user
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If you find that the building inspection is unsatisfactory and withdraw from signed contract, do you lose your holding deposit?
Typically, your deposit must be returned since it's an agreed upon condition of sale. There can be agreements where this isn't quite the case, but they're extremely uncommon.
How about gazumping?
@wantsmoreinfo Thanks for replying with your industry experience. Do you have any idea what they might be up to then?
Probably nothing. They just don't think of the consequences. As you can tell by everyone replying in this discussion that is normal, its been drilled into a lot of people that building inspection must be done ASAP before even thinking about buying a house.
thank you. that eases my worry. "probably nothing" - does that mean there is something really unlikely but possible?
Still lose the 1%?
Unless it is an Auction or Tender situation, yes this unusual.
Although, it is no skin of your nose if they do the inspection, just weird, because you can refuse any offer they put in after it.
Its a waste of everyone's time tbh.
perfectly reasonable
The thing that I can’t understand is that many people buy a house without actually spending much time on it. The agent shows you through and you are expected to make an offer. The pressure is ridiculous - and it works! A lot of them spend more time shopping for a pair of jeans. The people I know who are happiest with their house purchases are the ones that have looked at dozens of houses and put in several offers that for one reason or other didn’t succeed. It certainly pays to shop around. That first house you thought was perfect may look like a broken down shack when you compare it to the one you actually buy. My ex wife once put in an offer on a piece of rubbish that was accepted. It took a lot of work to get out of it. The lady that was selling had cancer - yeah right. The agent was my wife’s “best friend” until I said no we don’t want it as I hadn’t seen it yet. Then she became a gargoyle. It was a death trap. Luckily I noticed the land size in the advertisement was wrong and got out that way - on the condition I wouldn’t sue the agent 🤣
would YOU do a building inspection before buying a house OP -___-
OMG
This must be the most naive of property questions I have ever seen.
I mean what sort of question is this????Dear Op
If you were looking to buy a property wouldnt you want to know its condition before making any committment?Sighting the contents of a contract before signing is yet another separate inspection
Once the buyer signs its a done deal
No pulling out.That's not true at all. Once you sign you have a while before committing, also depends on terms and conditions. Everyone in this topic is commenting with no knowledge of real estate at all and giving him wrong information like you are.
I don't follow.
I live in NSW.
You cannot sell a property in NSW without a contract of sale being prepared. This is essential, so having said that, if this property is on the market, there is a contract of sale floating around.
The standard residential contract sale in NSW stipulates you lose your 0.25% holding deposit if you do not proceed or notify of withdrawing within the cooling off period, increasing to 10% of the contract sale if the cooling off period has expired.
Under the standard contract of sale, the purchaser is not protected from building faults or failing to get finance, these clauses need to be written in to any contract and are non-standard terms.
Typically to write these clauses into a contract, you would want to rely on a solicitor to prepare it, which comes with a cost. If the house is $200k, perhaps not worry, but if its $2m, your 0.25% counts. Typically a buyer is engaging a solicitor anyway, but may have to pay hourly rates for contract negotiations and anything past a "standard review".
NSW: https://fairtrading.nsw.gov.au/housing-and-property/buying-a…
In order for you to be able to sign, you are putting up 0.25% and don't have a way to recoup that if there is not a specific clause in the contract you signed, you lose this if the building inspection comes back bad, your finance falls through etc.
There is the 5 day (extendable) cooling off period yes.
And what MorriJ stated above is absolutely correct!
Hence you should do your property inspection BEFORE you sign.Thats is the Norm to answer OPs question.
When you sign the contract the property is considered as SOLD
Just as with any other sale contractSo its still a done deal since if you withdraw for any reason because you loose that deposit regardless of the amount paid.
Seems Wantsmoreinfo is the one with limited knowledge.
Signing any contract is a COMMITTMENT and there are costs and penalties for withdrawing.
Not in SA there is not unless cooling off period has ended.
It's obviously not as common as a pre-settlement inspection, but it's a good move to do as a buyer if you want to include things to be sorted out in the contract prior to settlement (ie. fixing things in the settlement period).
Edit: The inspection usually involves going around switching things on and off inc. air con, taps and lights. Also opening and closing windows and doors. Pretty thrilling stuff.
A little confusing but to clarify…..
Pre-settlement inspection is to ensure the property is being handed over in the condition it was inspected or as agreed in the contract. That includes any subsequent damage to the property after inspection and the removal of any rubbish and personal belongings.
The Pre-purchase building inspection is to highlight any faults or issues with the building that may either convince you not to proceed or to be used in negotiating the final price.
The vendor/seller is not oblidged to make good anything in either inspection other that what I have mentioned above.
Hence a bit ridiculous and useless doing conducting a Building Inspection AFTER signing the contract
This must be your first time in real estate?
It sounds like the rest of the country needs to follow the ACT's suit. In Canberra, the building inspection is organised by the seller and included in the marketing contract, it is then paid for by the successful buyer.
Purchasers are always encouraged to carry out their own inspections whether, pest, building, strata or otherwise BEFORE signing the contract.
Let them :-) If you find a different buyer you have no obligation with first person as there is no contract signed.
Vendors in half decent suburbs have required cooling off waivers (s66W certificate) since Paul Keating days.
IN every AUCTION sale
Sydney market is a bit different. Agents expect to sign before a building and pest inspection. You can try to get around it by discussing with the agent that you are happy to pay the initial 0.25% deposit with a receipt and fix a price/draft a contract but won't sign the contract until a satisfactory building and pest inspection as well as solicitors contract review comes through.
Just be clear that you expect a refund if anything significant comes out of the inspection. If anything does come out you can try to renogitiate a price or back out. Losing $500 is better than losing the whole deposit. It can be difficult since with good properties there will always be buyers buzzing around like flies around a fresh pile…. So you have to be tactful and careful.
There is nothing to negotiate
Its all in the contract of sale.
Once you sign the contract and pay any deposit its not refundable.Contract terms are open to negotiation. That's why there is almost always a special terms addendum. Sellers usually try to sneak in clauses like early release of 5% deposit before settlement.
So many know it alls and so many contradictions
There are NO contradictions at all
Once you sign the contract and pay a deposit its not refundable.
The only exception is during the cooling off period if you have paid the 10% deposit and then withdraw from the contract the vendor is only entitled to claim the 0.25% deposit.
After the cooling off period the full 10% deposit is not refundable.
When and if a purchaser decides to conduct a building inspection is up to them. There is no legal requirement for this in most states.
However it is wise to do this BEFORE signing any contract since the purchaser might them decide not to proceed or choose to renegotiate the price before signing.
An unsatisfactory building inspection does NOT give the purchaser any right to a refund of deposit if the purchaser decides to withdraw from the (signed) contract.
Nor does it give reason for renegotiating the price if the contract has already been signed.So in short once a contract is signed its a done deal and there are costs and penalties for not proceeding. These are outlined above
Plot twist: seller want to get a free building inspection, and suggest a potential buyer to get one. Then, seller withdraw the sale.
No need to withdraw.
Just dont sign contract
I'm offering $xxxx for the property at [property address] subject to building inspection… would be the simplest form.
Correct way to go about things.
That is only an offer and not even a binding one.
Typically if the seller agrees its known as "under offer".
There is nothing binding about this on either party unless contract is signed and a deposit has also been paid.
The agent can still put forward offers to the vendor at this stage if the contract has not been signed.
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Not true.
https://www.google.com/amp/s/www.heraldsun.com.au/news/natio…