A slow market is no reason to drop your guard, Australian Property Investor21 June 2011
A softening property market shouldn't lead to buyers dropping their guard - in fact they should take advantage of the current swing to a buyers' market by ensuring they have a professional and independent inspection of the property.
"In the current market many vendors keen to sell their properties are likely to accept a clause 'subject to an inspection not revealing any major building defects or termite activity', which provides a purchaser with the financial security of not purchasing a lemon with expensive unbudgeted repairs," says Archicentre Queensland manager Ian Agnew.
"Often the decision not to carry out a property inspection can make a major financial and social impact on buyers who in some cases run into serious debt problems with unbudgeted repairs or maintenance being added to the mortgage compounding the affordability problem with a $30,000 repair cost turning into $50,000 over the life of a normal loan."
Agnew says in around 80 per cent of property transactions purchasers fail to have the property inspected for structural or termite problems, putting them in a precarious financial position. "In the current climate where many vendors may be facing mortgage stress and decide to sell, the lack of funds for maintenance or repairs can increase the risk of 'lemon properties' coming onto the market," he says.
"New DIY (do-it-yourself) products that fill gaps and cracks are perfect weapons of mass deception which can help dress up lemon properties.
"Typical warning signs for 'lemons' include the use of gap filling products, new wall panelling, strategically placed furniture, pot plants or rugs and newly painted surfaces".
According to Archicentre, the top ten cover ups are:
1. Illegal building - Undertaken without appropriate permits.
2. Cracking - Internal walls patched and painted or new wall panelling installed concealing the cracks; external walls concealed behind plants or trellis.
3. Damp - Walls painted or furniture placed against damaged walls.
4. Termites, borers, and timber rot - Floor damage patched and concealed under carpets or panelled flooring.
5. Roof problems - Rusty metal roofs painted, tile roofs patched with lead. Damaged roof framing propped up in roof space.
6. Rotten weatherboards and windows - Rot patched with filler or covered with tin and painted.
7. Rotten sub-floor or stumps - Floors temporarily propped to prevent bouncing.
8. Faulty or illegal wiring - Carried out by unregistered people.
9. Faulty or illegal plumbing - Carried out by unregistered people.
10. Gutterinf and downpipes - Rusty guttering patched and painted instead of being replaced.Back to Latest news