Greg will answer your real estate questions!
Q. We are about to put our house on the market and wonder whether we should organise a building report for the real estate agent to show potential buyers?
A: In NSW there is no legal requirement for you, as the property owner, to provide a pre-purchase building or pest report (although it is a requirement in ACT).
Most potential buyers will organise their own pre-purchase report prior to entering into an unconditional contract to purchase a home. Problems may arise if their report raises maintenance items, serious structural or pest issues. If this is unexpected, it may turn them off the property completely or be used as grounds to significantly reduce their offer. If you commission your own report pre-sale, you can choose to repair potential problems or rectify defects before you put the property on the market.
Whether you repair or not, disclosing flaws to potential buyers upfront allows you to set your price more appropriately, confidently and fairly, to signal that you have already taken the current condition into account. You start the negotiating process in a stronger position that way.
Items raised in these reports can often be rectified for minimal expense. This can be a wise investment, as a means of preparing for buyers or thwarting those who over estimate the likely cost of repairs. For example, it may be better to repair a leaking shower, which is one of the more common problems raised in pre-purchase building reports, than leave a potential buyer feeling the need to replace the entire bathroom at much higher expense.
The last thing you need is a potential buyer being ‘spooked’ by unexpected bad news or trying to force the price down, which can jeopardize the sale. This is avoided when both the owner and the buyer have upfront knowledge of the state of the property.
Answers are general comment, and readers should always seek their own independent professional advice.
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Greg Trembath is Principal/Licensee at Greg Trembath Real Estate.
Licensed Real Estate Agent – Licensed Auctioneer.
This story was published in issue 79 Greater Port Macquarie Focus