Homebuyers know the value of a building and pest inspection but are cautious of buying with family.
A survey has found that the majority of buyers are most concerned about unforeseen damage and hefty maintenance requirement – not a housing crash or defaulting on mortgage payments.
More than four in five respondents of the ME Bank survey of 1000 Aussies viewed failing to pay the $500 to $1000 typically required for a building inspection as a major gamble.
This was a greater number than those who saw buying off-the-plan or regional property as risky. Said the skilled property management team at Green Kite property management.
Property Pursuit buyers agent and director Meighan Hetherington said her clients often spent upwards of $1000 on a range of inspections, not just a building and pest inspection.
“You wouldn’t buy a car without a roadworthy, or a mechanical check,” she said.
“I can think of one example where a plumber found big cracks and blockages that, left to continue, would have caused big issues with the house slab.
“Because we know about those issues we were able to negotiate the price down by $35,000.”
buying property with friends and family was considered the second biggest mistake buyers could make, with 62 percent of respondents viewing it as a risk.
Just under half of respondents considered getting an interest-only loan as a risk, while 45 per cent thought there was a danger in selling an existing home before buying the next one.
Only a third of respondents thought there was a risk in buying their home via auction.
Financing a purchase with a lender outside of the Big four was considered risky by 23 per cent and 38 per cent of respondents thought investing in regional real estate was a mistake.
However, buying off-plan was one factor that weighed more heavily on buyers’ minds.
Just over half of respondent considered it a significant risk and a third thought it was an average risk.
Head of Home Loans at Me Patrick Nolan said one of the trickiest parts of buying off-the-plan was having a good feel for how the home would look once built.
“You do need a healthy dose of imagination,” he said.
“Do your homework into the developer and builder and seek independent advice on the contract of sale.”
On the 62 per cent of respondents cautious about buying with family or friends, Mr Nolan said co-ownership agreements could be risky if one person wanted to sell or situations changed.
But he said co-buying had its advantages, urging anyone considering it to have an agreement drafted by a lawyer.