Buying a House in Tasmania,
When purchasing a Property in Tasmania, a real estate contract typically includes a defect limit. Before May 2017, this was consistently set at 1% in every contract. Nowadays, defect limits can range from 1% to 5%, and occasionally even as high as 10%. I strongly recommend negotiating a defect limit of 1% or capping it at no more than $10,000 to protect your interests.
The problem with a high defect limit, on a property in Tasmania
Let say you set a defect limit of 3% in the contract for a house priced at $1,000,000, the defect limit would be $30,000. During the building inspection, the inspector identifies several defects. After obtaining repair quotes, the total cost to fix the defects is $25,000. Since this amount is below the agreed defect limit of $30,000, you would be responsible for covering the $25,000 repair cost in addition to the purchase price of the house.
To certify the defects, you'll need to provide quotes. Recently, an agent asked me to prove the defects, even though the defect limit was only $8,500. On top of that, coordinating with tradespeople to get quotes within the required time frame can be extremely challenging, especially since trades are in high demand here in Tasmania. This process can become very stressful, particularly because building inspection clauses typically allow only 7 to 14 days at most.
So try to keep the defect limit on the contract to a minimum of around 1% or no greater than $10,000 and a minimum of 10 days to get the building inspection done
If a house is in good condition, why do they want such a high defect limit!
Don’t use a real estate recommended Building inspector!
As a prospective buyer of a house, unit or a commercial building, it’s important to know that you have the right to select your own building inspector. A real estate agent cannot dictate who conducts your inspection, nor should they attempt to influence the outcome of the report. If an agent tries to control your choice of inspector, it’s a warning sign that they may be trying to hide something. Protect yourself from potential industry corruption by choosing a reputable and professional building inspector, one you’ve carefully researched and trust to provide an unbiased report. Safeguard your investment by making an informed decision.
Get a fully licensed and insured local building inspector and research him:
You're about to spend your life savings so be careful.
Check to see if he is a licensed builder with the Department of Justice Tasmania
Ask to see a copy of his PI insurance
Because without PI insurance a building inspector can't certify the defects if there is a problem.
Try to line up the building inspector early
To take advantage of the 3-day cooling-off period.
A few things that can help
Add the 3-day cooling off period to the contract and make sure you line up your building inspector and get it done in those 3 days.
Get a building inspection before you sign the contract which is common on the mainland or just say NO! It's only going to be 1%
If you are sill unsure, give me a call 0417589089
Get a good lawyer or conveyancer:
If you do it yourself and make a mistake, you could suffer a loss as a result and will be unable to get financial compensation.
Get insurance:
The buyer becomes liable for damages to the property once contracts are exchanged. I've seen a house that was unoccupied and someone broke in and lit a fire on the timber floor after the contract was signed.
Make sure you have the building inspection clause and the 3-day cooling-off period, In the contract:
Plus a minimum of 7-10 days period to get the building inspection done. (Christmas time longer, 21 days)
Not getting a building inspection is like playing Russian roulette with your life savings!
I get people ringing every month with sad stories about how they brought a house without getting a building inspection, it's got major issues, and can I come and have a look!
