How Common Is “Not Accepting Building Inspection or Due Diligence Clause” for Property Sale?

Hi OzBargainers, me and my partner have been looking to purchase a house and found something that we thought was unusual yesterday.

We looked at one ex-display home, which we didn’t mind making an offer. While we were going through the form online to make an offer, we have found the below statements:

Building Inspection Clause

Please note, as we provide a Pre-Sale Building and Pest Inspection report as well as a Develo report for easements etc, we do not accept building inspection or Due Diligence clauses.

If you would like to conduct either of the above, please speak to our agent and they will help you facilitate them prior to signing a contract.

When I enquired further about it, the REA advised that we could get one done before submitting the offer or after we submit an offer. So it’s either blindly trusting the reports provided by the REA or get one done, potentially waste money if the property gets sold to somebody else.

I understand the market is still favouring sellers and what not, but wanted to know how common this is and wanted to get your thoughts on whether you’d skip properties that are not interested in putting the clause at all.

Comments

  • +2

    Not common but not illegal. Aside from the 3 day cooling off (in SA), what is or isnt accepted in a contract is between the parties.

    If they want a clean, quick, no BS sale, they can put in clauses like that. Also no chain, no subject to finance

    • Yea, fair enough. Good to hear it’s not that common. If we run into similar statements more and more, we might need to change our opinion and just make an offer regardless. For now, we will stick to a house where we can get our own reports done, I think!

      • +1

        I think you could probs explore the 'cooling off' part, or get proper independent advice on whether you can add a clause that says 'subject to suitable building inspection'.

      • +5

        What theyre saying is you're free to have an independent inspection done but

        • it cannot be used to cancel the contract
        • it cannot be used to leverage the offer after signing the contract

        What theyre wanting people to do is essentially put their money where their mouth is. That way, any offer made is first and final.

  • +15

    Most building and pest inspection reports are worth slightly less than the A4 printer paper they come on.
    At least in this case, you don't have to pay for the A4 paper.

    Have you even looked at the ones they include?

    • +6

      Sure; the reports may not catch defects and may be worthless but I rather it come from someone I hired than one provided by the REA.

      Reports were to be available after making an offer - which felt like another red flag.

    • +6

      The problem is bad building inspectors get work because sellers don't want good building inspectors. Do a lazy/crap job and get more work because of it. It is win/win for them. They also accept zero liability.

      None of the issues with my house were picked up by the sellers building inspection. If I sell this place I will probably hire the same incompetent inspector.

  • +1

    I understand the market is still favouring sellers

    not really sure of this. but cant say much without know suburb / pricing etc.

    ex-display home

    assuming its relatively new, it would be under the minimum structural warranty?

    • The display house was built in 2016 I believe. So been a while unfortunately. Will just keep looking for now I think!

    • Wow, what a trick. Thank you for sharing it!

    • +1

      Finance clauses need to be very detailed and specific. Just having “subject to finance” is useless and means you have to go through with it or the deposit is gone

  • +1

    If it’s an ex display home, I wouldn’t expect there to be many defects. Maybe they would skimp on bathroom water proofing or something like that, but an inspection wouldn’t pick that up anyway

    • Yea, and that's kind of the biggest fear. Poor water proofing and no users - which makes it hard to check for that kind of thing.

      • Potentially, I was looking at purchasing an ex-display home for the very reasons of, i'd expect it's the best product I am every going to get from the builder. Built in QLD a few years back and it was a fkn nightmare, said I would never do it again if I could avoid it.

        The ex-display home I was looking at, actually had the someone living in it so showers, toilets etc were used.

  • Don’t see what the issue is. Seller is allowing you to get your own inspection done

    • It's something that favours the selling party. And if it's not that common, I won't bother putting an offer in. Don't see it as an issue per se.

  • +1

    Yeah, I would trust their own “building inspection report” about as much as I would trust a self appointed mechanical inspection from Habib’s sickre sled shoppe on his own vehicles.

    Get your own independent inspection done and if they give you grief, walk.

  • Depends on how the clause is written and who wrote it.

  • If you know a builder or planning to reno, get them to view the house with you. A competent builder is much more practical than a building inspection report.

    Anyway I guess you can still put a building inspection condition it's up to them to accept the offer or not. If you offer a better price than others and they still bitch about the condition then perhaps you should stay away from that house.

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