Is it bad to do a Building/pest inspection before signing contract/making a bid?

Question by Bouncing Molar: Is it bad to do a Building/pest inspection before signing contract/making a bid?

I am interested in buying a house in australia (i’m in australia). it has been on the the market for a few weeks. I have booked in a building/pest inspection (usually what you do after you sign a contract with a building/pest clause)

A friend suggested that getting an inspection before making a bid will cause the seller to elevate his asking price because he knows i’ve spent the money on an inspection before bidding..

My thoughts originally were that if i get the inspection first i can negotiate with it…. but perhaps my friend is right, i could theoretically negotiate with a pest/building after making a bid

Also, I haven’t placed a bid yet

8 thoughts on “Is it bad to do a Building/pest inspection before signing contract/making a bid?

  1. You should always inspect things before you purchase them, I would say especially on an investment like this one.

  2. when you buy a $ 10, 000 car do you get it inspected first? of course.
    so you definitely should get the house checked out because there is more money riding in that investment. if he raises the price, you have only lost the inspection price, so it’s like insurance, you pay so you don’t get stung.
    it is also good as a bargaining tool if something needs attention.
    trust me on that one.

  3. Generally, you don’t put money in until you’ve negotiated successfully. My recommendation, put a “bug clause” in your bid, which means that, if you find pests, you can either re-negotiate or back out of the deal. This is a more sensible avenue to take, and doesn’t cost you anything.

  4. I tend to agree with your friend. So long as your bid is not binding, you don’t seem to have anything to lose until it’s been accepted subject to contract. Good luck.

  5. Nothing wrong at all. Here in Georgia, all houses have to have a termite letter before they can be listed with a real estate agent. You do not want a house with termites!

  6. Hello Mate,
    My name is Robert Paisola and I am a Real Estate Investment Trainer, and one of the major parts of purchasing a piece of property, whether it is in the USA or Australia, is to ensure that the property is usable for the intended purpose that you bought it for.
    For example. in the USA, We have the EPA, or Environmental Protection Agency. They monitor the land usage of toxic sites such as old gas stations.
    Your case with the insect and pest control could be a massive problem that could prove fatal to your desired use of the property, so I would have the investigation performed PRIOR to placing the offer and if you still want the property, simply negotiate the reimbursement for the fee at Escrow!

  7. I would place the bid, but add a clause in the contract stating that the bid is contingent upon a successful pest inspection AND a successful building inspection. That way, you can back out of the bid and receive your “earnest money” deposit back, should something bad show up, either structurally or with pests.
    If you get the inspection done before you place the bid, you have no way of knowing whether someone else is on the verge of making a bid that’s more attractive than yours.

  8. I wouldn’t put the money out for inspections before having an accepted offer. Your offer can be contingent upon satisfactory inspections and once you have the inspection you can negotiate using your findings (if there is work to be done you can lower your offer). Make an offer first though, nothing is final until you sign contracts.

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