What happens in a building and pest inspection?

Buying a new home or investment property is one of the biggest investments most of us will ever make.

When you find the place you think is right for you, why wouldn't you want someone to cast a critical eye over it and warn you of potential flaws you mightn't be able to see?

Building and pest inspectors can save property buyers thousands of dollars - or at least let them know what they might be up for.

Getting a building or pest inspection should be a no brainer, but some buyers still choose to forgo them, particularly in hot markets where some might believe asking for inspections could see them miss out on a property.

Do I need a building and pest inspection?

In a word, yes.

A pre-purchase building and pest inspection will ideally be a condition of sale on your contract.

Even if you're wanting a quick transaction or you've have fallen in love with a home, it is recommended you arrange building and pest inspections before you go ahead with the purchase.

Building and pest inspections allow the opportunity for someone with a trained eye to closely inspect the property and draw your attention to things that often aren't discernible when you're being shown through in a routine home inspection.

They provide peace of mind and, often, a safety net if there are any issues detected (which we'll cover in more depth below).

To put it another way, it's like getting a mechanic to check over a used car you want to buy. You can choose not to, but doing so can save you a lot of money and angst.

Building and pest inspection: what do they look for?

First of all, building and pest inspections can be done separately or together. You can opt to have one and not the other, but it's standard (and generally more cost-effective) to have them done simultaneously. Some companies will have one person to do both inspections; others will have separate building and pest inspectors working together to produce their reports. You can also engage separate specialists for the job.

In simple terms, a building inspection aims to determine the structural integrity of the property and should investigate all areas, from top to bottom. That includes going into the roof and under the house. A building inspector should examine:

• structure and foundations

• rooves and eaves

• Any signs of water, stains, mould, or corrosion inside and out

• ventilation, drainage, guttering, downpipes

• ceilings and walls

• cabinets

• fencing and retaining walls

• plumbing and electrical systems

Pest inspections also involve a thorough examination of your home to determine the presence (or past infestation) of termites and other pests such as ants, cockroaches, rats, and mice. Pest inspections give more focus to:

• roof voids

• subfloors

• all rooms in the house

• fences

• stumps and surrounding trees

Australia's termite problem

Termites are a significant focus for pest inspectors on the Australian mainland (Tasmania is considered low risk for termite activity). One report estimates one in three Australian homes will be treated for termite infestation or damage at some stage of their lives.

Although timber homes are understandably vulnerable, the wood-eating bugs have also been found in brick and steel-framed housing. Floor and wall materials make little difference, according to research. The biggest risk factor for termites is rainfall and temperature, closely followed by a home's age.

Termite activity can often be found behind walls, eaves, or in ceiling spaces - all of which you don't typically see in a routine inspection of a home.

Termites are also said to be responsible for more than 80% of structural damage to Australian homes, and repairs are estimated to cost Australian homeowners around $1.5 billion a year.

As a buyer, it's worth knowing whether you're going up against these silent invaders before making a significant investment in a property.

How long does a building and pest inspection take?

On average, a combined building and pest inspection should take an hour or two. Of course, that depends on how large the property is, whether the inspector encounters any difficulties, and the age of the house - older houses often take a bit longer.

How much does a building and pest inspection cost?

Generally speaking, building and pest inspections cost around $300 to $700, depending on the location, how large the property is, and what company you engage to do them. They are generally more expensive in urban areas than in regional areas.

In any case, it's a relatively small price to pay compared to buying a home that needs extensive repair or remediation work.

How long does it take to get a building and pest inspection report?

This varies from company to company and the nature of any issues that may have presented at the inspection. Many companies are used to turning around inspection reports quickly, particularly if they are aware a report is needed before settlement takes place. Some even offer same-day reports, though others may charge extra for fast turnarounds.

When your offer on a property is accepted, it's advised to contact the real estate agent as soon as possible to arrange a time and date for inspections to take place, as these need to fit in with your contract and settlement requirements.

How long is a building and pest inspection valid for?

How long a building and pest inspection will be valid for will depend on which company you engage, but inspections are generally considered valid for four weeks after they're conducted.

Many companies won't provide a guarantee on their reports after that time due to variables that can affect the condition of a property, even right after the inspection has taken place.

For example, a significant storm could render a report outdated hours after an inspection was conducted. It's recommended you check the terms and conditions of the inspection company you engage to ensure your inspection is valid for the amount of time you need it for.

Should I make an offer to purchase a home subject to a building and pest inspection?

Many lawyers advise their clients to make their contracts of sale subject to a building and pest inspection. In basic terms, it means the contract is conditional on the buyer getting a building and pest inspection report that is satisfactory to them.

If the building and pest inspection results in an unsatisfactory report, according to the condition, the buyer can either terminate the contract or negotiate changed terms. This can include asking the seller to fix the issues before the sale takes place or to drop the price so the buyer can tend to what needs to be done after settlement.

A solicitor or legal advisor can advise you on how to include this condition in your contract. It's important to note that purchase contracts need to be prepared in a particular way to ensure the sale is subject to a building and pest inspection. Laws and standard contracts of sale vary between the states and territories so getting timely legal advice is your best bet.

Some states and territories have set times for building and pest inspections to take place after a buyer has signed the contract. Others have time limits on when a buyer must inform the seller on the outcome of the reports. It's strongly recommended you seek legal advice to ensure you are covered under your contract.

In the market for a new home? Here are some of the top home loans available now

If you're considering a property transaction, whether it be for your first home or your tenth, here are some of the lowest-rate home loans on the market right now.

How do building and pest inspections differ between states and territories?

There is an Australian standard for building and pest inspection reports but the rules, requirements, and recommendations surrounding inspections are different according to what state you're buying in.

In some states and territories, sellers are legally obliged to obtain inspection reports before they can list their properties for sale. Although that doesn't mean buyers shouldn't organise their own inspections to be safe.

Be warned, Queensland is the only state that requires building and pest inspectors to be trained, qualified, and registered, or licensed as a builder. Buyers in other states may need to do their homework on whose word they should trust, or who to engage.

Let's check the basics of each jurisdiction.

New South Wales

Building and pest inspections are not mandatory in New South Wales, but sellers, or their agents, are required to pass on the details of any existing inspection reports they are aware of when a buyer asks for a sale contract. There is room for missing information here, so buyers are strongly urged to conduct their own building and pest inspections before a sale goes through.

There is no requirement for building inspectors to be formally trained as inspectors or registered in New South Wales. The state's Office of Fair Trading recommends using a "suitably qualified person" for building inspections such as a "licensed builder, surveyor, or architect". Pest inspectors have to meet minimum training standards for inspecting and reporting on timber pests to obtain insurance.

Victoria

Building and pest inspections are also not mandatory in Victoria, although Consumer Affairs Victoria recommends buyers consider engaging a qualified building inspector, surveyor, or architect to provide a professional building report. The Victorian Building Authority also urges buyers to have homes inspected for pests before they buy.

Sellers are obliged to disclose certain "material facts" to prospective buyers before selling to them. These facts include structural defects, non-compliant building work, infestations, and a number of other disclosures

Queensland

Currently, there is no formal requirement for sellers in Queensland to prepare reports or disclose building and pest matters to prospective buyers. In Queensland, it is the obligation of buyers to organise their own building and pest inspections with a qualified and registered inspector or inspectors. Sometimes they can be the same person or two different inspectors working in tandem through the one company.

As touched on above, Queensland is the only state where building and pest inspectors must be qualified, registered, and licensed so Queensland buyers have some assurance their inspections will meet minimum standards.

Fun fact: Queensland also has licensed swimming pool inspectors, who you might turn to if the property you're interested in has a pool.

Western Australia

Like Queensland, there is no mandatory disclosure statement required by sellers in Western Australia, although their agent is obliged to ask them about building approvals and any renovations they might have undertaken. As such, buyers are strongly urged to organise their own building and pest inspections, generally after an offer has been placed on a home.

There are some minimum requirements for building inspectors in Western Australia, including a Diploma of Building and Registration. They should also have Unit 6 and 10 qualifications for timber pest inspections.

It's recommended WA buyers check whether their inspectors are members of the Housing Industry Association or Inspect WA before engaging them.

South Australia

South Australian sellers are required to produce what's called a Form 1 to prospective buyers to disclose certain things about their property including illegal building work and any structural damage caused by pests. In most cases, Form 1s are organised by real estate agents engaged to sell the property and can sometimes be inaccurate, or 'defective' in legal terminology.

The South Australian government recommends buyers engage their own pre-settlement building and pest inspections to be certain of what they are buying.

There are no minimum requirements for building inspectors in South Australia. Some inspectors have BLD licence numbers, but these may not necessarily be in building and can pertain to other associated trades. The state government recommends engaging a surveyor, architect, or building consultant for a building inspection. Pest inspectors in South Australia must meet accreditation requirements.

Tasmania

There are no disclosure requirements for sellers in Tasmania, so buyers should organise their own building and pest inspections. The Tasmanian government recommends making a pre-purchase inspection part of a buyer's due diligence before buying a property.

It warns pre-purchase inspectors don't have to hold a building services provider license in Tasmania and advises buyers to seek out licensed building surveyors and builders to carry out the inspections. Although Tasmania is considered a lower-risk state in terms of termite infestation and damage, it's worth including a pest inspection as part of your pre-purchase to detect the presence of other pests.

Australian Capital Territory

Sellers in the ACT have most exhaustive list of pre-sale disclosure obligations in the country including providing building and pest reports (with invoices). Both reports must be undertaken less than three months before the property is listed for sale and must be physically attached to the contract of sale.

But, bear in mind, this is a requirement for houses and townhouses only. If you are buying a unit, the seller is not required to provide building and pest reports. In these cases, it's advised buyers organise their own. In the ACT, the seller pays for building and pest reports initially but this is adjusted at the settlement of the property, so the inspections are actually paid for by the buyer.

Despite the arrangement, some buyers in the ACT still choose to pay for their own building and pest inspections to be certain. It's also worth noting all inspection services in the ACT must have professional indemnity insurance in case they miss a problem in their inspections. ACT buyers should use their own judgement.

Northern Territory

Buyers in the Northern Territory should organise their own pre-sale building and pest inspections. They are not mandatory but strongly recommended.

Who can conduct building inspections in the Northern Territory is not regulated, although pest inspectors are generally licensed. Many NT companies offer the services together. It's advised buyers look for an experienced, licensed builder to carry out their building inspection. It's always wise to add a pest inspection on top of the service, given termite activity is prolific in the Northern Territory.

This article was originally written in June 2011. Last updated in May 2024.

_{Image by Oleg Stepanov on Unsplash}