Homebuyers are risking tens of thousands of dollars in repair bills by skipping vital checks and inspections, according to Compare the Market property expert Andrew Winter who has called for greater transparency.
A survey of 1,000 Australian homeowners* revealed nearly a third (30%) had rushed into purchases without conducting any due diligence such as building and pest reports, area zoning, local crime and flood map checks.
The data showed half of homeowners never received a building report before they purchased, and 57% didn’t get a pest report.
Meanwhile, house hunters were least likely to check the area’s zoning for local development applications (70.7%), flood maps (79.3%) and police reports (91.9%).
Mr Winter said “buying blind” could lead to expensive problems down the track, especially in the wake of recent wild weather events.
“It seems absurd to me that people are spending quite literally hundreds of thousands of dollars but aren’t doing their due diligence before buying property,” Mr Winter said. “Fear of missing out is clouding buyer judgement and people make hasty decisions out of desperation.
“As we’ve seen in recent months with the storms, floods and cyclones – it’s become more important to investigate whether your property is in a natural disaster-prone area.
“For example, if you didn’t do a flood map check and wind up with a house that frequently floods – in some rare instances, you might not be able to get home and contents insurance, or it might be really expensive and unaffordable.
“Damp conditions are also ripe for termites and issues like mould and wood rot which can be very costly to repair. We’re urging homebuyers not to cave to pressure and carry out these potential vital checks.”
| Which of the following steps did you take before purchasing your property? | Percentage |
| I received/commissioned a building report | 50.00% |
| I received/commissioned a pest report | 42.20% |
| I checked the area’s zoning and local development applications | 29.30% |
| I checked flood maps | 20.70% |
| I checked police reports | 8.10% |
| None of the above | 29.10% |
*Survey conducted with 1004 Australian homeowners in September 2023.
Mr Winter said simply asking your agent a few questions could save you years of heartbreak.
“There’s actually no specific law which requires sellers or their agents to disclose whether or not a property is in a flood zone,” Mr Winter said.
“The onus is on individuals to obtain their own flooding information by way of conducting due diligence, by using the council flood maps.
Mr Winter encouraged people to employ an experienced solicitor to help with due diligence so they can make an informed financial decision.
To find more information about the property, you can head to Compare the Market’s website for a free report.
Mr Winter’s due diligence checklist
- Wherever possible, inspect the property in person
Look out for maintenance issues such as broken door hinges and tap leaks so that you can get a rough estimate of how much money you will need to spend in maintenance. You might be able to use this to negotiate a cheaper price.
- Understand your flood risk.
Free flood maps are usually available online to help you understand your property’s risk level and history of flooding.
- Check the area zoning and look for development applications
Zoning can have a significant impact on the value of a property, as well as on its future development potential. You’ll want to be aware if neighbouring blocks are zoned for commercial purposes too.
- Check for local crime
A quick crime map check could help you understand how safe your area is, and whether you might want to bolster your home’s security with better locks and cameras.
- Review of owners corporation/ Body Corporate records and meeting minutes
If you’re buying an apartment or townhouse, checking the Body Corporate records and meeting minutes is important to make sure you know what you’re buying into. If the sinking fund balance in in the red you could have to cough-up for repairs.
- School catchment zones
Some schools have enrolment management programs, so if you fall just outside the school catchment zone, you may not have a place for your children.
- Get a suburb and property report
This will help you understand the property’s potential rental return and historical capital growth. You can download a free suburb and property report in minutes with Compare the Market.
For more information, please contact:
Natasha Innes | 0416 705 514 | [email protected]
Compare the Market is a comparison service that takes the hard work out of shopping around. We make it Simples for Australians to quickly and easily compare and buy insurance, energy, travel and home loans products from a range of providers. Our easy-to-use comparison tool helps you look for a range of products that may suit your needs and benefit your back pocket.
