When Toshi began the search for her first home in Melbourne, she had spent years saving for the deposit and even had a small buffer for unexpected costs. What she didn\u2019t expect was to spend more than $3,000 on building and pest inspections before she\u2019d even bought a place.<\/p>\n
\u201cTo be honest, I never thought it was going to be that expensive,\u201d she says.<\/p>\n
\u201cBut I eventually understood that paying $600 for an inspection helped me make the right decision and saved me from buying a property that would\u2019ve cost a lot more than that to fix.\u201d<\/p>\n
Toshi, who asked that her surname not be used, paid for six inspections \u2013 costing between $300 and $600 each \u2013 over a period of 18 months.<\/p>\n
One report came after she had already made an offer on a house, subject to its findings. It revealed structural damage.<\/p>\n
\u201cI was about to put all my savings towards the purchase of this house, so I was very lucky to have that clause in the contract,\u201d she says.<\/p>\n
Another property, a \u201clovely weatherboard home\u201d, appeared \u201cperfect\u201d at first glance. But the inspection revealed a serious drainage problem.<\/p>\n
Buyers like Toshi are exactly who the Victorian government had in mind this week when it announced plans to introduce mandatory building and pest inspection reports if re-elected in November. Under the proposal, vendors would be required to organise and pay for the inspections and make the reports available to all potential buyers.<\/p>\n
\u201cWhen you\u2019re selling a car, the seller needs to provide a roadworthy certificate to all of the interested buyers,\u201d the premier, Jacinta Allan, said on Thursday. \u201cThe same approach needs to be taken for interested buyers looking at buying a home.\u201d<\/p>\n
The government cited a 2022 Consumer Policy Research Centre report <\/a>showing almost half of buyers pay for multiple inspections while searching for a home. About 17% obtain seven or more reports, while another 17% buy without any inspection because of cost and hassle.<\/p>\n Bronwyn and her husband spent about $2,400 on building and pest inspections during a \u201cwhirlwind\u201d three-month hunt for their first home.<\/p>\n \u201cIf you get lucky the first time, you just pay for one but we had to do three,\u201d she says.<\/p>\n Bronwyn has \u201cno regrets\u201d about the money they spent on reports and admits to being skeptical about the government\u2019s plan, worrying it may \u201cgive people a false sense of security\u201d as vendors have a \u201cvested interest in a clean building inspection\u201d.<\/p>\n Victorian premier Jacinta Allan and consumer affairs minister Nick Staikos speaks to reporters about the proposal in Melbourne. Photograph: Jay Kogler\/AAP<\/p>\n Victoria\u2019s consumer affairs minister, Nick Staikos, says consultation on the proposal will begin this year with stakeholders and the ACT government, currently the only jurisdiction in Australia requiring vendors to provide building and pest reports.<\/p>\n What will be contained in the reports, who will be accredited to complete them, and safeguards against conflicts of interest are yet to be finalised \u2013 but Staikos says it would include whether the property is structurally sound, contains mould or termites or leaks.<\/p>\n Robert German, director of Full Circle Property Advocates and a 40-year veteran of the industry, says the reform is \u201clong overdue\u201d and should be followed by other states.<\/p>\n A building and pest inspection typically costs between $500 and $700, German says, and he is aware of buyers who have spent up to $7,000 on reports while bidding at multiple auctions.<\/p>\n But German argues the issue is partly a symptom of a larger problem: underquoting<\/a>.<\/p>\n \u201cSome people might get 10 of these reports because they have rocked up at an auction assuming the property was within their price range when it isn\u2019t,\u201d German said.<\/p>\n \u201cThey may not have spent the money on a building and pest inspection if they had known the property was going to sell well above the quoted range.\u201d<\/p>\n Sign up for the Breaking News Australia email<\/a><\/p>\n Another Victorian government reform announced this week aims to address that issue. Staikos on Friday said new underquoting laws to be introduced to parliament in June would also require sold prices to be made public.<\/p>\n \u201cThe price of a home in large part is based on the property sales of comparable properties in the area and that is why non-disclosure of the sale price can distort the market. It makes it more difficult to tackle underquoting,\u201d Staikos said.<\/p>\n The reforms have been welcomed by the Real Estate Institute of Victoria, which recommended both in a report released in January<\/a>. But they aren\u2019t supportive of the centrepiece of June\u2019s legislation \u2013 the government\u2019s proposal to force sellers to disclose their reserve price <\/a>seven days before an auction. They are calling for three business days instead.<\/p>\n