4 April 2017

Ask RiotACT: Disclosing house condition details ahead of auction?

| Masquara
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Hi Rioters.

We’re looking at an oldish house for auction, but the real estate agent is being recalcitrant about us trying the heating, hot water etc. Presumably, if we win at auction and haven’t been able to establish whether there’s heating and hot water functioning in the house, we’re risking buying a house with neither, and no recourse. Is a real estate agent normally required to allow potential buyers to try out these things? They aren’t mentioned in the building report, there’s the usual slippery caveats. The air conditioning unit in the lounge doesn’t seem to have a remote to turn it on anywhere, and the agent has shrugged her shoulders when I’ve asked about the gas ducted heating and said that no-one else has asked to check whether it works. Don’t people check these things as a matter of course if the building report doesn’t specify? Grateful for advice or people’s own experiences in this regard …. Cheers!

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Thanks for all the advice – all taken on board.

Advise from an agent.
I would contact the agent and arrange to register to bid at auction and tell the agent you’d like to arrange a private inspection time to check all the appliances ect or to have your own building inspection completed. The registering to bid will show the agent your a serious buyer (you’d be surprised how many tyre kickers go to open homes). You can also put in a conditional offer prior to auction (the condition being “pending an independent building inspection”) the agent is required by law to take all offers to the vendor. Alternatively contact the principal agent at the agency and explain that the agent isn’t letting you test appliances I’m sure the principal will rectify the situation.

As for the question about murders in a house ect, yes and no any “stigma” related to the house must be disclosed (a murder or asbestos most definitely needs to be disclosed, things like suicide don’t) I don’t think a sheep dip would fall under that category, but would fall under the building inspection (pollutants) but it could easily be missed if it had been removed and all traces of it covered up. A building inspection is only “what they can see” some inspectors will have a look in the roof on the roof, under the house (where possible) but they clearly state in the reports from what they can see. So issues in walls, behind things (like behind vanities in bathrooms ect) may not be detected.

My advise is; always get an independent building inspection done. Where necessary add conditions to your offer (for example; ducted heating to be repaired and functional), always do a thorough pre settlement inspection to ensure all conditions are met, don’t be afraid to make an offer before auction, and be prepared to walk away, the agent wants the best price for the vendor as it’s a higher commission for them so make them work for it. Good luck.

dungfungus said :

Does the vendor (or the agent) have to disclose if there has been a serious crime committed at the property eg, murder, drug manufacture etc.?

What about a sheep dip on the site (can be obtained by search but should it be revealed if known?)

I have been told that if a house has a had a murder that must be disclosed. I think that’s unnecessary, but apparently some people get spooked out by it or something. However, if I were interested in buying such a house I would hope that a murder would be declared, so that some of the competition for the house would fade away and I could get a discounted house. All I would expect, was the blood was cleaned up properly. Now, a sheep dip, that’s much more important to declare than a murder that happened in the house. A sheep dip could have issues for people wanting to garden. Maybe if the house had been selling drugs recently that should be declared too, as customers might still turn up and be a nuisance.
As far as I know I have never lived in a house where a murder took place, but I once lived in a house where a murderer lived (at least according to a neighbour). If I had known that when I bought the house, it wouldn’t have made any difference. I don’t believe that needed to be declared at the sale.

Auctions should be treated like a normal purchase – see a solicitor with a copy of the contract to go through it. Check all appliances prior to exchange (ie auction day in this case) if there is no power or the ability to check them for any reason, have your solicitor draw up a special condition to be included in the contract stating all appliances are in working order. They will liaise with the sellers solicitors and have it approved for inclusion if you are successful at the auction. If then at your pre-settlement anything is not working you can get the seller to fix (a retention of an appropriate amount will be held back on settlement for say 10 days) or allow a monetary sum to be paid to you and you fix.

Agents don’t like extra work…

Does the vendor (or the agent) have to disclose if there has been a serious crime committed at the property eg, murder, drug manufacture etc.?

What about a sheep dip on the site (can be obtained by search but should it be revealed if known?)

There’s nothing stopping you from putting in offers prior to auction also btw. The agent has to take all offers to the owner

Push the point. A sale at auction is unconditional, you have no recourse if you discover things after the auction. Your strongest argument is to threaten to walk, with your money. And that would be the right thing to do if you suspect things aren’t up to snuff and the agent is obstructing attempts to check. If you do discover that there are faulty appliances, that becomes a bargaining chip – you can cost the expense of repair or replacement and knock that off the asking price (or make it your basis for not raising a bid past a particular point). In an auction situation, you may be the best informed, so if others are going past the limit you set yourself, don’t chase them. Let them have the lemon.

This is from some experience – we’ve bought and sold on about seven occasions, the last through auction. Stick to your guns, and threaten to walk if you don’t get to look closely at what you want to.

The building report isn’t worth the paper it’s printed on as they are prepared for the owner, by a business doing it purely for financial gain. You’d be best served getting an independent builder to go through the house. As for trying the facilities and asking those questions, you could play hardball and make a conditional offer of sale provided evidence can be provided of whatever issues you’d like to be assured of. At the very least it might bring to the attention of the owners that their real estate agent isn’t acting in their best interests and are potentially turning away prospective buyers with their “whatever” attitude.

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