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Pre-approved financing - avoid losing it with a pre-purchase building inspection

Buying a home can be stressful at best. It often feels like a lot of things happen at once, it's hard to have all the ducks lined up and buy the home you really want. Therefore, thinking about a building inspection before purchase may not be the first thing on your mind.

pre-purchase bank financing

However, my advice to both new home buyers and seasoned investors is to get pre-approved financing as early as possible in the buying process and to make sure that any home you want to buy is covered by that financing. with a building inspection prior to purchase.

The last thing you want is to fall in love with a house, put the time and energy into making an offer, and then lose it because you can't get the proper financing on time or because the house is not covered by your pre-approval.

What is pre-approval?

When we talk about "getting pre-approved", it is basically a guarantee from your bank that they will loan you money. There are two ways: initial pre-approval and specific pre-approval.

Initial pre-approval can be obtained from your bank at any time, whether you have a home in mind or not; it is basically just an expression of the amount of money your bank is willing to lend. For example, you may receive a letter from the bank saying it has a pre-approval of up to $ 600,000, which means you should limit your search to houses in that range.

Specific pre-approval comes when you have a home in mind. The bank will want to know the details about the home's condition and valuation, along with your income, expenses, and history, and will make a decision based on this whether to loan you money for the particular property you hope to buy. This means you can leave the bank armed with a letter saying, for example, that you will be loaned up to $ 575,000 for 12 Pond Street.

pre-approved financing

Because it is important?

Having pre-approval takes a lot of the worry out of buying a home and gives you an edge over other buyers.

When the market is hot, sellers will often only consider offers from buyers who have prior approval. Think about it from their perspective: you don't want to come to terms with someone who may not even be able to contribute the money; that would be a waste of time, with so many other willing buyers out there. Getting pre-approved means a quick and easy purchase, putting you one step ahead of the rest instead.

Pre-approval also helps you set limits. There's nothing worse than looking at a bunch of open houses, falling in love with your dream home, and then realizing that the bank won't lend you money for it.

What Can Pre-Approval Avoid?

Many factors affect getting pre-approved: your personal finances (income, expenses, type of employment, credit history, assets), home valuation, and condition.

Most of these are out of your control, but not the state of the house. Often times, a home may appear to be in excellent condition aesthetically, but it has significant problems that lie just below the surface. That's where a pre-purchase construction inspection comes in. Some banks may not give pre-approval for homes that may have:

  • Roof problems (rust, major leaks, etc.)
  • Old electrical panel and wiring (may need to be checked by an electrical inspector)
  • Dux Quest plumbing (popular in the 1970s, but found to have serious leak problems)
  • Age (anything before the 1940s may have specific criteria to meet, such as no mesh)
  • Foundations (houses made from old totara poles will generally rot)
  • Liner type (some benches have specific criteria for high-risk types of liner, such as liner in a cavity system)

A good pre-purchase inspection of the building will quickly reveal any of these problems.

Taking the time to invest in a thorough overhaul of any potential home down the road not only means getting pre-approved and a head start on other buyers, but it also saves unnecessary time and heartache, should problems arise.

Instead of letting a building inspection be part of the mad rush before the settlement date, get it out of the way nice and early, and make sure your financial pre-approval is secured with a pre-sale building inspection. buys.

building inspection Sydney

Building inspection prior to purchase is essential

It may seem like one of the most tedious aspects of buying a home, but building inspections are a must!

It is surprising how many people do not think about having a building inspection prior to purchase, or decide not to do so simply for the sake of saving a few hundred dollars.

An inspection is essential for several key reasons:

1. Checking for structural problems

Structural weaknesses can cause cave-ins that can injure a person, but there is also the possibility that the structural problem is nearly impossible to repair without major construction.

The buildings must also meet Australian building codes and standards. If you purchase a home or commercial building that does not meet these standards, you will be responsible for the cost of making the building code compliant.

Doing a building inspection prior to purchase can help you avoid purchasing a building with major structural problems, saving you great financial and emotional pain down the road.

2. Budget for repairs

You may feel that a building in need of some repairs is worth buying because it is available at a discounted price, but going up for sale without an inspection could mean big costs for hidden repair problems.

If you get a building inspection, you will know exactly what needs to be done to get the building to where you would like it to be.

Then you may consider hiring a professional to provide estimates of the repairs that need to be done to complete an accurate estimate for repair costs.

building inspector in Sydney

For renovations, inspections are a value saver and a lifesaver.

3. Electrical wiring and smoke alarms

Faulty electrical wiring can create a dangerous situation that could increase the risk of electric shock or fire.

Not having enough smoke detectors installed increases the likelihood of injury or death in a fire, so invest in a building inspection to avoid serious injury related to fire or electrical wiring problems.

4. Identification of unsafe areas of a home

If you are buying a house for your family, you need to make sure that the house is safe and ready for you to live in.

A pre-purchase building inspection can reveal any areas of the house that will be considered unsafe (the presence of asbestos, missing and cracks within the walls.

Discovering such dangers gives you the opportunity to decide whether you are willing to bear the cost of making the home safe.

5. Evaluation of various structures

The building itself is not the only part of a property that may need the attention of a building inspector; Various structures, including sheds and patios, should also be examined.

City council regulations often dictate where these structures can be built, and buying a building that doesn't meet these regulations may mean taking down a building which may have been one of the reasons you decided to buy the property in the first place.


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