E104. What happens when a seller doesn't tell you everything when purchasing a property?

 In this episode of the Building Design, Prime Time Podcast, Amelia and Frank explore the lack of consumer protection in Australia’s housing market and the risks buyers face when purchasing a property. Frank begins with an imagined “ideal” inspection report to illustrate the level of detail buyers should receive but rarely do, pointing out hidden dangers like unapproved works, mould, or poor construction that often go undisclosed. They highlight the stark contrast between housing and other industries, such as vehicles or electronics, where stronger consumer safeguards exist. The discussion emphasises the need for open or mandatory disclosure, better professionalism, and stronger protections to prevent families from inheriting costly or unhealthy homes. To close, they suggest buyers take proactive steps such as engaging independent inspectors, requesting full council searches, and being as thorough as possible given the "buyer beware" when purchasing a property. 

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About us
Prime Design is a building design company locally owned and operated in Tasmania since 2004.  Our goal is to share as much valuable information as possible about the process of building design, extensions, and more. We will talk about a different topic each week. To suggest a topic you would like us to talk about contact us at info@primedesigntas.com.au

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The information provided on this podcast is for educational and informational purposes only and is not intended to be a substitute for professional advice, individual circumstances, or remedy. We strongly suggest you consult a qualified professional before taking any action based on the information provided in this podcast. The views, opinions, and information provided in this podcast are those of the hosts do not necessarily reflect the official policy or position of any other agency, organisation, employer, or company. All content provided on this podcast is provided “as is” without warranty of any kind. We make no representations as to the accuracy, completeness, currentness, suitability, or validity of any information on this podcast and will not be liable for any errors, omissions, or delays in this information or any losses, or damages arising from its use. We reserve the right to change content or delete any information provided on this podcast at any time without prior notice.

Transcript

E104. What happens when a seller doesn't tell you everything when purchasing a house?

[INTRO] (0:08 - 0:35)

Hello and welcome to the Building Design, Prime Time Podcast, focused on providing valuable information for anyone looking to undertake a new build or extension project. We'll share our tips, tricks and stories from a building designer's perspective. 

[Amelia] (0:35 - 0:44)

Hello and welcome to the Building Design, Prime Time Podcast. I'm your host Amelia and once again we're joined by Frank Geskus. 

[Frank] (0:44 - 0:45)

Hi Amelia. 

[Amelia]

Ah, happy Friday.

[Frank] (0:45 - 0:45)

Happy Friday.

[Amelia] (0:46 - 0:46)

I'll say it again.

[Frank] (0:47 - 0:48)

You love Fridays, don't we all love Fridays?

[Amelia] (0:48 - 0:49)

Don't we all.

[Frank] (0:50 - 0:53)

All right. Hey, a mate of mine just bought a new house.

[Amelia] (0:53 - 0:54)

Yeah.

[Frank] (0:54 - 2:58)

Well, they're about to go through it. And it's a beautiful character home. It was only about 40 years old, so very nice, still quite original.

And the building reports came out far better than I expected for something that was 40 years old. 

[Amelia]

Really? 

[Frank]

Yeah. Normally expect a few little odd things, but like I did a full electrical scan, checked everything, and there was only a few minor issues, which 40 years old. The air conditioning was in excellent condition and all met the requirements. There's a few appliances that need replacing, but that's not unusual.

The plumbing, including the water lines, all really good. The hot water service was only about four years old. Had an extension done 12 years ago and that had all its completion certificates.

They did a mould investigation throughout, the standard mould investigation, so very minimal problems. So the house has been well maintained. They've put extra fans into the wet areas.

They went through all the past insurance claims of the building, and there was nothing major, a few minor things, no major repairs. They did a full insulation scan, a thermal check on the building. And, you know, considering it's 40 years old, the insulation was great, but the ceiling, up in the ceiling, they put more, they've upgraded the batts on the extension.

It was all pretty good, not too many holes in the thermal. So they had it thermally assessed, and the star rating came back at about 4.3. And no disputes came up in the council records, which is pretty, yeah, not bad. And all certificates were clear.

And then there was only one hiccup. There's Colourbond shit in the back that was missing its permits, but it wasn't going to be hard to get sorted. 

[Amelia]

Okay.

[Frank]

So it was pretty straightforward. Yeah, it's gone through like a dream. So they're just checking all the legals now, and hopefully they're going to move on to that.

The bank is very happy with the reports of the building.

[Amelia] (2:59 - 3:01)

Wow, that sounds incredibly thorough.

[Frank] (3:02 - 3:05)

It is. Shame it's a bit of a fantasy, isn't it?

[Amelia] (3:06 - 3:07)

What are you talking about?

[Frank] (3:09 - 3:15)

Well, no such reports exist. What? This is a total fantasy.

[Amelia] (3:15 - 3:18)

So your friend didn't get all of those things done?

[Frank] (3:19 - 3:22)

I'm telling you a big story. This is how it should be done.

[Amelia] (3:23 - 3:23)

Okay.

[Frank] (3:24 - 3:31)

So in the real world, if you go buy a house, you have to figure all this stuff out yourself. It's by-the-way.

[Amelia] (3:32 - 3:35)

So you probably don't get access to the permits?

[Frank] (3:36 - 3:38)

Only if you ask, with the owner's permission.

[Amelia] (3:38 - 3:39)

Yeah.

[Frank] (3:39 - 3:40)

No-one checks the electrical.

[Amelia] (3:40 - 3:41)

No.

[Frank] (3:41 - 3:45)

No-one checks if the AC is okay. No-one checks if the plumbing is okay.

[Amelia] (3:46 - 3:53)

I don't know anyone that would have done a mould inspection before they purchase.

[Frank] (3:53 - 3:59)

Yep. So what I've just shared with you would be an ideal report that every house probably should have.

[Amelia] (4:01 - 4:06)

So we're talking about mandatory disclosure. Is that what you're alluding to?

[Frank] (4:06 - 4:24)

Well, this is even further than mandatory disclosure. So hopefully I'm not confusing everyone out there. But I wanted to share with you what I think should be done on every house when you go purchase a house.

Considering the average house price around Australia has gone through the roof, like in Sydney, I think they're well over a million dollars.

[Amelia] (4:24 - 4:26)

Yeah, the average is, I think.

[Frank] (4:26 - 4:27)

How do you know you're not buying a piece of crap?

[Amelia] (4:28 - 4:29)

Well, exactly.

[Frank] (4:29 - 5:30)

How do you know it's had insurance claims and they've had major repairs? And how do you know that it hasn't got all its permits? How do you know that the plumbing is not spot on?

How do you know thermally... It performs. ...or for the age of its building? This is all a dream. And in most, virtually every space in Australia, bar of Queensland, beginning of this month in Canberra, they don't have even half of this stuff, but it's still better than what we have now, which is bugger all. 

[Amelia]

Not much, yeah.

[Frank]

Sweet bugger all. And isn't this... This is an opinion piece.

I want to point this out to everyone. This is purely my opinion. Why should we be allowed to go out, buy houses that people have mucked with, never got permits, flip it for money, bodgy dodgy alterations or extensions or change something, and you're left with this problem?

[Amelia] (5:31 - 5:42)

Yeah, and that's the thing. Us as building designers, we often get called in and we're that person that has to try and fix these poor people's problems that they've inherited.

[Frank] (5:42 - 5:44)

And sometimes we've got to say no. We can't fix this.

[Amelia] (5:44 - 5:46)

Well, that's the thing. Sometimes we can't fix it.

[Frank] (5:47 - 5:57)

No one can fix it. No. But imagine if someone's done something and makes it an unhealthy home that you move into and makes you and your family sick due to mould.

Imagine that.

[Amelia] (5:58 - 5:59)

Yeah.

[Frank] (6:00 - 6:11)

How wrong is that? So wrong. So, if it's buyer beware and you don't know what you're looking for, you don't know who to turn to, who are you going to trust?

[Amelia] (6:12 - 6:12)

Mm.

[Frank] (6:14 - 6:25)

So, no offence to the real estate agents out there, but there are some fantastic real estate agents I deal with a lot and I've got a huge amount of respect for them. I've got some other ones and I…

[Amelia] (6:25 - 6:26)

Wouldn't go near them.

[Frank] (6:26 - 6:43)

No. So, which is really unfortunate. This is every industry.

I take my hat off to the real estate agents that do amazing jobs and look after their customers. So, the lack of protection is pretty scary when you compare it to buying vehicles and there's heaps more protection.

[Amelia](6:44 - 6:44)

Yeah.

[Frank] (6:44 - 7:22)

You know? Insurance information where a car's been in an accident. You can't do bodgy repairs.

You know? The lemon laws as such. There's consumer guarantees with white goods, electronics.

You know, there's all sorts of other protections, but why isn't there bigger protections on not just houses, units, stratas, apartments, all sorts of stuff? And you've seen all these people in Sydney that had some dodgy high-rises built and people have lost everything. 

[Amelia]

Yeah.

[Frank]

They're paying repayments on something they can't live in.

[Amelia] (7:22 - 7:23)

Yeah, it's pretty bad.

[Frank] (7:23 - 7:24)

It should never happen.

[Amelia] (7:24 - 7:24)

Yes.

[Frank] (7:25 - 8:54)

Now, New South Wales government has actioned it and that's great, but still it shouldn't be heading off because you've got unscrupulous people building stuff. Now, you could have that on any level of construction. So, there's got to be greater protection to the consumer, especially now that your average house prices have just gone unbelievably high.

The cost of construction, the cost of repair, the cost of everything has just gone right through the roof. There has to be more protection. There should have been more protection 50 years ago.

Exactly. So, why are we lagging behind? I do not understand any of this.

So, why do you have to fix up other people's stuff-ups? There should be a better way of doing this. What is the true cost?

There's no way of measuring the true cost of people buying something and it's wrong. Remember, we were just talking about you go onto the ABC Tasmania and how many reports are on there that people have bought properties and there's chunks of no permits, bodgy, dodgy, can't get it passed, falling down, massive mould issues, leaking like a sieve, you name it. Very sad.

So, I think part of the solution is simple protection. None of this complicated politician bullshit legislation, just bare bones, simple protection for customers. Doesn't sound that hard, surely?

[Amelia] (8:55 - 8:56)

Well, you wouldn't think so.

[Frank] (8:57 - 9:00)

I'm sure a politician or some guy behind a desk can make it hard.

[Amelia] (9:01 - 9:02)

Yeah, yeah.

[Frank] (9:02 - 9:18)

So, it should be open disclosure of everything from every insurance claim, everything with counsel, you know, from potential damage, complaints. There's a way of checking a lot of things. There's a way of measuring mould spores in the air.

[Amelia] (9:19 - 9:20)

Yes.

[Frank] (9:20 - 9:30)

How people operated the home, looking under a house, through the structure. There's a tonne of different ways to inspect a home. Now, it's not perfect, but it's better than what we're doing now.

[Amelia] (9:31 - 9:33)

Yeah, anything's going to be better.

[Frank] (9:34 - 10:25)

So, we need to get greater professionalism. This is only my opinion, so I've got to share that with everyone. It's not anyone else, it's just me.

There needs to be more trust between the buyers and the sellers, fewer costly surprises, and greater professionalism in the property transactions. Because we've got to try and find a better way to protect mums and dads or young people or whoever's buying houses or units, apartments, whatever it may be, that can have an easy pathway so they are fully protected. So, yeah, there needs to be more truthfulness, I suppose, through the transactions.

And unfortunately, there's so much money to be made in housing, there's going to be people that are going to do unscrupulous things.

[Amelia] (10:25 - 10:26)

Yes.

[Frank] (10:27 - 10:34)

And there is no takeaway points. This is just an opinion piece.

[Amelia] (10:34 - 10:50)

Yeah, I guess all we can really recommend is, if you are in the market for a home, is that you do take the steps to do as much due diligence as possible. You know, get a building inspector to come and have a look.

[Frank] (10:50 - 10:57)

And if the real estate agent says, I don't like that building inspector, I don't want him on the house, you've got the right one.

[Amelia] (10:58 - 11:01)

Yeah, that's true. Yes.

[Frank] (11:01 - 11:04)

I've had this happen twice, I've heard this.

[Amelia] (11:04 - 11:04)

Yes.

[Frank] (11:05 - 11:13)

Which is very sad. So should never... Yeah, real estate agents should allow whoever they like, the customer wants to check out the buildings.

[Amelia] (11:14 - 11:25)

Yes. And, you know, maybe the owners are happy to disclose anything that they've had done and provide certificates for things. It's just a question you can ask.

[Frank] (11:25 - 11:31)

And the full search within the council for all the permits and then checking against what's actually on site.

[Amelia] (11:32 - 11:40)

Yes, yes. So there are a few things you can do, but I guess they're just things you have to be aware of when you are in the market for a property.

[Frank] (11:41 - 11:50)

Do you reckon we could put something on our website for people can download? Sure. Just from our opinion?

Yeah. It's just a free...

[Amelia] (11:50 - 11:50)

Like a checklist?

[Frank] (11:50 - 11:59)

Checklist. So then it helps you be fully aware and what expectations, you know, when buying a property.

[Amelia] (11:59 - 12:05)

Or have a listen back to one of our previous episodes. We had Wayne Gorman come in.

[Frank] (12:06 - 12:08)

Yep. Pre-purchase inspector. Fascinating stuff.

[Amelia] (12:08 - 12:15)

He told some pretty interesting stories of some things that he's found on property.

[Frank] (12:15 - 12:21)

The good, the bad, the ugly. 

[Amelia]

Yes. 

[Frank]

But definitely you can learn a lot from that and save yourself buying the wrong property.

[Amelia] (12:21 - 12:25)

Exactly. Yes. Nice short and sweet one today.

[Frank] (12:25 - 12:25)

It is.

[Amelia] (12:26 - 12:29)

We might wrap it up there, folks. Thanks for listening to the Building Design, Prime Time Podcast.

[Frank] (12:30 - 12:30)

Catch us later.

[OUTRO] (12:39 - 12:43)

You're listening to the Building Design, Prime Time Podcast.