Home seekers’ fear of missing out has become so extreme many are missing steps in the due dilligence process, putting them at risk of landing a dud property.
Home seekers’ fear of missing out has become so extreme many are missing steps in the due dilligence process, putting them at risk of landing a dud property.

Missed checks haunt rushed buyers

Fatigued house hunters have been rushing into property purchases without doing necessary checks such as building and flood inspections after spending months hunting for a home but coming up empty-handed.

Many spent hundreds of dollars on previous reports on multiple homes but lost to other buyers and grew reluctant to order more, housing experts said.

Data from conveyancing platform Global X revealed nearly 20 per cent of buyers did not get building inspections done on their properties, while a quarter did not undertake pest inspections.

Almost half did not order a valuation and about two thirds failed to check development plans in their local council, along with planning approvals for new infrastructure.

More than 80 per cent of buyers did not check crime rates or potential sinkholes, according to the research.

Flooding on a major northern beaches road. Few buyers check if they are in frequent flood zones.
Flooding on a major northern beaches road. Few buyers check if they are in frequent flood zones.

Global X chief executive Peter Maloney said skipping some checks was an obvious mistake.

It also carried a substantial risk: roughly a quarter of buyers claimed they discovered a problem in their home shortly after purchasing it.

"A surprising number of people seem unaware that information related to issues including fire zones, sink holes and crime are readily available," Mr Maloney said.

"It is common sense to gather as much information as is available. Has the creek down the road flooded before? … Is the council planning road widening? Is there a Proposed Planning Permit registered with the local council for a multi-story commercial office or a doubling of a neighbour's house size?

"Thorough due diligence should absolutely include research into things that are likely to impact liveability and resale value."

Buyers' reluctance to carry out due diligence comes as finance data revealed more than 40 per cent of Sydney home seekers given pre-approval for a loan were yet to secure properties.

Many were struggling to compete for sales given a recent slump in property listings at a time when cheap credit was driving more rival buyers into the market.

Sydney had about 5000 fewer homes for sale than Brisbane in January, despite being twice its size, and total Harbour City listings were down nearly a quarter from a year ago, SQM Research figures showed.

Realestate.com.au chief economist Nerida Conisbee said frustration was mounting for some home seekers, who had few housing choices available and were repeatedly up against "really cashed up" buyers.

A burnt house in Sydney’s south: buyers also seldom check if there property is at risk of being burnt down.
A burnt house in Sydney’s south: buyers also seldom check if there property is at risk of being burnt down.

Global X's Lara Paholski said buyers who took especially long to secure a home often saw property checks as one more exhausting "hoop to jump".

"If they've found something they might not want to know about (the problems), they just want to get through the buying process quickly," Ms Paholski said.

Costs for building inspections vary depending on the provider and property, but usually average about $400-$500.

Home seekers who order reports on multiple houses can often spend thousands without a having a property to show for their investment.

McGrath agent Nicholas Wise said most buyers were hoping to get into the market as quickly as possible.

"The market is still very hot," he said. "Buyers seem to think (prices) will keep going up so they're keen to wrap up their purchases now. They just want to get it over with."

Originally published as Missed checks haunt rushed buyers