Hi all,
Well as you may have read from this thread http://www.somersoft.com/forums/showthread.php?p=245373, I just got a pest inspection done on a property I am looking at purchasing in Yarraville, Melbourne. The price I negotiated with the vendor is $290k and I was planning to spend around $30k in renovations. Once complete, I would estimate the property to be worth in the $360k-$380k range. Note that I hadn’t budgeted for any structural damage, termites, or anything like that.
Ok now to the pest inspection. The inspector I used was quite good. There wasn’t much clearance getting under the house and I had to rip off one of the planks of wood to let him crawl in (luckily he was a small guy). He spent a good 30 minutes under the house looking around. While doing his thing with the screwdriver, on of the joists he tapped was completely eaten by termites. Being about 4” thick, this was quit severe. He could only access about 2/5 of the sub-floor as the clearance towards the rear was very low. He could see that the chance of termite damage at the rear of the property was more than likely as the bearers were actually in contact with the soil. The stumps around the perimeter of the property had been replaced with concrete, whereas the ones in the centre were all wood with no termite shields! He could see mud piled up around the rear stumps from a distance and said it was likely termites had gone straight up.
One of the bedroom windows was completely eaten away. I had initially thought it was termite damage, but the owner convinced me it was water damage. The fact that termites have reached the window indicates that the studs would have also been attacked as that is the only way up! The skirting boards and architraves in the same room also had serious termite damage. The inspector managed to detect some live termite activity in a couple of the skirting boards with his TermaTrac device (little mongrels!). You could see that one part of the wood was all soft and rotten, then further up it was solid.
The rear of the property (bathroom and laundry) has been replastered and there appears to have been some structural work done as well, including floors. Another tell tale sign that there could have been previous damage. This is the part of the property which the inspector couldn’t access from underneath due to the low clearance. There were also a few timber sleepers in the backyard which had been chewed away.
I was meant to have a separate building inspection done this afternoon but the results from this inspection prompted me to cancel. I can see that the costs involved in repairing this house are now far greater than what I had expected. The inspector said the following would be involved:
- Completely remove all the floorboards from inside and dig out all the junk, dirt, rocks, etc from under the house. Access is difficult, so this is the only way. Then top up with clean topsoil.
- Repair/replace any damaged joists, bearers, stumps, studs, etc…
- Replace damaged window, skirting boards, architraves
- Chemically treat the soil and surrounds (roughly $4k - $5k)
- Install new timber floorboards (the old ones would most likely be cactus, they already have borer damage in places).
- The plaster may need to be removed in places to check for damage within the walls, which could lead to more work if damage is found.
I’m sure there is more to add to the list. It appears that the chemical termite treatment is only a minor cost when you look at the big picture. I would expect the majority of the costs to be structural repairs. Another big concern the inspector had was that there are many unknowns. There were parts of the sub-floor that he considers to be “high risk” which he couldn’t access. The fact that repairs had been done in areas is also a good indicator that there were/are issues.
The vendor was present during the inspection and he too was surprised with the results. He could see that I was somewhat put off by the findings and is worried that I will pull out of the deal now. He was quick to mention that he is willing to negotiate the price down if I am still interested. I don’t know how much more negotiable he is though.
Can someone who has had similar experiences with termite damage to their properties give me some advice of how to proceed? Do you think it’s worth me pursuing this deal? Should I get the building inspection done? I am worried that I’ll run into the same problem with the building inspection, i.e. the builder not being able to fully estimate the extent of damage and repairs needed. To me it looks like one of those projects where you won’t fully know the extent of damage until you get in there and start ripping off floors, walls, etc… Would you agree?
Apologies for the long post. Hopefully I can get to valuable feedback.
Regards,
Ozi
Well as you may have read from this thread http://www.somersoft.com/forums/showthread.php?p=245373, I just got a pest inspection done on a property I am looking at purchasing in Yarraville, Melbourne. The price I negotiated with the vendor is $290k and I was planning to spend around $30k in renovations. Once complete, I would estimate the property to be worth in the $360k-$380k range. Note that I hadn’t budgeted for any structural damage, termites, or anything like that.
Ok now to the pest inspection. The inspector I used was quite good. There wasn’t much clearance getting under the house and I had to rip off one of the planks of wood to let him crawl in (luckily he was a small guy). He spent a good 30 minutes under the house looking around. While doing his thing with the screwdriver, on of the joists he tapped was completely eaten by termites. Being about 4” thick, this was quit severe. He could only access about 2/5 of the sub-floor as the clearance towards the rear was very low. He could see that the chance of termite damage at the rear of the property was more than likely as the bearers were actually in contact with the soil. The stumps around the perimeter of the property had been replaced with concrete, whereas the ones in the centre were all wood with no termite shields! He could see mud piled up around the rear stumps from a distance and said it was likely termites had gone straight up.
One of the bedroom windows was completely eaten away. I had initially thought it was termite damage, but the owner convinced me it was water damage. The fact that termites have reached the window indicates that the studs would have also been attacked as that is the only way up! The skirting boards and architraves in the same room also had serious termite damage. The inspector managed to detect some live termite activity in a couple of the skirting boards with his TermaTrac device (little mongrels!). You could see that one part of the wood was all soft and rotten, then further up it was solid.
The rear of the property (bathroom and laundry) has been replastered and there appears to have been some structural work done as well, including floors. Another tell tale sign that there could have been previous damage. This is the part of the property which the inspector couldn’t access from underneath due to the low clearance. There were also a few timber sleepers in the backyard which had been chewed away.
I was meant to have a separate building inspection done this afternoon but the results from this inspection prompted me to cancel. I can see that the costs involved in repairing this house are now far greater than what I had expected. The inspector said the following would be involved:
- Completely remove all the floorboards from inside and dig out all the junk, dirt, rocks, etc from under the house. Access is difficult, so this is the only way. Then top up with clean topsoil.
- Repair/replace any damaged joists, bearers, stumps, studs, etc…
- Replace damaged window, skirting boards, architraves
- Chemically treat the soil and surrounds (roughly $4k - $5k)
- Install new timber floorboards (the old ones would most likely be cactus, they already have borer damage in places).
- The plaster may need to be removed in places to check for damage within the walls, which could lead to more work if damage is found.
I’m sure there is more to add to the list. It appears that the chemical termite treatment is only a minor cost when you look at the big picture. I would expect the majority of the costs to be structural repairs. Another big concern the inspector had was that there are many unknowns. There were parts of the sub-floor that he considers to be “high risk” which he couldn’t access. The fact that repairs had been done in areas is also a good indicator that there were/are issues.
The vendor was present during the inspection and he too was surprised with the results. He could see that I was somewhat put off by the findings and is worried that I will pull out of the deal now. He was quick to mention that he is willing to negotiate the price down if I am still interested. I don’t know how much more negotiable he is though.
Can someone who has had similar experiences with termite damage to their properties give me some advice of how to proceed? Do you think it’s worth me pursuing this deal? Should I get the building inspection done? I am worried that I’ll run into the same problem with the building inspection, i.e. the builder not being able to fully estimate the extent of damage and repairs needed. To me it looks like one of those projects where you won’t fully know the extent of damage until you get in there and start ripping off floors, walls, etc… Would you agree?
Apologies for the long post. Hopefully I can get to valuable feedback.
Regards,
Ozi
A few vacant blocks of land nearby a little larger than this one had recently sold in the $300-$350k range, so I would say $290k would be close to land value. But given the restrictions and work involved, it may well be cheaper buying something fixed up without the added headache. My goal was to buy below market value and be able to value-add, however things don't looks so attractive now.
