Would you (and should you) purchase a property without seeing it?

Aug 30, 2020

COVID-19 has turned the world as we know it upside down and many things which were previously foreign to us have become the ‘new normal’. With the introduction of Stage 4 restrictions in Victoria, online shopping is currently our only option to buy non-essential consumer goods and products and we have very quickly become very comfortable buying all kinds of goods and products sight-unseen, but would you (and should you) purchase a property, without seeing it first?

What’s the problem?

Intuitively it seems a ridiculous concept, but is it?

Whilst many people are dead against it, it has been happening and in reasonable numbers.

In fact it’s not even a new concept. If you think about it, off-the plan sales are not much different, and they have for many years accounted for a high proportion of residential property sales. Buyers have become comfortable with buying real estate off a set of plans and pictures.

As lawyers, we usually recommend building inspections and title surveys prior to buying, but the reality is that many people don’t take that advice anyway (particularly in a competitive property market), instead forming the view that there is a level of risk that they can get comfortable with.

Reducing the risks

Of course there are advantages in pre-purchase inspections and advantages in having professionals conduct quality and title assessments. If these can’t be done though due to restrictions, then rather than advising against it and depriving a person of what might be their dream home, there are ways to reduce those risks to a level which might be acceptable to particular buyers.

These may include a combination of any of the following:

  1. A Contract which is conditional on an inspection or a building expert’s report to the satisfaction of the purchaser within 7 days after restrictions ease.
  2. Removal of the usual buyer – beware provisions and inclusion of warranties that the vendor is not aware of any defects or quality issues.
  3. Additional vendor warranties around dimensions (of the land, the home, the rooms etc, even ceiling heights if they are important to you), permits, functionality of services.
  4. The inclusion of detailed disclosures regarding defects, repairs and other issues which would normally be uncovered by an inspection.
  5. Inclusion of obligations to attend to matters that are discovered at the pre-settlement inspection.
  6. Warranties regarding the accuracy of the marketing descriptions and videos.

As lawyers our role is not to prevent people from doing what they want. But it is our role to make sure that people are as protected as possible in doing so.