Buying a property—whether it’s your first home, an investment, or a commercial site—is one of the biggest financial commitments you’ll ever make.
Amid the excitement of finding “the one,” it’s easy to overlook the practicalities.
One of the most crucial—but often underestimated—steps in this process is carefully reviewing the building inspection report.
This blog post dives into why checking the building inspection report is essential to avoid hidden costs, unexpected repairs, and regrettable purchases.
We’ll explain what these reports contain, how to spot red flags, and what steps you should take before signing on the dotted line.
Quick Overview: Snapshot Summary
Here’s what you need to know about building inspection reports in a nutshell:
- They reveal hidden defects that may not be visible during an open house.
- Skipping or skimming a report can cost you thousands in post-purchase repairs.
- Red flags include structural damage, plumbing issues, and pest infestations.
- Negotiations and conditions can be based on what’s uncovered in the report.
- Buyers, sellers, and investors all benefit from taking the report seriously.
Want to avoid buying a property lemon? Keep reading—we’ll break it all down for you.
Why Building Inspection Reports Matter
A building inspection report (also known as a pre-purchase inspection) is more than just a formality—it’s a buyer’s safety net. It provides a professional assessment of a property’s structural integrity, safety risks, and potential maintenance concerns.
What the Report Typically Covers:
- Structural issues (foundation, walls, roof)
- Moisture damage or leaks
- Electrical wiring safety
- Plumbing condition
- Termite or pest activity
- Compliance with building codes
These findings are critical because they give you leverage in negotiations—or a reason to walk away.
Pro Tip Box
Pro Tip: Always hire an independent, licensed inspector—avoid relying solely on vendor-provided reports, which may omit key issues.
The Hidden Costs of Ignoring the Report
Overlooking or not fully reading a building inspection report can result in financial surprises like:
- $10,000+ in urgent structural repairs
- Plumbing leaks leading to mould and health issues
- Electrical rewiring to meet safety standards
- Infestations requiring professional pest control
Worse, if the property is not compliant with local building codes, you could be held liable as the new owner.
“Many buyers see the report as a formality. It’s not. It’s your only objective snapshot of what lies beneath the surface.” — Australian Institute of Building Surveyors
Red Flags to Watch For in the Report
When reviewing a building inspection report, some issues should ring alarm bells:
- Cracks in walls or ceilings: May indicate movement in the foundation.
- Sagging roofs or floors: Could signal structural instability.
- Damp areas or mould: A sign of leaks or poor ventilation.
- Electrical hazards: Exposed wires or outdated switchboards.
- Termite evidence: Even past activity can weaken timber.
If any of these show up, it’s time to get a second opinion—or renegotiate.
Quick Guide: What to Do If You Find Issues in the Report
Situation:
You’ve found your dream property, but the building inspection report comes back with some worrying details.
Common Concerns:
- Is the damage superficial or structural?
- Will I be able to get insurance or council approval?
- Can I still back out of the deal or negotiate the price?
How to Handle It:
- Seek a Specialist Opinion: If the report mentions a major concern (e.g. roof structure or electrical wiring), bring in a qualified specialist to assess repair costs.
- Request a Repair Quote: Ask for a written estimate so you can make an informed decision and use it during price negotiations.
- Negotiate with the Seller: You may be able to reduce the price or get the seller to complete repairs before settlement.
- Reconsider Your Offer: Sometimes, the best decision is to walk away. Don’t let sunk costs or emotion cloud your judgement.
Why It Works:
By taking these steps, you stay in control of your investment and avoid nasty surprises. Acting on the report early often leads to better deals or smarter decisions.
Worried about a recent report? Speak to a licensed builder or your conveyancer before proceeding.
FAQs: Building Inspection Reports
Q1: Are building inspection reports mandatory in Australia?
No, but they are highly recommended, especially in private sales. In some states, sellers may provide them, but buyers should still commission an independent report.
Q2: Can I back out of a contract based on a bad report?
Yes—if your offer was conditional on building inspection results. This is why including a building and pest clause in your contract is critical.
Q3: How much do building inspections cost?
It varies by location and property size, but expect to pay between $300–$700 for a standard residential report in Australia.
Q4: Who pays for the inspection report?
Usually the buyer, especially when organising their own inspector. Some vendors may offer recent reports, but you should verify them independently.
Q5: What’s the difference between a building report and a pest report?
A building report covers structural and maintenance issues, while a pest report focuses on termite and other infestations. They are often bundled together in a pre-purchase inspection.
Conclusion
A building inspection report is your most valuable tool when buying property—it protects your finances, health, and peace of mind.
From identifying hidden issues to giving you negotiation power, this document can be the difference between a wise investment and a money pit.
By making sure you always read and understand the building inspection report before proceeding with a purchase, you’re not just avoiding costly repairs—you’re making smarter, safer property decisions.
Thinking about a property purchase? Don’t skip the inspection. Your wallet (and future self) will thank you.