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You should arrange a building and pest inspection after making an offer, provided your offer is conditional on satisfactory results. This protects you legally if defects are found, allowing you to renegotiate or withdraw. For auction sales, inspections must be completed before auction since sales are unconditional.
Buying a home is one of the biggest financial decisions you’ll ever make. An independent building and pest inspection is your best defence against buying a property with hidden, costly problems. But when is the right moment to book it in? Let’s look at the options.
Option 1: Inspection Before the Offer
Some buyers choose to get an inspection done before they even put an offer on the table.
The Perceived Advantage:
You go into negotiations with your eyes wide open. You know about any potential defects, from a leaky roof to termite damage, and can factor the cost of repairs into your initial offer. There are no surprises waiting for you down the line.
The Reality and the Risks:
- Financial Risk: A building and pest inspection can cost several hundred dollars. If your offer isn’t accepted—or if you’re outbid by another buyer—you’ve lost that money with nothing to show for it.
- Wasted Leverage: You give up your strongest negotiating tool. If you find issues before making an offer, the seller has no obligation to you. By contrast, finding issues after your offer is accepted gives you powerful leverage to renegotiate.
- Auctions: For properties sold at auction, the only time to conduct the Building and Pest inspection is prior to auction as properties sold at auction are sold unconditionally – that is, there are no conditions for which the sale of the property is subject to. If major defects were identified in a Building and Pest report completed after purchasing the property at an auction, you would be unable to renegotiate the price or withdraw from the contract without losing your deposit.
Option 2: Inspection After the Offer (The Recommended Approach)
For properties NOT being sold by auction, the safest and most common practice is to make your offer first, with one very important condition.
The Golden Clause: “Subject to…”
As your conveyancer, we will always advise you to make your offer “subject to a building and pest inspection.”
The Power of a Conditional Offer:
Once the seller accepts your conditional offer, you arrange the inspection. When you receive the report, you have three clear paths forward:
1. The All-Clear: The report comes back clean, or with only minor, manageable issues. You are satisfied, the condition is met, and the sale proceeds to unconditional.
2. Negotiation: The report uncovers significant problems. You now have the power to go back to the seller and:
- Negotiate a lower purchase price to cover the cost of repairs.
- Request that the seller fixes the issues before the settlement date.
3. Walk Away: The inspection reveals major, deal-breaking defects that you’re not willing to take on. Because your offer was conditional, you can legally withdraw from the sale and, in most cases, have your full deposit refunded. You’ve only spent the cost of the inspection, which is a small price to pay to avoid a financial catastrophe.
At Red Door Conveyancing, our advice is unequivocal: when possible, make your offer conditional upon a satisfactory building and pest inspection. This method provides the perfect balance of security and leverage. It prevents you from wasting money on inspections for properties you may not buy, while giving you a legal “get out” clause if the property turns out to be a dud. Before you sign any contract, let our team review it. We’ll ensure the right protective clauses are in place so you can buy your new home with complete confidence.
If you have more questions about conveyancing transactions, don’t hesitate to contact us on 03 8456 6797 or send us a contact form so we can better assist you.
