Buying a home is a major financial commitment. While open inspections can give you a general impression of a property, they rarely provide enough time or access to properly assess its condition.
If you’re buying a property by private sale in Victoria, you may be able to make your offer subject to the successful completion of a building inspection. This can provide an opportunity to have the property professionally assessed before progressing with the purchase under the agreed contract terms.
Consumer Affairs Victoria confirms that buyers and sellers in a private sale can negotiate conditions including the successful completion of a building or pest inspection. The specific wording of any condition matters, so your conveyancer or legal practitioner should review the contract before you sign it.
What Does “Subject to Building Inspection” Mean?
Making an offer subject to a building inspection generally means the property transaction includes an agreed condition relating to the completion and outcome of a professional building inspection.
Rather than relying solely on what you can see during an open home, an inspection provides a more detailed assessment of the property’s condition.
The exact wording of the condition, the timeframe for completing the inspection and what happens if problems are identified will depend on the contract.
For this reason, buyers should speak with their conveyancer or legal practitioner about the wording and implications of any building inspection condition before signing.
How Does a Subject to Building Inspection Offer Work?
The process will vary depending on the property and contract, but it will commonly involve:
- Making an offer on the property with a proposed building inspection condition.
- The seller accepting or negotiating the offer and its conditions.
- Arranging an independent building inspection within the timeframe specified in the contract.
- Having the property inspected and receiving the written report.
- Reviewing any defects or concerns identified.
- Discussing significant findings and your contractual options with your conveyancer or legal practitioner.
Because inspection conditions can involve relatively short timeframes, it’s important to organise your pre-purchase building inspection promptly once your offer has been accepted.
What Does a Pre-Purchase Building Inspection Look For?
A property can present extremely well during an open inspection while still having defects or maintenance concerns that aren’t immediately obvious.
A professional pre-purchase building inspection assesses accessible areas of the property and can help identify issues such as:
- structural defects and significant cracking
- signs of movement or settlement
- roof and roof-space concerns
- moisture intrusion and water damage
- drainage issues
- waterproofing concerns
- subfloor problems
- deterioration of building materials
- safety concerns
- significant maintenance requirements.
Consumer Affairs Victoria recommends considering a professional building inspection before signing a contract and notes that an inspection report can identify faults and may help buyers negotiate the price or contract terms. It also specifically recommends obtaining your own independent report rather than relying on one supplied by the seller or agent.
For Melbourne buyers, an independent Pre-Purchase Building Inspection can provide a clearer understanding of what you’re buying before making one of your largest financial commitments.
What Happens If the Building Inspection Finds Defects?
Finding defects doesdoesn’tessarily mean you should walk away from a property.
Many established Melbourne homes will have some level of wear, maintenance requirements or minor defects. The important question is usually the nature and significance of the problems identified.
For example, there can be a considerable difference between relatively minor maintenance and issues involving significant structural movement, extensive moisture damage or major roof defects.
Depending on the findings, your next steps might include:
- asking the inspector to explain the defect in more detail
- obtaining further specialist advice
- investigating potential repair requirements
- obtaining quotes where appropriate
- discussing the report with your conveyancer
- negotiating with the vendor where appropriate.
However, the discovery of a defect does not automatically mean you have the right to terminate the contract. Your options will depend on the wording of your contract and your individual circumstances, which should be discussed with your conveyancer or legal practitioner.
Subject to Building Inspection vs Cooling-Off Period
These two concepts are often confused, but they are different.
A subject-to-building-inspection condition is one negotiated between the buyer and seller and incorporated into the contract.
A cooling-off period is a separate statutory right available for certain Victorian property purchases.
Eligible buyers purchasing residential property by private sale in Victoria generally have a cooling-off period of three clear business days, although important exclusions apply.
If you’ve already signed a contract and are considering arranging an inspection during this timeframe, read our guide to Cooling-Off Period Building Inspections in Victoria.
Can You Make an Offer Subject to Building and Pest Inspection?
A private-sale contract can also be negotiated subject to the successful completion of a pest inspection. Consumer Affairs Victoria specifically identifies building and pest inspections as possible conditions in private-sale negotiations.
A building inspection and timber pest inspection assess different risks.
The building component focuses on the property’s accessible building elements and visible defects. At the same time, a timber pest inspection looks for evidence of timber pests such as termites, associated damage, and conditions conducive to timber pest activity within the scope of the inspection.
For buyers wanting broader due diligence, a Building and Pest Inspection can provide additional information before proceeding with a property purchase.
What About Buying at Auction?
Buying at auction is different.
When you purchase a property at auction in Victoria, you generally cannot make the contract conditional after becoming the successful bidder. Consumer Affairs Victoria therefore recommends determining whether you need a building or pest inspection and obtaining the report before the auction.
This makes arranging a Pre-Auction Building Inspection particularly important if you are seriously considering bidding.
Knowing about significant defects beforehand can help you make a more informed decision about the property and how much you are prepared to pay.
Why Use an Independent Building Inspector?
The purpose of a pre-purchase inspection is to give you, as the buyer, a clearer understanding of the property.
Using an independent inspector means the assessment is carried out without representing the vendor or selling agent.
Consumer Affairs Victoria advises buyers to be wary of inspection reports offered by agents or sellers and says obtaining your own report is the way to ensure the assessment is independent.
An experienced independent building inspector can identify visible defects, explain significant findings, and provide a written report that helps you understand the property’s condition before deciding how to proceed.
Arrange Your Pre-Purchase Building Inspection Early
Property transactions can move quickly, particularly when there are multiple interested buyers or a contract contains short inspection timeframes.
If you’you’residering making an offer subject to a building inspection, speak with your conveyancer about the appropriate contract conditions and organise the inspection as early as possible.
Elevate Inspections provides independent Pre-Purchase Building Inspections across Melbourne, helping property buyers identify defects and better understand a home’s condition before committing to a purchase.
Book a Pre-Purchase Building Inspection with Elevate Inspections.
Frequently Asked Questions
Can I make an offer subject to a building inspection in Victoria?
For a private sale, buyers and sellers can negotiate conditions including the successful completion of a building or pest inspection. The seller must agree to the condition and buyers should have the contract reviewed by their conveyancer or legal practitioner.
How long do I have to arrange the inspection?
This depends on the timeframe specified in your contract. Check the contract and arrange the inspection promptly if your purchase is subject to an inspection condition.
Can I withdraw if the building inspection finds defects?
Not automatically. Your rights depend on the wording of the contract, the nature of the findings, and individual circumstances. Seek advice from your conveyancer or legal practitioner.
Can an offer be subject to a building and pest inspection?
Yes. Building and pest inspections can be negotiated as conditions of a Victorian private sale.
Can I make an auction purchase subject to a building inspection?
Auction purchases generally cannot have conditions added after you become the successful bidder, so buyers should consider obtaining their inspection before auction day.
