An inspection that finds $15,000 of defects is $15,000 of leverage
When your report comes back with a list of problems, you have not hit a dead end — you have just been handed a negotiating position. NSW Fair Trading identifies price negotiation as one of the three key reasons to get a building inspection before you buy , and Consumer Affairs Victoria advises that a building report can be used to negotiate conditions in the contract and possibly the price . Yet many buyers treat the report as pass or fail. They either panic at a long list of findings and walk from a property they want, or they ignore the findings because they are afraid of losing the deal. Both responses waste the report.
- Price negotiation is one of three regulator-endorsed reasons to inspect .
- Consumer Affairs Victoria confirms reports can be used to negotiate both conditions and price .
- REIQ requires buyers to "act reasonably" when exercising inspection rights .
The right choice depends on the severity of the defects, the cost to fix them, the state of the market, and whether you still want the property.
Turn defects into dollars before you open your mouth
A report that says "significant cracking to external walls" is concerning. A quote from a structural engineer that says "crack repair and restumping: $22,000" is a negotiation tool. Putting a dollar figure on every defect you intend to raise is the most important step in any inspection negotiation.
Get written quotes from licensed tradespeople for the specific repairs flagged in your report. Your inspector can often recommend which trades to contact. These quotes give you a credible, documented basis for your request and show the seller you have done your homework. Your conveyancer or solicitor handles the formal communication — you do not negotiate directly with the seller. You identify the defects that concern you, get repair quotes, and instruct your conveyancer on what you want. Your conveyancer then writes to the seller's solicitor or agent, attaching the relevant sections of the inspection report and the repair quotes. A request backed by an inspection report and trade quotes is taken seriously. A vague complaint about "problems with the house" is not.
Match the negotiation tool to the defect
Price reduction and solve different problems. A price reduction means you accept the property as-is and handle repairs yourself after settlement. You choose the tradespeople, set the timeline, and manage quality. If the price is formally reduced via a , you also pay stamp duty on the lower price . The downside is you carry the risk of repairs costing more than the quotes suggested. Vendor rectification means the seller arranges and pays for repairs before you settle. The problem is fixed before you take ownership, but you have no control over who does the work. A seller motivated to spend as little as possible may not use the tradesperson you would have chosen .
For major structural work (restumping, roof replacement, significant drainage), a price reduction is usually safer — you want to control who does that work. For straightforward repairs with a clear scope (replacing guttering, treating a localised termite issue), vendor rectification can work well. Get the scope of work agreed in writing before the contract goes unconditional.
Not every defect is grounds for renegotiation. The REIQ advises that buyers must "act reasonably" when exercising rights under a building and pest condition . Major structural defects, active termite infestation, failed waterproofing, non-compliant electrical or plumbing work, and undisclosed defects that materially affect value are all reasonable grounds. Normal wear on an older property, cosmetic issues visible when you agreed on the price, and minor maintenance items are not .
Some defects should make you reconsider regardless of price: active termite infestation affecting structural timber, major foundation failure, extensive non-compliant building work, asbestos in poor condition, or multiple major systems failing simultaneously . If your inspector recommends further specialist investigation, take that advice seriously before committing.
The clock is the enemy, not the seller
Every has a deadline. In most contracts, you must notify the seller by 5pm on the due date whether you are satisfied with the inspection results . If you miss that deadline, the consequences vary by state — but none are good for you.
Renegotiation takes time. Preston Law recommends commencing negotiations "well and truly before the condition due date" and requesting an extension if needed . Your conveyancer drafts the formal request, manages the back-and-forth, and ensures any agreed changes are documented before you waive the inspection condition. If the seller agrees to a price reduction, your conveyancer prepares the deed of variation. If the seller agrees to rectification, they ensure the scope of work is recorded in the contract.
Do not negotiate directly with the real estate agent about contract terms. The agent works for the seller. Your conveyancer works for you.