Can You Negotiate Price After a Building Inspection?

Yes, you can negotiate the purchase price after a building inspection, and many Australian buyers do exactly that. A building inspection report gives you documented evidence of defects that the vendor may not have disclosed or even known about. That evidence puts you in a strong position to request a fair price reduction or ask the vendor to fix problems before settlement.

This is one of the most valuable outcomes of a pre-purchase inspection. The inspection itself costs a few hundred dollars, but the negotiation it enables can save you thousands or even tens of thousands. The key is knowing which defects carry weight, how to present your case, and what outcomes are realistic.

How the Inspection Report Supports Negotiation

A professional building inspection report is not just a list of problems. It is a detailed, evidence-based document that classifies defects by severity, includes photographs, and often provides guidance on the type of repairs required. This structure makes it a powerful negotiating tool for several reasons.

It is objective. The report comes from an independent, licensed inspector with no financial interest in the sale. This carries more weight with vendors and agents than a buyer simply pointing out issues.

It is specific. Rather than vague claims like "the roof looks old," the report identifies specific defects such as "cracked and displaced ridge capping on the western elevation, requiring repointing and partial replacement." Specificity makes it harder for the vendor to dismiss your concerns.

It quantifies risk. Major defects flagged in the report signal genuine financial exposure. When a vendor can see that a structural crack or a failing retaining wall will cost $15,000 to repair, they understand why a price adjustment is reasonable.

It creates a record. Once a defect is documented in a professional report, the vendor becomes aware of it. If they refuse to negotiate and then sell to another buyer without disclosing the issue, they may face legal consequences. This awareness often motivates vendors to negotiate in good faith.

What Defects Justify a Price Reduction

Not every defect warrants a price reduction. The strongest negotiation cases involve defects that are significant, costly to repair, or that affect the safety and structural integrity of the property. These include:

• Structural cracking. Cracks wider than 5mm, stepped cracks in brickwork, or diagonal cracks near doors and windows that indicate foundation movement or structural failure
• Roof defects. Broken or missing tiles, failed flashings, significant rust on metal roofing, or sagging roof framing that will require repair or replacement
• Active termite damage or infestation. Current termite activity or significant damage to structural timbers that requires treatment and repair
• Rising damp or failed waterproofing. Water ingress through foundations, failed shower waterproofing, or leaking balconies that cause ongoing damage
• Electrical safety issues. Absence of safety switches, non-compliant wiring, damaged switchboards, or other hazards that require an electrician to rectify
• Plumbing failures. Leaking pipes, failed hot water systems, blocked drains, or deteriorated sewer lines
• Asbestos-containing materials. Damaged or deteriorating asbestos products that require removal by a licensed professional
• Non-compliant building work. Unapproved renovations, illegal structures, or work that does not meet the National Construction Code

What Defects Usually Do Not Justify Negotiation

Minor and cosmetic defects are generally not strong grounds for negotiation. These include:

• Minor hairline cracks in plasterboard (under 2mm, stable)
• Worn carpet or dated interior paint
• Small chips or scratches on surfaces
• Minor grout deterioration in tiled areas
• Sticky doors or windows that can be adjusted easily
• General wear and tear consistent with the age and price of the property

Vendors and agents will quickly dismiss a negotiation attempt based on minor issues. It undermines your credibility and can make them less receptive to legitimate concerns. Focus your negotiation on the defects that genuinely matter.

Example Negotiation Scenarios

Here are three realistic scenarios that show how inspection findings translate into negotiation outcomes.

Scenario 1: Roof replacement needed. The inspection report identifies extensive rust, failed fasteners, and deteriorated flashings on a metal roof, with the inspector recommending full roof replacement within the next two years. Two roofing quotes confirm a replacement cost of $18,000 to $22,000. The buyer requests a $20,000 price reduction. The vendor agrees to a $15,000 reduction, and the buyer accepts, planning to replace the roof after settlement.

Scenario 2: Active termite damage. The pest inspector finds active termites in the subfloor and estimates that approximately 30% of the floor joists show significant damage. Treatment costs are quoted at $3,500, and timber replacement and repair is estimated at $12,000 to $15,000. The buyer requests a $15,000 reduction. After negotiation, the vendor agrees to a $12,000 reduction plus arranging termite treatment before settlement.

Scenario 3: Failed bathroom waterproofing. The inspector detects elevated moisture readings in the bathroom floor and walls, indicating failed waterproofing. Repair requires stripping the bathroom back to the substrate, re-waterproofing, and retiling, at an estimated cost of $8,000 to $12,000. The buyer negotiates a $10,000 price reduction.

In each of these scenarios, the inspection report provided the evidence needed to justify the request, and the repair cost estimates gave both parties a basis for reaching a fair outcome.

How to Approach the Negotiation

The way you present your case matters as much as the evidence itself. Here is a practical approach that tends to produce the best results.

Step 1: Review the report carefully. Read the entire report and identify the defects that are significant enough to justify a price adjustment. Separate major issues from minor ones.

Step 2: Get repair quotes. For significant defects, obtain written quotes from licensed tradespeople. This gives you concrete cost figures to support your negotiation rather than guesswork.

Step 3: Calculate your request. Add up the estimated repair costs for all significant defects. This total forms the basis of your price reduction request. In some cases, you may not ask for the full amount, as negotiation involves give and take.

Step 4: Present through your conveyancer or solicitor. In most property transactions, negotiation happens through your legal representative or buyer's agent. They present the inspection findings and repair quotes to the vendor's agent or solicitor in a professional, factual manner.

Step 5: Be prepared to compromise. The vendor may counter-offer with a smaller reduction. Consider whether the revised price is still fair given the defects. If the vendor refuses to negotiate at all, you need to decide whether to proceed at the original price or walk away.

Your Options After a Building Inspection

After receiving your inspection report, you generally have four options:

1. Proceed at the agreed price. If the inspection reveals only minor defects consistent with the property's age and asking price, you may be comfortable going ahead without negotiation.

2. Negotiate a price reduction. Request a lower price that reflects the cost of addressing significant defects. This is the most common outcome when meaningful defects are found.

3. Request the vendor make repairs. Instead of a price reduction, you can ask the vendor to fix specific defects before settlement. This works best for clearly defined issues with straightforward repairs. Be aware that vendor-arranged repairs may not meet the standard you would choose.

4. Withdraw from the contract. If the inspection reveals serious problems that make the property unsuitable or too risky, you can exercise your cooling-off rights or invoke a "subject to inspection" clause to walk away. Depending on your contract terms, you may lose a small portion of your deposit.

Tips for Successful Negotiation

• Be reasonable. Asking for a reduction that reflects actual repair costs is fair. Asking for a large discount based on minor issues will not be taken seriously.
• Do not wait. Cooling-off periods and contract conditions have deadlines. Start your negotiation promptly after receiving the report.
• Focus on facts. Present the inspector's findings and repair quotes rather than opinions or emotional arguments.
• Prioritise safety and structural issues. These carry the most weight with vendors, agents, and solicitors because they represent genuine risk and liability.
• Keep the relationship professional. You may still need to work with the vendor through settlement. A respectful negotiation keeps the process smooth.
• Know your walk-away point. Before negotiating, decide what price reduction would make the purchase worthwhile for you given the defects found. If the vendor will not meet your minimum, be prepared to walk away.
• Consider the market. In a buyer's market, vendors are more likely to negotiate. In a hot seller's market with competing offers, your leverage is reduced, but documented defects still carry weight.

A pre-purchase inspection is not just about finding problems. It is about giving you the information and evidence you need to buy a property at a fair price that accounts for its true condition.

For a complete overview, see our guide to pre-purchase building and pest inspections.