BuyerReport Guide
What Should I Negotiate After a Building Inspection?
Your building inspection has found defects and now you need to decide what is actually worth raising with the seller. The strongest approach is usually not to negotiate every item in the report, but to focus on significant defects, unexpected repair costs and findings that could materially affect the property or your decision to proceed.
Focus on the defects that matter financially or structurally. Major defects, significant moisture problems, termite damage, substantial roofing issues and other expensive unexpected repairs may justify further discussion. Minor maintenance and cosmetic defects are usually much weaker negotiating points.
Should I negotiate after a building inspection?
Potentially. One of the reasons buyers obtain a building inspection is to understand the condition of the property before they are fully committed to unexpected repair costs.
If the inspection identifies significant defects that were not apparent when you made your offer, the findings may give you useful information to discuss with the selling agent, seller and your conveyancer or solicitor.
But a building report should not automatically become a shopping list of everything you would like the seller to repair.
A stronger approach is to identify the findings that genuinely change the financial picture of the property.
Which defects are worth negotiating?
The most relevant defects are generally those that involve significant repair costs, structural implications, safety concerns or further deterioration if they are not addressed.
Major structural defects
Significant structural cracking, movement, footing problems, roof-frame defects and issues affecting structural building elements deserve particular attention.
Major water or moisture problems
Failed waterproofing, persistent water ingress and significant moisture problems can involve considerably more work than the visible damage suggests.
Termite damage
Active termites or significant timber damage may require treatment, further investigation and potentially substantial repairs.
Significant roof problems
Widespread roof deterioration, leaks, damaged structural components or major replacement work can represent a substantial unexpected expense.
Drainage or retaining problems
Significant site drainage problems or deteriorated retaining structures can become expensive depending on access, extent and the required repair method.
Unexpected high-cost repairs
A defect does not necessarily need to be structural to matter. A substantial unexpected repair bill can still materially change how you view the purchase.
Don't negotiate every defect in the report
Asking the seller to repair dozens of minor items can weaken the important points. A short list of significant, well-supported issues is generally much clearer than presenting every crack, paint defect, loose fitting and maintenance item identified during the inspection.
What defects are usually weaker negotiating points?
Every transaction is different, but normal wear, maintenance and cosmetic imperfections are generally less compelling than substantial unexpected defects.
Examples may include:
- minor paint deterioration;
- small cosmetic cracks;
- minor grout or sealant deterioration;
- general ageing of finishes;
- minor adjustment of doors or fittings;
- routine maintenance appropriate for the property's age; and
- items that were clearly visible when the property was inspected before making the offer.
This does not mean these items should be ignored. They can still be useful when budgeting for ownership. They simply may not carry the same weight as a significant structural or high-cost problem.
Should I ask the seller to repair the defect or reduce the price?
These are two very different approaches.
Option 1: Ask the seller to repair it
This may make sense where the required repair is relatively clear and can be properly completed before settlement.
However, buyers should consider who will carry out the work, what standard of repair is expected and whether there will be enough opportunity to confirm that the work has been completed appropriately.
Option 2: Negotiate a price adjustment
Some buyers prefer to negotiate the financial impact and arrange repairs themselves after settlement. This gives the buyer more control over the contractor, repair method and quality of the work.
The difficulty is establishing a realistic repair amount rather than simply guessing.
Know the likely repair cost before negotiating
Saying “the roof needs work” is very different from understanding whether the likely repair exposure is relatively minor or potentially tens of thousands of dollars. Repair-cost information can make the discussion much more focused and help you decide whether the issue is actually material to the purchase.
How much should I ask off the purchase price?
There is no universal formula.
The amount should not simply be based on the highest possible repair estimate or an arbitrary percentage of the purchase price.
Consider:
- the realistic likely repair cost;
- whether the full extent of the defect is known;
- whether specialist investigation is still required;
- the age and overall condition of the property;
- whether the defect was already obvious before the offer;
- whether several significant defects exist together; and
- your contractual position.
For substantial or uncertain work, contractor quotations may be appropriate before relying on a repair-cost estimate.
See our guide: How Much Will the Defects in My Building Inspection Cost to Repair?
Does the seller have to negotiate?
Not necessarily.
A buyer may ask for a repair, price adjustment or another solution, but that does not automatically mean the seller is required to agree.
Separately, your contract may give you specific rights when particular types of defects are identified under a building inspection condition.
That is why it is important to distinguish between negotiating commercially and exercising a contractual right.
Read: Who Pays for Defects Found in a Building Inspection?
What if the report identifies a major structural defect?
A major structural defect deserves separate consideration because it may have greater repair implications and, depending on the contract and jurisdiction, may also be relevant to specific building-inspection conditions.
Do not assume that the words “major defect” and “major structural defect” automatically mean the same thing.
If your report specifically identifies a major structural defect, read: My Building Inspection Found a Major Structural Defect — What Does This Mean?
What if the seller says the defect isn't serious?
Disagreement about inspection findings can happen.
The selling agent or seller may have a different view of the severity, cause or repair cost. In that situation, the report itself becomes important.
Look at whether the inspector clearly documented:
- the location and extent of the defect;
- photographic evidence;
- the classification of the finding;
- the likely cause where identifiable;
- recommended repairs or further investigation; and
- whether specialist advice was recommended.
For significant disputes or uncertain defects, further specialist assessment may be more useful than arguing over assumptions.
Can I negotiate for several defects together?
Yes, and this can sometimes provide a clearer picture than discussing each defect separately.
For example, a property may have no single catastrophic issue but several significant repairs that together create a substantial financial burden.
The combined repair exposure may therefore be more relevant to you than the classification of any individual defect.
This is another reason to understand the report as a whole rather than focusing only on individual photographs or defect labels.
What should I do before negotiating?
Identify the significant defects
Separate major, structural and potentially expensive findings from routine maintenance and cosmetic items.
Understand what they mean
Make sure you understand the likely cause, extent and consequences of the important findings before deciding what to raise.
Establish realistic repair costs
Use sensible cost ranges and obtain specialist quotations where the potential expense is significant or uncertain.
Check your contractual position
Speak with your conveyancer, settlement agent or solicitor about your contract, relevant conditions and any deadlines before taking action.
Keep the negotiation focused
Present the significant findings clearly and avoid burying the important issues underneath a long list of minor maintenance items.
Can my building report be turned into a negotiation summary?
Yes. Once the significant findings and likely repair implications have been identified, they can be presented in a much clearer form for discussion with the selling agent or your property adviser.
BuyerReport reviews the building inspection report you already have, identifies the findings that deserve attention and can provide a separate negotiation letter based on the relevant issues identified in the report.
This can help turn a lengthy technical inspection report into a more focused summary of the issues that may actually matter to the purchase.
Frequently asked questions
Can I renegotiate after a building inspection?
You may be able to seek further negotiation after receiving an inspection report, but whether the seller agrees and what contractual rights you have depend on the individual transaction and contract.
Should I ask the seller to fix every defect?
Usually this is not the most useful approach. Concentrating on significant defects and substantial unexpected repair costs generally keeps the discussion focused on the issues that matter most.
Can I ask for money off instead of repairs?
You can potentially propose a price adjustment rather than asking the seller to complete repairs. Whether that is accepted depends on the negotiation and your contractual circumstances.
How do I know how much to negotiate?
Start with realistic likely repair costs rather than an arbitrary figure. Significant or uncertain repairs may require quotations or specialist investigation before the likely financial exposure can be established.
Does a major defect automatically let me reduce the price?
No. The defect classification itself does not automatically determine a price reduction. Your options depend on the contract, the nature of the finding and whether the seller agrees to a negotiated outcome.
Can BuyerReport help with a negotiation letter?
Yes. BuyerReport can review the existing inspection report, identify significant findings and provide a separate negotiation letter based on the relevant defects and repair implications identified in the report.
Need More Information?
Not sure which defects are worth raising?
If you're unsure which findings in your building report deserve attention before you proceed, contact BuyerReport and tell us what you're concerned about.
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