In part 4 of our Brisbane buyer’s agent case study with Peta, we go through the dramas of an unsatisfactory building and pest inspection and discuss why this phase of a purchase is just as important as all of the others! It’s certainly not over till it’s over!

If you haven’t read the earlier articles in this series you can check them out here:

Brisbane Buyer’s Agent Case Study – Part 1 – Introducing Peta
Brisbane Buyers Agent Case Study – Peta Part 2 – Analysing Brisbane locations
Brisbane Buyers Agent Case Study – Peta Part 3 – The ‘Dramatic’ Closing of a Deal

It’s quite natural to feel a sense of elation, excitement and relief all rolled into one when you finally get that message of congratulations on having an offer accepted on a property. What you may not realise is that many contracts do not proceed – they ‘fall over’ or they are ‘crashed’ as they say in the real estate world. There are many reasons why this is the case but I’d say that the majority of these are due to either a) finance or b) an unsatisfactory building and pest inspection.


I’ve attended a good number of building and pest inspections and have read a good number of building and pest reports and it would be fair to say that the documentation provided by building and pest inspectors can really scare the pants off a prospective buyer! These reports are very comprehensive and are designed not only to provide the buyer with a good understanding of the state of the property including any and all defects but they are also written in a manner that ‘covers’ the building and pest inspector from future litigation. They really do include a lot of information about defects and potential consequences that can sometimes leave the purchaser unsure of the real severity of the issues and whether it’s a good idea to proceed with the contract.

Wherever possible we attend the building and pest inspection on behalf of our clients so that we can see first hand any issues found by the inspector and also talk to the inspector about what these issues really mean for us as the purchaser.

In Peta’s case there were a few minor issues highlighted, issues that were not unusual for a house of this property of this age and construction. There were, however, two more serious issues found in the report that required some real investigation and consideration. The first issue was the state of the concrete stumps under the house, in that a number of the stumps displayed cracking. The second issue was the drainage around the house. Underneath the house was a little damp and the building inspector was concerned that the fall of the land and the drainage mechanisms in place around the property may be insufficient to move the water away from the footings. It can be tricky as a purchaser to know what this means, both in the short term and the long term – what are the potential consequences of these issues in the short term and the long term and what are the financial implications to rectify the issues?


Now many people can be ‘scared off’ by what they don’t understand, but in our experience, if you dig a little deeper and consult some experts you can sometimes find that the issues are not as big as you think or can be easily solved. In this case you can use the building and pest inspection report to negotatiate a discount on the purchase price. Conversely, consulting experts can also save you bunch of money if you do in fact find that the identified issues are serious and potentially costly and you can exit a contract before you purchase.

Getting consultants to inspect and provide reports or quotes in a pre-purchase situation can sometimes cost money so you need to be prepared for that. In the case of Peta’s property first we requested an extension to the building and pest date by 7 days to enable us to do further investigations, then we had a plumber come out to inspect the property and provide a report and quotation on what was required. The report cost $132.00 including GST and gave us the plumbers professional view of the severity of the problem and quotation on two different approaches to improving the situation. We also had concrete stumping experts come out to assess the stumps. They provided a verbal opinion on the severity and implications and a written quote on fixing the stumps. This was provided for free. One thing to be mindful of, if you are paying a consultant to review and provide assessment is to ensure that you are going to be receiving a formal report. Don’t just pay people to provide a basic quote.

Even with all of the consultants reports in the world there will come a point where YOU have to make the decision on whether to proceed with the sale. For Peta’s property we facilitated obtaining professional opinions on the issues, discussed pros and cons with Peta and discussed what our options where in terms of the contract of sale. Basically, our options in this case, as with all building and pest issues that come up in a report, were:
Proceed with the sale based on the current Contract of Sale
Ask for a reduction in price based on the issues found
Pull out of the contract

Based on the information we’d received in our reports and our discussions of the situation with Peta, she decided that she was happy to proceed with the contract, but only with reduced purchase price.

Previously we had agreed upon and signed a Contract of Sale based on a purchase price of $430k. We went back to the seller and requested a reduction in price of $25k. Some intense negotiations ensued, via the real estate agent, for quite a few hours and ultimately a new purchase price of $417,500 was agreed upon. Formalities were then handed over to the solicitors to note the new purchase price.

As you can see, the contract period can be a nervous time for the seller and the buyer and it’s easy to see why contracts can and do ‘fall over’. If you have a good property, however, it can worth doing the required due diligence and investigations.

Peta’s property has now settled and she’s the proud owner of her new investment property. You can listen to an interview that we did with Peta about her experiences here.