A property inspection protects your deposit and helps you avoid costly surprises after settlement.
If you're using the First Home Guarantee to buy in the ACT with a smaller deposit, you're likely working within a tight budget. Every dollar counts, and the last thing you want is to commit to a property that needs thousands in repairs you didn't anticipate. The inspection is where you confirm that the home you're about to buy matches the condition you expect, and where you identify any issues that could affect your borrowing capacity or your ability to afford the repayments once you move in.
Why ACT Buyers Should Prioritise Building and Pest Inspections
Building and pest inspections are not legally required in the ACT, but they are the most effective way to identify structural faults, moisture problems, and termite activity before you exchange contracts. In suburbs like Gungahlin and Belconnen where new estates sit alongside older homes, the age and construction quality of properties can vary significantly. A building inspector will assess the roof, walls, foundations, plumbing, electrical systems, and drainage, while a pest inspector checks for termites, borers, and moisture damage that can weaken timber frames.
Consider a buyer who made an offer on a townhouse in Tuggeranong without arranging an inspection. After settlement, they discovered rising damp in the lower-level walls and a cracked stormwater pipe that required excavation and resealing. The repair bill came to over $8,000, money they didn't have factored into their first home buyer budget. If they had commissioned a pre-purchase inspection, the issue would have been flagged, and they could have negotiated a price reduction or walked away entirely.
What to Look for During a Physical Walkthrough
Before you spend money on a formal inspection, walk through the property yourself and take note of visible issues. Check for cracks in walls and ceilings, particularly around door frames and cornices. Look at the condition of windows and doors, whether they open and close properly, and whether seals are intact. In the bathroom and kitchen, run the taps and check water pressure, look under sinks for signs of leaks, and inspect tiles and grout for cracking or movement.
In the ACT's climate, insulation and heating are important. Ask about the type of heating installed and whether insulation has been upgraded. Older homes in suburbs like Curtin and Lyons may have minimal ceiling insulation and single-pane windows, which can lead to high energy bills in winter. Check the hot water system and ask how old it is. If it's coming to the end of its lifespan, replacement could cost several thousand dollars, and that's something to factor into your offer price or negotiate with the seller.
How Strata Reports Affect Buyers in Units and Townhouses
If you're buying a unit or townhouse in the ACT, request a copy of the strata report before making an offer. The report will show the financial health of the owners corporation, any planned or ongoing maintenance, and whether there are special levies on the horizon. A well-managed strata should have a healthy sinking fund and a clear maintenance plan. If the sinking fund is low and major works like roof replacement or external painting are overdue, you could face a large special levy within months of moving in.
In a scenario like this, a buyer purchasing an apartment in Braddon noticed that the strata report flagged urgent balcony repairs across the building. The owners corporation had not yet voted on the work, but the engineer's report estimated the cost at $120,000, to be split among 30 units. That's $4,000 per owner, payable within six months. The buyer used this information to negotiate a $5,000 reduction in the purchase price to cover their share of the levy. Without reviewing the strata report, they would have been hit with an unexpected bill shortly after settlement, putting pressure on their household budget and potentially affecting their ability to meet loan repayments.
Assessing the Property Against Your Loan Conditions
Your lender will arrange a valuation to confirm the property is worth what you're paying, but the valuation is not the same as a building inspection. The valuer is there to assess market value, not structural condition. If you're using a low deposit option like the First Home Guarantee, your lender may have additional requirements around the property's condition, age, or location. Some lenders won't approve loans for properties with certain defects, or they may require you to fix issues before settlement.
If the building inspection identifies significant problems such as structural movement, illegal building work, or asbestos, your lender may withdraw approval or ask for the issues to be rectified. That can delay settlement or cause the sale to fall through. It's worth discussing any inspection findings with your broker before proceeding, so you understand how they might affect your home loan application and whether you need to renegotiate terms with the seller or request an extension to settlement.
How to Use Inspection Reports When Negotiating
Once you have your building and pest reports, review them carefully with your broker or conveyancer. Not every issue flagged in the report is a deal-breaker, but some will affect the property's value or your cost of ownership. Major structural defects, active termite infestation, or non-compliant electrical work are all legitimate grounds to renegotiate the price or ask the seller to arrange repairs before settlement. Minor cosmetic issues like worn carpet or peeling paint are usually factored into the offer price from the start.
If the seller is unwilling to negotiate and the defects are significant, you may choose to walk away, particularly if you made your offer subject to a satisfactory building inspection. In the ACT, most contracts include a building and pest clause that allows you to withdraw if the inspection reveals major defects. Make sure this clause is included before you sign, and clarify with your conveyancer what counts as a major defect under the contract terms.
Understanding Cooling-Off Periods and Inspection Timing
The ACT has a five-business-day cooling-off period for most residential property purchases, during which you can withdraw from the contract by paying 0.25% of the purchase price as a penalty. If you plan to use the cooling-off period to arrange your inspections, make sure you book the inspector immediately after exchange. Inspectors can be booked out for several days, particularly in busy periods, and you don't want to run out of time.
Some buyers waive the cooling-off period to make their offer more attractive in a competitive situation, but this removes your safety net if the inspection reveals problems. If you're buying at auction or making an unconditional offer, arrange your building and pest inspections before you commit. It costs a few hundred dollars upfront, but it's far less than the cost of buying a property with hidden defects you can't afford to repair.
Call one of our team or book an appointment at a time that works for you. We'll help you understand how inspection results affect your borrowing position, and what your options are if issues come up before settlement.
Frequently Asked Questions
Do I need a building inspection if I'm buying a new home in the ACT?
Yes, even new homes can have defects or incomplete work. A pre-settlement inspection ensures everything is finished to the contract standard and helps you lodge any defect claims with the builder before you move in.
Can I use the cooling-off period to arrange inspections in the ACT?
You can, but the ACT cooling-off period is only five business days, so you need to book inspections immediately after exchange. If inspectors are busy, you may run out of time before the reports are delivered.
What happens if the building inspection finds major defects after I've made an offer?
If your contract includes a building and pest clause, you can renegotiate the price, ask the seller to fix the issues, or withdraw from the contract. If you've waived the cooling-off period or made an unconditional offer, your options are more limited.
Will my lender accept a property with issues flagged in the inspection report?
It depends on the severity of the defects. Lenders may withdraw approval or require repairs before settlement if the inspection reveals structural problems, illegal building work, or safety hazards that affect the property's value.
How much do building and pest inspections cost in the ACT?
Building and pest inspections typically cost between $400 and $700 depending on the size and age of the property. Combined reports are usually cheaper than booking separate inspectors.
