Building and pest inspections before auction — NSW and Victoria

The short version

A building inspection looks at the physical condition of a house — structure, roof, damp, movement and obvious defects. A pest inspection looks for timber pests, mainly termites. In a private-treaty sale you can often make your offer subject to both and walk away, or renegotiate, if a report turns up something serious. At an auction you can't. The contract you bid on is unconditional, and there's no cooling-off period in either NSW or Victoria, so a winning bid locks you in regardless of what an inspection would have found. The consequence is simple: if you want that protection at auction, arrange the inspections before auction day and read the results before you decide how high to bid.

Why an auction takes the condition away

In a negotiated sale, "subject to a satisfactory building and pest inspection" is a special condition — a way out if the report is bad. An auction contract has none of these. Once the hammer falls you've bought the property in its current condition, defects and all. There's no cooling-off period to fall back on either, under the Conveyancing Act 1919 (NSW) or the Sale of Land Act 1962 (Vic), both of which exclude auction sales from cooling-off. An inspection done after the auction tells you what you already own, not what you're deciding to buy.

Booking the inspections before the day

You'll want a qualified building inspector and a pest inspector — often the same firm does both in one visit and gives you a combined report. You'll usually need the agent's help to arrange access, and inspectors book out near a popular auction, so start early. Ask for a written report, not just a verbal "it's fine". A pre-purchase inspection carried out to the relevant Australian Standard (the AS 4349 series) reports on the visible, accessible parts of the property — it can't see inside walls, so treat it as a considered opinion, not a guarantee.

The cost trade-off

Here's the uncomfortable part. You pay for each inspection up front, and pay again for every property you inspect and don't win — bid on three auctions and lose two, and that's three sets of reports for one purchase. There's no way around it at auction; it's the price of the protection a condition would otherwise give you. Most buyers inspect only the properties they're serious about. If the agent offers a report the vendor already commissioned, read it — but remember it was written for the seller.

Apartments and strata are different

For a strata apartment, a standard building-and-pest inspection matters less — you don't own the structure, the owners corporation does. What you want instead is a strata records inspection: the scheme's minutes, accounts, levies and repair history, which tell you far more about a lot than a building report would. For a house, townhouse or anything where you own the building and the land, the building and pest report is the one that counts.

What to do with what you find

A report that flags something serious doesn't have to end the matter. Before the auction you can raise it with the agent and try to negotiate — a repair, a lower expectation, or a pre-auction offer made subject to conditions the auction itself won't allow. Or you factor the cost of the problem into the top price you're prepared to bid to. Or you decide it isn't worth it and don't register. What you can't do is bid, win, and then use the report as a reason to pull out.

What to check before you sign

1. Book the building and pest inspections early — well before auction day, with access arranged through the agent.
2. Get written reports you can read, not a verbal all-clear, and read the limitations the report sets out.
3. Match the inspection to the property — building and pest for a house; a strata records inspection for an apartment.
4. Have your conveyancer or solicitor review the contract at the same time, because you can't add conditions after you win.
5. Set your top bid with any defects already priced in — there's no cooling-off and no subject-to-inspection safety net once the hammer falls.

Common questions

Can I make an auction contract subject to a building and pest inspection?

No. An auction sale is unconditional in both NSW and Victoria, so you can't attach a "subject to inspection" condition the way you can in a private-treaty offer. The inspection has to be done before you bid. If a conditional offer matters to you, making a pre-auction offer is the only route — and even then the vendor has to agree to it.

Do I need a building inspection for an apartment?

Usually not in the same form. You don't own the building's structure in a strata scheme, so a strata records inspection — the minutes, accounts and repair history — tells you more than a standard building report. For a house or townhouse where you own the building, the building and pest report is the important one.

What if I can't afford to inspect every property I bid on?

There's no perfect fix. Most buyers inspect only the properties they're genuinely likely to bid on, and accept that a lost auction means a report they can't reuse — still cheaper than discovering a major defect in a property they're already locked into.

Does a clear report mean there are no problems?

No. A pre-purchase inspection covers what's visible and accessible on the day; it can't see inside walls, under slabs or behind linings. A clear report lowers the risk, it doesn't remove it — treat it as an informed opinion about the parts that could be seen. Reviewing the auction contract and knowing there's no cheap way out matter just as much before you raise your hand.