I’ve seen dozens of property deals collapse after building inspections. Sometimes justified - the property genuinely had serious issues. Sometimes not - buyers panicked over minor cosmetic problems that any home over ten years old would have.

The key is knowing which issues matter and which don’t. A building inspection report will list everything the inspector found, but not all defects are created equal. Here’s how to actually read that report and make informed decisions.

The Actual Deal-Breakers

Major structural issues:

Significant foundation movement, cracked load-bearing walls, sagging rooflines. These are expensive to fix (often $50k+) and indicate the building has serious problems.

Minor cracking in brick walls is normal - bricks expand and contract with temperature. Cracks wider than 5mm, particularly if they’re diagonal or stepped, suggest movement. That needs investigation by a structural engineer.

Sagging rooflines visible from street level mean the roof framing has failed. This is a complete re-roof situation, easily $40k-80k depending on house size.

If the report flags these, get a specialist structural engineer’s assessment before proceeding. The building inspector can identify the problem but can’t quantify the repair cost accurately.

Water damage and leaks:

Active water penetration into the building is serious. It means ongoing damage to framing, rot in timber, potential mould issues, and expensive remediation.

Staining on ceilings from old leaks that have been fixed isn’t a deal-breaker. But if the inspector finds soft timber, active dampness, or moisture meter readings showing current water penetration, that’s a problem.

Particularly watch for:

• Leaks around windows and doors (indicates failed seals or poor installation)
• Rising damp in walls (blocked or failed damp-proof course)
• Roof leaks (missing tiles, failed flashing)
• Bathroom waterproofing failures (common in apartments and renovations)

Water damage compounds over time. A small leak now becomes rotted framing and mould in 12 months. These need fixing immediately.

Serious pest issues:

Active termite infestation is the nightmare scenario. Termites can destroy structural timber in months if left untreated. Treatment is expensive ($3k-6k) and doesn’t fix the damage they’ve already done.

If the report shows active termites in structural timber (floor joists, wall studs, roof framing), get a specialist timber pest inspection to assess the extent of damage. You’re potentially looking at replacing structural members, which is major work.

Evidence of old termite damage that’s been treated isn’t necessarily a problem, as long as the damage was repaired properly and there’s current termite protection in place.

Borers in floorboards or furniture are annoying but rarely structural. Termites in structural timber are a genuine issue.

The “It Depends” Category

Electrical issues:

Old wiring (ceramic fuse boxes, cloth-wrapped cables, no earth wiring) needs upgrading. But it’s a known cost - usually $3k-8k for a full rewire in a standard house.

If you’re buying an older home, you should budget for this anyway. It’s not a surprise, and it’s fixable.

What matters more is evidence of DIY electrical work or dangerous installations. Uncertified work means you don’t know what else might be wrong, and it creates insurance and liability issues.

Plumbing:

Old galvanised pipes will eventually need replacing. But “eventually” might be 5-10 years. It’s not urgent.

Active leaks, corroded hot water systems, or blocked sewers need immediate attention. Get quotes for repair before settling on price.

Asbestos:

If the house was built before 1990, it probably has asbestos somewhere. Eaves, internal wall sheeting, bathroom backing boards, old vinyl tiles - it’s everywhere in older homes.

Asbestos that’s in good condition and not disturbed isn’t dangerous. You leave it alone and don’t renovate those areas without proper asbestos removal.

Damaged asbestos (broken sheeting, crumbling material) needs professional removal. That’s expensive - easily $5k-15k depending on extent.

If you’re planning renovations, factor in asbestos removal costs for the areas you’re touching. If you’re not renovating, undisturbed asbestos isn’t a deal-breaker.

The Minor Stuff That Doesn’t Matter

Cosmetic cracking in plaster:

Happens in every house. Not structural. Paint and patch it.

Gutters needing cleaning:

Yeah, they probably do. That’s maintenance, not a defect.

Minor drainage issues (water pooling in yard):

Unless it’s causing water to enter the building, this is cosmetic. Regrade the drainage or install better downpipes.

Older fixtures and fittings:

The report will note that the kitchen’s 20 years old or the bathroom tiles are dated. That’s not a defect, that’s just describing the property.

Lack of ventilation in roof space:

Common in older homes. You can add whirlybirds or vents for a few hundred dollars.

Minor rust on roof sheeting:

If it’s surface rust on Colorbond, it’s not a structural issue. You treat it and monitor it.

How to Use the Report in Negotiations

First, don’t panic when you see a 30-page report listing dozens of issues. Every property has issues. The inspector’s job is to document everything, major and minor.

Read the report carefully and separate:

• Major issues (structural, water penetration, termites)
• Medium issues (old electrical, plumbing that needs work)
• Minor issues (cosmetic, maintenance)

Get quotes for the major and medium issues. Then decide if you want to:

1. Proceed at the agreed price (if issues are minor or you expected them)

2. Renegotiate the price (reduce it by the cost of major repairs)

3. Ask the vendor to fix issues (works for clear problems like active leaks)

4. Walk away (if issues are too extensive or expensive)

I’ve seen vendors get offended when buyers ask for $50k off because the inspection found $10k of minor issues. That’s overreach and kills goodwill.

But asking for $15k off when there’s $15k of genuine repair work needed is reasonable. Come armed with quotes from licensed tradespeople, not just the building inspector’s estimates.

Special Considerations for Apartments

Building inspections for apartments are limited - the inspector can only access your unit and common areas, not the building’s structure or other units.

Pay attention to:

• Water staining from units above (indicates ongoing leaks)
• Cracks in concrete (more concerning than in brick houses)
• Strata reports showing building-wide defect issues

For newer apartments (built 2015-2022), serious defect issues are worryingly common. Waterproofing failures, cracking in facades, combustible cladding. These are building-wide problems that require strata action to fix.

Check the strata records for:

• Active defect claims against the builder
• Special levies for building repairs
• Engineering reports flagging issues

A cheap apartment with major building defects and no strata funds to fix them is a trap. You’ll be hit with special levies and potentially not be able to sell until issues are resolved.

When to Walk Away

If the building inspection reveals:

• Active termites in structural timber with extensive damage
• Major structural movement requiring engineering intervention
• Widespread water damage with rot and mould
• Safety issues (unstable balconies, collapsing ceilings)
• Building-wide defects in apartments with no repair plan

These aren’t fixable with a price reduction. They’re fundamental problems that make the property unsuitable or financially risky.

I walked away from a sale once where the inspection found the entire subfloor was rotted due to long-term water penetration. The vendor wanted to drop the price by $30k. The actual repair was quoted at $80k minimum, and even then there was uncertainty about what they’d find once they started work.

Sometimes the smart move is to walk away and find a better property.

The Bottom Line

A building inspection is information, not a list of reasons to panic. Every property over five years old will have issues. What matters is the severity and cost.

Budget for a building inspection ($400-600) and a pest inspection ($200-300) on any property you’re serious about. It’s the best money you’ll spend in the buying process.

Read the report carefully, get quotes for the major issues, and make an informed decision. Don’t let agents or vendors pressure you to proceed if the report reveals serious problems. But also don’t walk away from a good property because of minor, fixable issues.

The goal isn’t to find a perfect property - it’s to find a property where you understand the issues and can manage them.