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Due DiligenceIntermediate

What to Look for in a Building Inspection Report

How to read a building inspection report, spot red flags that kill deals, and use defect findings as negotiation leverage.

9 min read2 February 2026
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In this article
  1. What Does a Building Inspection Cover?
  2. Understanding the Severity Ratings
  3. Red Flags That Should Kill a Deal
  4. How to Read the Report Effectively
  5. Using Inspection Findings as Negotiation Leverage
  6. Virtual Buyers Agent's Approach to Checks
  7. Final Checklist: Before You Commit

Major Defect Impact

Major defects can cost $10,000 to $100,000+ to remediate. They warrant either a significant price reduction, rectification by the vendor before settlement, or walking away from the deal entirely.

Underpinning Costs

Underpinning a house can cost $30,000-$80,000 or more. Fresh cracking, doors and windows that no longer close properly, or visible differential settlement are signs of active structural movement.

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  • You have read the full building inspection report, not just the summary
  • All major defects have been costed for rectification
  • Specialist follow-up inspections have been completed where recommended
  • You have discussed concerning findings directly with the inspector
  • The inspection results have been factored into your offer price
  • You understand which defects are cosmetic and which are structural
  • You have a realistic budget for post-purchase repairs and maintenance

In this article

  1. What Does a Building Inspection Cover?
  2. Understanding the Severity Ratings
  3. Red Flags That Should Kill a Deal
  4. How to Read the Report Effectively
  5. Using Inspection Findings as Negotiation Leverage
  6. Virtual Buyers Agent's Approach to Checks
  7. Final Checklist: Before You Commit

Written by

George
George

Founder, Virtual Buyers Agent

Data Engineer who built Virtual Buyers Agent after using a systematic framework to earn 8.2% rental yield on his first investment property.

Run this in Virtual Buyers Agent

  • -Building report summary
  • -Strata report summary
  • -Documents checklist

Written by

George
George

Founder, Virtual Buyers Agent

Data Engineer who built Virtual Buyers Agent after using a systematic framework to earn 8.2% rental yield on his first investment property.

ShareinLinkedIn𝕏Post

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