Withdrawing Offer After Building Inspection: Reasons Why and What to Do

Can you withdraw an offer on a property after a building inspection? Yes, but only in certain circumstances. To get the full benefit and protection offered by a property inspection, you first need to understand:

• What is a ‘subject to inspection’ clause?
• How do pre-purchase inspections work?
• What reasons are there for withdrawing an offer after an inspection?
• What is the correct process for withdrawing an offer?

What Is a ‘Subject to Inspection’ Clause?

For a prospective buyer to benefit from a pre-purchase inspection they’ll first need to ensure that their contract contains a ‘subject to building inspection’ clause. This is a common, but not compulsory, clause, so you’ll need to specifically request it be included before signing the contract.

Including a ‘subject to inspection’ clause gives you a legal means to withdraw from the sale if a pre-purchase inspection reveals any major defects in the property.

How Does a Pre-Purchase Building Inspection Work?

A pre-purchase home inspection is when a prospective buyer hires a qualified inspector to thoroughly examine a property for significant issues, safety hazards and defects. The inspector will check the property’s current condition, including its structural integrity, and electrical and plumbing systems.

Their findings will be documented in a comprehensive report, which can help a buyer to make an informed decision about the property purchase. If the inspection uncovers any valid concerns, the buyer may choose to renegotiate or even withdraw from the contract.

What Reasons Are There for Withdrawing an Offer After a Property Inspection?

When might you consider withdrawing an offer after a building inspection? The most common reasons include:

What’s the Process for Withdrawing an Offer After a Property Inspection?

So, you’ve organised your pre-purchase property inspection and the report shows some valid concerns. What’s the process if you’re going to withdraw from the contract?

1. Review Contract Terms: Start by carefully reviewing the contract terms. Standard wording for a ‘subject to inspection’ clause states in part that “the Buyer may terminate this contract by notice to the Seller at any time before 5 pm on the Inspection Date…” This means you’ll need to take immediate action once you receive the report.
2. Consider Negotiating: In some cases, you may be able to renegotiate the terms of the contract. This could include lowering the sale price or requesting that repairs be carried out before settlement.
3. Formally Withdraw: If you’re going to withdraw from the contract, you’ll need to complete the necessary paperwork normally via your own conveyancer and supply this to the Seller or the Seller’s Agent by the time and date specified. Make sure this notice complies with all the obligations listed in your contract of sale.
4. Notify Your Lender: You must notify your lender as soon as possible after withdrawing from a contract of sale. If you have a broker, they can ensure this is done with minimal complications for future applications.

Renegotiation vs Withdrawal After Building Inspection

A building inspection doesn’t always mean you have to abandon your purchase. Often, the results can give you leverage to adjust the contract to your advantage.

You may be able to:

• Negotiate a lower purchase price to offset the cost of fixing major defects.
• Request the seller to complete repairs before settlement so the property is move-in ready.
• Seek credits or concessions at settlement and manage repairs yourself.
• Withdraw from the contract if the issues are too serious or the seller refuses to negotiate.

Ultimately, the best option will depend on the scale of the issues, your budget and the seller’s willingness to compromise. Professional advice can help you decide whether renegotiation or withdrawal is the smarter move.

Acting Reasonably Under the Contract

Contracts generally require buyers to act “reasonably” when relying on building and pest inspections. This protects both parties and prevents withdrawals over trivial matters.

Acting reasonably might mean:

• Accepting minor or cosmetic issues such as chipped paint or loose fittings as normal wear and tear.
• Relying on legitimate grounds for withdrawal, such as structural faults, termite infestations or safety hazards.
• Communicating clearly and in writing with the seller if you wish to terminate.
• Providing the inspection report to justify your decision.

By following these principles, you reduce the chance of disputes and ensure your termination or renegotiation is on solid legal ground.

Vendor Disclosure Requirements

In Queensland, vendor disclosure laws are more limited than in some other states, which makes it especially important for buyers in Brisbane and surrounding areas to do their own due diligence. 

Sellers in Queensland are generally required to disclose:

• Registered encumbrances that may affect the property’s use or value.
• Easements that grant others access or rights over part of the land.
• Statutory notices issued by local councils or government bodies.
• For units, townhouses or apartments: details of the body corporate, including levies and any by-laws that apply.

However, sellers in Queensland don’t have to disclose every detail about the condition of the property. Issues such as hidden water damage, structural faults or pest infestations often won’t appear in the disclosure documents. That’s why building & pest inspections are such a critical step for Brisbane buyers – they uncover problems that could otherwise go unnoticed until after settlement.

Relying solely on a seller’s paperwork in Queensland leaves buyers exposed to risk. By combining disclosure checks with thorough inspections, you’ll be in a far stronger position to make informed decisions and protect your investment.

Common Pitfalls When Withdrawing After a Building Inspection

Withdrawing after a building inspection can be straightforward if you follow the rules – but many buyers slip up and risk their deposit or legal rights.

Common pitfalls include:

• Missing the deadline to notify the seller of your decision.
• Failing to give written notice, relying only on verbal discussions.
• Using minor defects as grounds for withdrawal, which may not be seen as reasonable.
• Assuming auction contracts carry inspection clauses, when they usually don’t.
• Not seeking timely legal advice, leaving you unprepared for deadlines.

Avoiding these mistakes ensures your rights are preserved and protects you from costly disputes after getting the results of pest & building inspections.

Making Informed Choices After a Building Inspection

A building inspection is more than just a box to tick – it’s a safeguard that helps you uncover potential issues and make confident decisions about your purchase. The findings can give you valuable leverage to renegotiate the price, request repairs, or if necessary, withdraw from the contract altogether. 

What matters most is approaching the process reasonably, understanding your rights and avoiding common pitfalls such as missing deadlines or relying on minor defects. Since vendor disclosure laws don’t cover every issue, having your own independent inspection and professional guidance is critical.

If you’re unsure whether to renegotiate or walk away after a building & pest inspection, North Brisbane Home Loans can help. Our experienced team is here to guide you through the finance and contract process so you can move forward with clarity and confidence. Contact us today to discuss your options and secure the right solution for your property journey.