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:
Significant Structural Issues
Problems with the foundations, structural instability or extensive water damage can pose serious risks to the safety and stability of the property.
Repair Costs
If the inspection uncovers a long list of necessary repair or maintenance tasks, you may want to withdraw from the contract due to the added expense.
Non-Compliance with Building Codes
Building inspections may uncover issues with zoning restrictions, illegal renovations or a failure by past owners to obtain necessary permits. Non-compliance could lead to significant fines or make it difficult for you to insure the property.
Pest Infestations
Pest inspections are crucial for identifying any infestations or damage caused by pests such as termites or rodents. A significant pest infestation can cause structural damage and require extensive and costly treatment.
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?
- 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.
- 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.
- 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.
- 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.
Talk To A Broker About the Value of A Pre-Purchase Home Inspection
A property inspection offers considerable protection for a home buyer and may be required by some lenders prior to loan approval being granted. To find out more about pre-purchase building inspections, contact the team at North Brisbane Home Loans today. We’ll happily answer all your questions, provide tailored advice and recommend a trusted local pest and building inspector..

Patrick Cranshaw, a Certified Mortgage Professional for over 21 years, founded North Brisbane Home Loans in 2002. His career began with ANZ Bank in New Zealand, where he progressed over 16 years to a Business Banking role in Virginia. After moving to Brisbane in 2000, Patrick led the QLD market for a home loan agency, helped set up the REMAX Real Estate Finance division, and practiced as a broker.