What a building and pest inspection covers
A building and pest inspection is an assessment of a property's physical condition conducted by a licensed inspector. In NSW, two separate licences cover building inspections and pest inspections respectively, though many inspectors hold both and offer a combined report.
The building component covers the structural integrity of the property, including foundations, roof structure, walls, floors, and drainage. The inspector assesses visible defects, safety hazards, and conditions likely to result in defects if left unaddressed. The pest component covers evidence of timber pest activity including termites, borers, and fungal decay.
What is not covered
Building inspections are visual only. Inspectors do not open walls, move furniture, or access areas that are not safely accessible. They do not assess electrical, plumbing, or gas systems (these require separate specialist inspections), and they cannot detect defects hidden by cladding, flooring, or furnishings.
When to get one in NSW
The ideal time for a building and pest inspection is before you exchange contracts, or during the cooling off period. For auction purchases, the inspection must be completed before bidding because there is no cooling off period once the hammer falls.
Many vendors in NSW make building and pest reports available as part of the contract of sale documentation. While useful as a starting point, it is generally advisable to commission your own independent inspection rather than relying solely on the vendor's report. An inspector engaged by the vendor has a different set of incentives than one engaged by you.
Red flags to watch for
Termite activity or evidence of past termite damage is one of the most significant findings an inspection can reveal. In NSW, where the climate is conducive to termite activity, this is not uncommon. Active termites require immediate treatment and the structural damage they cause can be costly to remediate.
Rising damp and water ingress issues are also common, particularly in older Sydney properties. Roof defects, unsafe balconies, cracked or subsiding foundations, and unapproved additions or structures are findings that can significantly affect a property's value or your ability to obtain insurance and finance.
A major defect classification in the report is a signal that remediation cost could be substantial. Minor defects are typically maintenance issues. Understanding the distinction is important when interpreting the report.
Reading the building and pest report
Reports are structured around a classification system. In NSW, the Australian Standard AS 4349.1 governs building inspection reporting. Defects are classified as major (requiring urgent attention and likely involving significant cost) or minor (maintenance items not affecting structural integrity or habitability).
A long list of minor defects is not necessarily alarming on an older property. Every building has maintenance needs. Focus on major defects, particularly those relating to structure, waterproofing, and pest damage. The inspector's summary section is the most useful starting point.
What to do if issues are found
Finding issues in a building and pest report does not automatically mean you should walk away. It depends on the nature and severity of the defects and the price you are paying relative to what remediation will cost.
During the cooling off period, you have the option to renegotiate the price based on findings, request the vendor address specific defects before settlement, or withdraw from the contract forfeiting 0.25%. For auction purchases, discovered defects after bidding leave you with no legal recourse to renegotiate, which is why pre-auction inspections are essential.
How much a building and pest inspection costs in NSW
Fees vary by property size, type, and location. For a standard house in Sydney, a combined building and pest inspection typically costs between $400 and $700. Larger properties, acreage, or properties with complex structures may cost more. Strata inspections for units are a separate product and typically cost $200 to $400.