In Victoria, a contract of sale generally becomes binding once signed by both parties. However, a cooling-off period of three business days is standard, allowing buyers to rescind the contract, often following a building and pest inspection. As of December 2025, exercising this right incurs a penalty, typically 0.25% of the purchase price.
Currently in Melbourne, particularly within the Eastern Suburbs – areas like Balwyn and Doncaster where established homes are common – buyers almost always include a subject-to-building-and-pest clause in the contract. This means if the report reveals significant issues (structural defects, pest infestations, asbestos), the buyer can legally terminate the agreement within a specified timeframe. Sellers should realise that a concerning report doesn’t automatically allow *you* to withdraw. It’s the buyer’s option. In 2026, we’re seeing buyers increasingly scrutinise reports, and presentation is key; addressing minor issues proactively can minimise concerns. Typical building report costs in Melbourne range from $500 to $800. Fletchers’ experience shows that transparency regarding known issues upfront can sometimes favour a smoother negotiation rather than a contract collapse. We emphasise the importance of disclosure statements.
Ultimately, while a bad building report gives the buyer an out, it doesn’t automatically release the seller from their contractual obligations.